total compensation statements

Employers Are Paying More for Benefits. But Do Employees Know?

Photo by pe-art/iStock / Getty Images
Photo by pe-art/iStock / Getty Images

A new study finds that the cost of employer-provided benefits increased 24% from 2001 to 2015.

The analysis conducted by WillisTowersWatson revealed not only an overall increase in the cost of employee benefits, but also a shift in how employer dollars are allocated - less for retirement benefits and more for health insurance.

The fact that the cost of employee benefits has increased to the extent that it has will not come as a surprise to employers. Employees, however, are a different story. For most employees the main concern of the past fifteen years or so is not the increase in their employers’ cost of benefits but rather the lack of wage growth experienced by many workers. Simply put, most employees are unaware of the value of their total compensation package.

While many employers strive to communicate a total rewards message to employees by providing them with total compensation statements, too many employers fail to make communicating this key information a priority. By failing to communicate, employers miss an opportunity to maximize the return on the significant investment being made in compensation and benefits.

Does your organization provide a total rewards statement to employees? Let us know in the comments. And, of course, feel free to reach out to discuss how we help you tell your organization’s total rewards story.

How Much Does Salary Matter?

How much of a bump in salary would it take to get you to accept a new job?

While everyone’s number is different, it’s clear that salary matters. A recent article points out that lack of meaningful wage growth is one of the main reasons workers switch jobs.

But wages are only part of the story.

The same article notes that engaged employees are far less likely to jump ship for a job with higher pay. Recent research finds that among employees who are “fully engaged,” 37% would consider switching jobs for a raise of 20% or less – compared to 54% of employees who are “actively disengaged.”

Employers can take a few lessons from this and similar studies –

Pay matters – up to a point: Employees need to be paid competitively, but also need to feel connected to their work and the organization for reasons that go beyond the paycheck.

Benefits matter – and not just traditional benefits: As with cash compensation, employees expect a certain baseline when it comes to benefits, but beyond the basics such as health insurance and retirement benefits, employers should be looking at other benefits – such as financial wellness and opportunities for education and professional development -  that employees consistently say that they value.

Communicate: Make sure that employees are fully aware of the total rewards package the organization provides. Total compensation statements are an excellent tool to use to increase employee awareness and appreciation of the breadth and depth of an organization’s rewards programs. 

Hiring is Surging. How Will You Keep Your Best Employees?

Last Friday's employment report was the strongest one of 2015. In addition to recording the lowest unemployment rate since April 2008, wages were up 2.5% from the previous year. According to The Wall Street Journal, "the economy is gaining traction and the steady pace of hiring is finally translating to long-awaited wage growth."

Great news for workers, the economy and the country. But for employers, there is also a challenge - how to hold on to the best workers.

Without question, employee retention is a complicated topic - there are all sorts of reasons why employees move on, and there are many tools and strategies employers can use to minimize turnover. But one important tactic that is sometimes overlooked is communications - specifically, total rewards communications.

While HR professionals are rightly concerned about making sure their organizations provide competitive pay and benefits, it's very important to keep in mind that how total rewards are communicated can have as much impact as what makes up a total rewards package. There are countless organizations that provide excellent total compensation to employees but, because these organizations do a poor job of telling their total rewards story, the investments being poured into total rewards are not having the desired impact.

If your organization could use help with total compensation statements or other types of total rewards communications, contact us and let's talk.


Employee Retention, Engagement are Top Concerns for Employers

The New York Times reports on two new studies that find employers are increasingly worried about how to hold on to their best people.

So what are employers doing to make sure that key employees don't head for the exits?

According to the article, one area that organizations are focusing on is culture - making sure that workers find meaning and value in their work. Another strategy employers are turning to is making sure that benefits - in particular healthcare and retirement benefits - are competitive.

But sometimes it's not what employers provide but rather how they communicate about what they already provide.

Employers need to recognize that great pay, benefits and other perks are necessary, but they're not always sufficient. The missing link is communications and education - making sure that employees know about and appreciate what the employer makes available.

While there are many ways to get the message out, total compensation statements are an important tool that employers can use to inform and educate employees about their total rewards.

The first quarter is an excellent time to distribute total compensation statements - and our firm would love to help your organization design, create and distribute these communications. Contact us for more information.

5 Reasons You Need a Total Compensation Statement

Moving into Q4, organizations are thinking ahead to 2016. For many organizations, total compensation statements are high on the to-do list.

Why should your organization be thinking about producing a total compensation statement? There are many reasons, of course, but here are our top five:

  1. Employees don't value what they don't know -- Multiple studies and surveys over the years have found that employees consistently undervalue their total rewards package. A total compensation statement clearly shows employees the true level of investment being made by an employer.
  2. Increase the ROI of compensation and benefits -- By laying out the full details of each employee's total rewards package, a total compensation statement increases the odds that the benefits and compensation you provide to employees will be effective in driving employee satisfaction and engagement.
  3. Increase employee retention -- Employee turnover is expensive. According to one recent survey, almost half of workers agreed that a well communicated total compensation program would make them less likely to leave their current employer.
  4. Reinforce the employee value proposition -- Employees - particularly high performing employees - have choices and options. Total compensation statements are an extremely cost effective way to make sure that employees understand the many advantages of committing to your organization.
  5. Build your employer brand - Total rewards communications help reinforce other communications and initiatives that, taken together, increase the brand value of the organization as an employer. 

5 Tips for Effective Total Compensation Statements

Whether you refer to them as total rewards statements, benefit statements, or total compensation statements, effectively communicating the true value of pay and benefits is critical to an employer’s efforts to inform, motivate and retain employees across the enterprise.

Here are five tips for making sure that your organization’s total compensation statements have the impact that they should:

1. Tell a story

When you think about your organization’s total rewards program, don’t think in terms of a list of benefit and compensation plans or a list of dollar amounts. Not only do leading employers think strategically about benefits and compensation, they also see the composition of their total rewards programs as a reflection of the organization’s mission, vision and values. Use your total compensation statement to tell your organization’s unique total rewards story.

2. Think like a marketer

Think about a total compensation statement as a marketing communication. Look at it as an opportunity to “sell” the organization to your current employees, and make sure that it contributes in a positive way to helping an employee explain what is unique about the organization and why it’s a great place to work. Think about how the statement will contribute to building up your brand as an employer of choice.

3. Consider benefits to highlight

While your total compensation statement will no doubt include the basics, give some thought to how best to include and position such benefits as your corporate wellness program, training and career development, and work/life programs.

4. Choose the optimal distribution method

Consider your employee population and think through how best to attract and hold employees’ attention. For some organizations, the Web makes the most sense while, for others, print statements will be more effective.

5. Send statements at the right time

Although there is never a bad time to put the total rewards message in front of employees, they may be more receptive at particular times of year. Whenever you choose to distribute statements, make sure they complement other employee communications.