How To Drive Employee Engagement with Total Compensation Statements
compensation-statements-drive-engagement

How To Drive Employee Engagement with Total Compensation Statements

Nearly half of top-performing companies provide total compensation statements to employees (compared to 36% of typical companies).

Why? Because, sharing information on the total compensation works!

Communicating the value of the entirety of their compensation is a key to improving employee engagement and retention. Most employees take only salary into consideration when thinking about compensation, but there’s far more in the pot.

A total compensation statement (TCS) is pretty self-explanatory: It’s a document that outlines in detail an employee’s direct and indirect compensation – including all cash income plus the value of all benefits received. The total compensation statement is often referred to as a hidden paycheck or a total rewards statement because most employees focus on their net pay and either forget or underestimate the value of their benefits package.

PayScale’s 2019 Compensation Best Practices Report (CBPR) surveyed 7,030 executives, line of business managers, HR leaders and compensation practitioners at a variety of organizations across sizes and industries, both public and private. Nearly half (43%) of top-performing companies in the current survey provided total compensation statements to their workforce, compared to 36% of typical companies.

A total rewards compensation statement empowers employees by giving them a more in-depth understanding of their compensation, encouraging them to think beyond the dollars and cents of their salaries and helping them understand the total value of their compensation. This empowerment can increase engagement and retention, as well as the quality of new hires.

compensation-statements-drive-engagement

What should I include in a total compensation statement?

In addition to listing base salary, a TCS should any of these applicable items:

  • Bonuses
  • Vacation/PTO/sick days/other paid leave
  • Mandated Benefits – Workers’ Compensation, Social Security, Medicare and FUTA tax
  • The value of insurance plan premiums (health, dental, vision, life, STD and LTD) paid by the employer
  • Employer contributions to a 401(k), 403(b) or pension plans
  • Employer contributions to flexible spending accounts or health savings accounts
  • Stock options
  • Value of other benefits, such as:
    • Mobile phone
    • Company computer/tablet
    • On-site child care
    • Company-provided lunches
    • Gym membership
    • Public transportation and parking subsidies
    • Tuition assistance
    • EAP
    • Company discount programs
    • Company car

Tips for Communicating the Value of the Entire Compensation Package

As with any type of company communication, you have to make your total rewards statements compelling and attention grabbing to help ensure your employees read them. You should:

  • Think like a marketer. A total reward statement is a type of marketing communication. You are “selling” your organization to your current employees. The statement should contribute to promoting your brand as an employer of choice.
  • Make it visually appealing and simple. If your statement is cluttered, boring or difficult to understand, your employees will toss it. Use a lot of color and make the language clear and simple.
  • Use charts and graphs. Tell a story with images that can help employees understand their compensation at a glance.
  • Choose the optimal distribution method. Every company is different. You know your employee base so carefully consider the best method for distributing your total compensation statements. For some businesses, posting statements on the company portal makes the most sense; for others, print statements mailed to employees’ homes are more effective.

Communicating total rewards and compensation makes good business sense when it comes to outlining the full extent of your company’s value. By implementing a regular system for gathering and distributing this information, your organization can better demonstrate the investment in its employees.

Paycor Can Help

More than 30,000 medium-sized and small businesses trust Paycor to help them manage their most valuable asset – their people. Paycor is known for delivering modern, intuitive recruiting, benefit, HR and payroll software, but what distinguishes us is our singular focus on helping business leaders, entrepreneurs and HR professionals make a real difference in their organizations. Use our interactive Solution Finder to uncover the Paycor solutions that are right for your organization.

Find Solutions

Source: Payscale Survey, 2019

More to Discover

Webinar: COVID-19 Summit- BROKER HAPPY HOUR: Your Clients’ Most Burning Questions - Answered - 4/23/20 @4pm ET

Webinar: COVID-19 Summit- BROKER HAPPY HOUR: Your Clients’ Most Burning Questions - Answered - 4/23/20 @4pm ET

Exclusive session for Paycor PartnersJoin a panel featuring Paycor experts and broker partners as they discuss the newest coronavirus legislation, what it means to businesses and what resources Paycor offers to stay on top of the changing regulations. They’ll also cover the most frequently asked questions brokers are hearing from clients and how to best address these topics. Bring a beverage of your choice, come ready with your own questions and join us.Speakers: Shaun Scott, Senior Vice President of Strategic Channels at Paycor and Scott McGohan who is the CEO of MCGOHAN BRABENDERThursday, April 23, 2020 4pm ET

Webinar: COVID-19 Summit - CUSTOMER EXCLUSIVE: 10 Paycor Product Features to Leverage - 4/23/20 @3pm ET

Webinar: COVID-19 Summit - CUSTOMER EXCLUSIVE: 10 Paycor Product Features to Leverage - 4/23/20 @3pm ET

Join Paycor’s Director of Product Marketing, Tim Ruge, for an inside look at a 10 product features available within Paycor’s HCM platform to help your organization during this crisis. Tim will walk through each of the features to help ensure your organization is aware of all the ways Paycor’s technology can support your business. Speaker: Tim Ruge Tim Ruge is Paycor’s Director of Product Marketing, focusing on the HR Center of Excellence and various compliance topics. Since joining Paycor in 2012, Tim has led their efforts in getting customer feedback and helping deliver product features and content that helps Paycor’s customers make a difference in their organization. Tim has led the planning, development and launching of Paycor’s...

Employee’s Guide to Working from Home

Employee’s Guide to Working from Home

How to Work from Home (Without Going Crazy)Fortunately, most people have never had to deal with a massive virus outbreak such as the one we’re experiencing now. Unfortunately, that makes managing the situation with the COVID-19 pandemic an entirely new realm for both businesses and employees. Along with diligent handwashing, social distancing is key to preventing the spread of the disease. In response, many employers are adopting risk reduction strategies and encouraging employees to work from home (WFH) for at least two weeks. For companies that are largely made up of offsite workers, this approach generally won’t pose a challenge; however, many companies have never worked that way and, as a result, either have no formal policy or they’...

How To Work From Home with Kids

How To Work From Home with Kids

The spread of the coronavirus (COVID-19) has had an enormous impact on all of our day-to-day lives. From toilet paper shortages to restaurant closings, we’ve all had to make some serious lifestyle adjustments. Employees who can do so are being asked to work from home. And schools in many areas of the country have been closed until further notice. The result is that many parents who have never previously worked from home have to now… and if they don’t have other childcare options, they have to try to focus on their jobs while simultaneously parenting their children. Working from home is an adjustment any way you look at it. Working from home with children adds a whole new level of complexity. Following are a few tips that help if you find...