Why Your Employees Should Understand Their Total Compensation
Posted on August 29, 2013
19 million Americans are planning to leave their jobs this year, which will cost employers an estimated $2 trillion in employee churn. How can you make sure your valued employees stay? The answer is employee engagement—motivating good workers to remain at your company, and inspiring them to go above and beyond every day.
Engagement’s link to compensation
Employees are more likely to have high engagement if they feel appreciated by their employer. A major component of the appreciation factor is total compensation, including salary, bonuses, health insurance, 401(k) matching and other benefits. According to employee engagement expert Leigh Branham, “There is no more emotionally charged issue for employees than what they are paid for their contributions. What we make doesn’t just pay the bills—it measures our worth in the most material way.” This is why inadequate compensation drives employees away. It’s not necessarily because they can make more money working at another company, but because they feel devalued and unrecognized.
Show me the money
Whether or not you plan to increase employee pay and benefits in the near future, communication is still critically important. Here are a few best practices for discussing compensation in a one-on-one conversation or performance review:
* Speak openly and honestly with employees about how pay is
* Show employees the breakdown of their total compensation package
* Explain that their compensation goes beyond their paycheck, and that you are investing in their well-being through health and retirement benefits
An employee who is not completely satisfied with his or her current paycheck might be surprised to see the total investment you are making.
Paycor’s Custom Web Reporting application allows you to see total compensation for each employee, including wages, benefits and taxes. The easy-to-read format makes it perfect for sharing in the context of an open conversation with each employee about his or her compensation package. See an example report here.
When employees understand you value them, they are more likely to go the extra mile for you. Being transparent about the investment you have made in their total compensation is an easy way to show your appreciation for their dedication and hard work. Contact us to learn more about Paycor’s Custom Web Reporting, and start reaping the bottom-line benefits of higher engagement and retention.
Sources: Cornerstone OnDemand 2013 Employee Survey, The 7 Hidden Reasons Employees Leave by Leigh Branham