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When is the Best Time to Give Employees a Total Benefit Statement?
If you’re like most business owners or HR Managers, you know that communicating with employees about their salary and benefits is always a touchy subject. It’s best to plan accordingly and ensure that the timing is appropriate. But when is a good time to tell employees what their salary, health benefits, sick time, vacation time, and countless other perks are worth? Well, the answer is…it depends.
There are several different occasions and times of the year when your organization may be best suited for giving employees their total compensation reports. Given that a detailed summary of employee benefits is a boost to morale, the Holiday Season or New Year can be a great time to give employees the gift of a complete rewards statement. Although an annual benefits report is sometimes adequate, there are many other times throughout the year when a total compensation statement can help attract, retain, and positively impact your employees.
Hiring
First impressions are always important, and the way you welcome a new employee to your company is no exception. That’s why hiring can be an excellent time to present a total compensation statement. Letting a new or potential employee know just what you’re prepared to provide, even beyond their regular salary, is a great way to get that new relationship off to a solid start. In addition, employees who are comparing other offers can fully see what your company is offering them, and if the competition doesn’t provide a total compensation statement, your company is going to be viewed as the better choice.
Promotions or Raises
Another good time to discuss benefits is during a promotion or request for a promotion. Oftentimes in such discussions, the focus is solely on the actual wages offered or sought. However, it is wise to also emphasize the other benefits an employee is receiving outside their paycheck, such as paid sick time, free parking, a laptop, cell phone, or several other perks. Even intangibles like flexible scheduling can and should be part of the discussion, since they contribute to the overall employee welfare, contentment, and productivity.
Reviews
Annual or semi-annual performance reviews are also an excellent time to bring up total compensation. While discussing what the employee has done for the company, you can also showcase the full dimensions of what your company is providing. A comprehensive total compensation statement can boost morale and employee loyalty, and makes an excellent accompaniment to any words of encouragement that you may offer during a review.
Significant Life Events
There are some events in life that have a direct correlation to employee benefits. Occasions such as marriage or divorce, starting a family, illness or approaching retirement can be opportune times to present a total compensation statement. Since an employee may become eligible for additional benefits at these times, taking the initiative to let them know what they qualify for and what they receive is a great way to show that you’re truly looking out for your team.
Remember, the full measure of benefits your employees receive far exceeds their actual wages. This is good news, so share it freely!
PPACA’s Effects on Insurance Agencies
The new health care reform act is affecting many different industries and businesses, from the amount of health care coverage provided for employees, to the way businesses report the costs associated in their employees’ compensation packages. With so many changes set to occur in the next several years, the industry that will perhaps be most impacted by the new legislature is the insurance agency industry.
So, the question is, when the Patient Protection and Affordable Care Act (PPACA) opens up buying pools to individuals, will insurance agencies lose out on this business and have to consolidate or downsize, or will they begin to offer different services? Will small business clients of insurance agencies give up their insurance plans and leave it to employees to manage their own health care plans, or will insurance agencies step up their efforts, in either marketing their product or providing new additional solutions within their industry space?
These are questions many insurance agencies are asking themselves. As insurance agencies rely on COMPackage Total Benefit Statements to prepare compensation reports for their clients, Joe Blattner, Founder and President of COMPackage, decided to ask some of his customers this very question. Here’s one very thoughtful response from one client worth sharing with you here:
Patrick Paule, Employee Benefits Advisor for OneSource Benefits Solutions and author of Benefits Guy Blog, how his company plans on altering its business in the face of healthcare reform. Below is Mr. Paule’s thoughtful and exemplary reply:
“PPACA is an evolving monstrosity filled with complexities beyond any health professional’s wildest dreams. Between now and 2014 we will undergo a change that is so big in scope that even those who wrote the bill can not comprehend.
It is very clear that the main focus of the legislation isn’t reforming our health care system, but rather reforming our health insurance delivery system. All of the changes that have been implemented to date have dealt with access to insurance products, enhancement of insurance benefits, and regulation of insurance markets.
Two major pieces of the legislation will have significant impact on compensation paid to agencies and independent agents. The Minimum Loss Ratio requirement is already in effect and has caused insurance companies to reduce commissions especially in the individual and small group markets. Under the requirements insurers must now spend 80% (85% for groups over 100 employees) of all premiums on medical claims. Anything below this number must be rebated to the clients. In the past our compensation had been viewed as a pass through. Now it is considered part of the administrative costs. The second piece is a work in progress and must be ready to operate on January 1, 2014. An online marketplace known as a Health Insurance Exchange must be created to allow people to purchase insurance. The key to this exchange is that the only way an individual can qualify for subsidized insurance is if they purchase through the exchange. The compensation that may be paid to agents for selling these products hasn’t been established, but based off of how the high risk pools are being run the amount is nominal.
Other items, such as the guaranteed issue of insurance regardless of medical conditions, in the legislation will make it easier for small employers to discontinue their plans and push employees into purchasing on their own. They will look to do this because they can avoid the added administrative expenses they will incur in order to keep a plan in compliance. Not to mention it will eliminate a costly expense.
Insurance agencies are going to have to adjust in order to survive. The way we are planning to survive is by leading the charge into a world where we can serve as a consultant. In our new role we will aid in human resource consulting, payroll services, third party administration, long term benefits planning, and compensation practices. We must provide more value and give clients tools such as COMPackage that enhance our position. As I tell my clients, as head coach you are important to the success of a team. As your point guard I will follow your lead and help create a program of championship caliber.”
How is your insurance agency thinking of handling the changes? What plans have you already set in place to combat the changes? Would love to hear your thoughts in the comments below!
Employee Benefits Communication Breeds Workplace Loyalty, According to MetLife Study
According to the most recent MetLife Study of Employee Benefits Trends, 56% of employers surveyed made no modification to employee benefits materials last year. This means, even though there may have been changes in employee costs and benefits, those changes were not communicated to employees.
Not only that, but the study also says that only 23% of employees are satisfied with their benefits communication. So, of the employers who DO send out benefits communications, 77% must not be doing a very good job of it!
But, why should an employer give a hoot? Because employees who get communications from their employer about their benefits are twice as loyal to that employer. TWICE as loyal. That thought alone ought to save you some costs in employee retention and recruitment.
How often do you update your employee benefits communications? And, just as important, when was the last time you explained to your employees how much their total compensation is worth?
When fifty-five percent of employees report that they do not find their benefits materials clear or comprehensive, clearly an opportunity exists. This is where you can help your employees understand their compensation and further engage them, so they may see for themselves how much your company provides.
*Source: MetLife 9th Annual Study of Employee Benefits Trends
Part of your benefits communications should also be showing the COSTS associated with employee benefits. Do your employees know how much they’re benefits cost? Do they see the rise in costs every year in workers compensation, state insurance, health care? Do employees realize that the extra three days off they were given this year in vacation pay is actually costing the employer money by not having that employee at their job? This is also part of their total compensation.
The more communication you can provide to your employees, the better they will understand your company. In fact, you will also understand your company better if you were to add up all the costs that go into an employee’s total compensation. COMPackage total benefit statements provide over 60 benefit costs that most employers don’t even consider when adding up the costs of their employees. By adding up all of these costs, businesses are better equipped to make good decisions.
Would love to know your thoughts about this topic — how has employee benefits communication strengthened your relationship with your employer/employees?
Employee Benefits Made Up 30.3% of Total Compensation in December 2010
That’s just over 43% of pay!
According to the Bureau of Labor and Statistics, employer-paid benefits make up a big chunk of change – 30.3% of total compensation for employees across all industries and sectors.
The BLS study shows that private industry employer costs for paid leave benefits averaged $1.89 per hour worked, while legally required benefits was $2.28 per hour worked. Take a look at the study to compare the compensation costs for state and local government workers, private industry workers, and civilian workers.
COMPackage believes that the proportion of employer-paid benefits is actually higher than 30.3% for many industries, because the BLS study is not taking into account all possible benefits, such as travel expenses, training, company outings, free suburban parking, cell phone expenses, etc. COMPackage has always believed that employer-paid benefits as a percentage of base pay is 43%, which is what the BLS percentage of Total Compensation number equates to. But we also believe that when you add these above benefits that the BLS wouldn’t typically include, then average definable benefits are actually even more, especially for companies employing higher salaried workers!
Included in the amount accounted for by the BLS were employer costs for vacations, holidays, sick leave, and personal leave. Other costs included legally required benefits, including workers’ compensation, (1.5% of total compensation); state unemployment insurance, (0.7%); and federal unemployment insurance, (0.1%).
This study is important for a couple of reasons:
a)It shows whether there is a rise or fall in how much employers are paying for total benefits of employees. (There was an increase of nearly 3% over the last three years.)
b)It points out that employer-paid benefits make up a tremendous portion of employees’ total compensation, a point that is often not communicated to employees, even though it is a very substantial amount of their pay.
When the total costs of employee benefits, like insurance, health care, and paid-time off, go unreported, how can employees possibly decipher their true compensation? If employees can only attach a number to their salary, and do not understand their total worth to the company, both parties suffer unrealistic expectations. Employers feel like they’re paying employees too much, while employees feel like they’re being paid too little. Neither party is wrong, but without knowing and reporting on how much the actual costs are, neither party has a leg to stand on, whether negotiating salaries or finding ways to retain employees.
When was the last time you took a hard look at the numbers you’re spending on your employees? And if you are already using total compensation reporting methods, what types of benefits are you including in your total compensation reports?
Diversifying Employee Benefit Packages for a Mixed Workforce
Today, the ideal total compensation package is as diverse as the current workforce itself. In fact, it has to be in order for companies to attract and retain the absolute best employees.
Your employees may vary greatly in age, location (urban, suburban, rural), gender, and marital status. They also most likely vary in how they work – from home or at the office? From a computer or by phone or some other type of a machine? By travelling on sales calls or going into the office every day? These are all things to take into consideration. Not to mention, employees working for the same companies have very different job descriptions and skill sets. Why give all employees the same exact benefit package, when employees are all so different?
If you are trying to provide a one-for-all solution, you are more than likely leaving some of your employees behind. By taking the demographics of your workforce into consideration, you can remove the guesswork of a one-handed solution and offer employees a worthwhile benefits package with options.
Regardless of whether or not your company is small or large or somewhere in between, tailoring benefits to the specific needs of your employees does wonders for morale. It’s also a smart move if you aren’t able to compensate monetarily as much as your competition. To bridge the salary gap, the savviest of employers know they must make up the difference by offering an attractive total compensation package and one that make sense for the employees in question.
Think about it. Would you offer an on-site daycare facility as a part of your benefits package if a large portion of your workforce is under the age of 25? If most of your employees commute by bus, would including a parking spot be relevant or even necessary? If you have telecommuters working for you maybe they don’t get to enjoy the “complimentary” coffee you keep in steady stream in the office – why not offer your virtual assistant a monthly $10 gift card to a local cafe?
Another example would be if employees are expected to use their own vehicles for company business, a prepaid gas card would help to defray fuel expenses. Do employees work from home using their own equipment and Internet service? If so, you might want to consider providing laptops with Internet access.
The cost of providing employees with potentially expensive perks such as insurance, holiday bonuses, company cars, laptops, cell phone service, tuition reimbursement, or stock options may naturally be a great concern, but it may not be as high as factoring in the cost of recruiting and retraining new hires. Offsetting salaries with a diverse selection of fringe benefits is one of the simplest ways of compensating employees smartly.
In essence, offering a diversified benefits package gives you the luxury of not only attracting talent, but also keeping the top talent in your field happy to be on board. Providing options and showing individualized attention can be priceless. And with the right software, it doesn’t have to be difficult, either. COMPackage offers customers a comprehensive list of over 60 benefit ideas as a natural part of their total compensation software subscription.
Getting the Word Out
After revamping benefits packages to meet the unique and changing needs of your employees, it is imperative to then ensure they are fully aware of their total compensation. It is often astounding for employees to find out how much their employer pays for their total compensation, but sometimes it’s also a shock to the employer, when they start adding it all up.
Many employees are completely unaware of the extent or contents of their work benefits. Are key employees being lured away and accepting other positions offering a higher base salary? They may not be so quick to make a move if they had all the facts about their benefits package.
Employees and potential recruits need to know the full costs associated with having them on staff. Knowing this gives them a better idea of their true compensation and it also allows for essential employee feedback. Encouraging employees to provide feedback regarding which types of compensation are most important to them gives you a definitive edge when it comes to yet another important aspect of any successful business – employee retention.
But how can you give them all of this information without spending a ridiculous amount of time compiling data or an exorbitant amount of money outsourcing the task to a third party?
The answer is using total compensation statement software for creating employee compensation reports and detailed benefits statements. Benefits statements will give your employees a clear and concise picture conveying exactly how much they are really being compensated for their services.
What interesting ways does your company provide benefits? We would love to hear your ideas for diversifying benefits in the comments below.
Are You Offering Competitive Compensation?
One of the toughest decisions small business owners have to make is how much to pay their employees. Too little and they risk high turnover and low morale; too much, and they’ll never get ahead financially. Calculating salaries is a tightrope walk that few new employers feel comfortable with. Do you know if your salaries are competitive?
Use the right tools
Fortunately, there are a number of readily available tools at your disposal to help you calculate the ideal salary for each employee in your company. It’s important that you use all the resources you can, because your employees are almost certainly already using them, and they know exactly how much they should be making. Start with free tools from the Bureau of Labor statistics like their Consumer Price Index and Employment and Wage Surveys to get a rough idea of the cost of living in your area and average salaries for employees in your industry. For more detailed information, consider using a salary calculator from a site like Salary.com.
Allocate funds
When deciding on compensation for each employee in your company, one of the things you’ll want to consider is which positions you’ll want to offer the most competitive compensation. For example, if you’re hiring for a position known for high turnover, you may not want to offer as competitive a salary as you would for an employee with many responsibilities who would be difficult to replace.
Compensate with benefits
If you can’t offer the same high salaries as other employers in your industry, consider making up the difference with benefits. Certain benefits like free parking may not cost you a whole lot, but could make a world of difference to an employee comparing your offer to another. Show employees and recruits how much their benefits are worth through a total compensation report. Compensation reports clearly and concisely show how your benefits bridge the gap between your offer and the seemingly higher salary at another company.
How to Handle Social Media in the Workplace
As social media continues to play a bigger and bigger role in our society, it has brought up a number of uncomfortable issues in the workplace. Should employees be allowed to access social media on work time? What happens when an employee posts something inappropriate on Facebook or their personal blog? If your workplace doesn’t yet have a clear social media policy in place that deals with issues like these, you’re asking for trouble. Your company’s social media strategy should be:
Consistent
No single policy works for every type of company, so it’s important to evaluate your company’s social media policy to make sure it matches the corporate culture. Are you a small creative firm where shorts are appropriate on Fridays? You may want to think about placing fewer restrictions on social media sites. Are you setting policy for hundreds of employees? You’ll probably want a more restrictive policy to cut down on headaches down the road.
Thorough
Even if your company’s social media policy is relatively lax, it should be thorough enough to let employees know exactly what is expected of them. Spell out your social media policy in the employee handbook, touching on issues like which sites are appropriate to visit during work hours, what can and cannot be said online, how to handle official company social accounts and what punishment is appropriate for certain violations.
Flexible
Because social media is continuously evolving, it would be foolish to never revisit your social media policy. Stay current on the latest topics and trends in social media, and you’ll be able to change your policy when it makes sense.
If your employees are using social media on their company cell phones or laptops, are you showing your employees the costs of these extras with employee benefit statements from COMPackage?
Also — if you are using social media, follow COMPackage on Twitter or on LinkedIn. We would love to keep in touch!
The New COMPackage Logo: Do Your Employees “Get” All the Pieces of the Pie?
When I began making further use of social media sites like Twitter, FaceBook, and LinkedIn earlier this month, I quickly found out how unsuitable a rectangular-shaped logo can appear, given that these social media networking websites only allow companies to have a small logo space on their profile page.
This led me to have a new logo designed, specifically for these social networking profile pages. What the heck – the current logo needed a facelift anyway, since it was originally created when our product included pie charts instead of our current bar charts. I employed an agency to come up with a few (14) designs. Now, the thing about logos is that they should look good, whether they are spread about on a full page magazine advert or reduced to 100 pixels of a tiny icon on a computer screen. That can sometimes be a difficult challenge, but it’s important to think about before deciding on a permanent logo, a fixture of your business, your brand.
After many designs were created, much deliberation ensued. In deciding the overall design of the logo, the idea of a “C” appealed to me, since COMPackage begins with a “C”, of course. And it also stands for “compensation”. And “cash”, come to think of it. But the larger question was, ‘how can the logo encompass the “employee benefit statement” aspect?
I originally liked the idea of having a bar graph inside the “C”, but this ended up looking more like some sort of a ratings bar chart, and it didn’t hold up in micro size. And COMPackage used to use pie charts to display the total compensation report, (because pie charts are preferred by employers, but more difficult for employees to understand, based on focus group studies that we did in 2008).
But this “C” icon made more sense for the brand and the image that I want people to have of COMPackage and employee benefit statements, in general. To further drive home the point that ALL compensation, benefits, and “perks” should be included in employee benefit statements, there is a “core” to the “C”, with an outer wrap around the “C”. The core “C” encompasses the base compensation, or the meat of an employee’s compensation – the salary, commissions, bonuses, and holiday pay. The outer wrap signifies all the add-ons and the extra benefits employers and employees don’t normally consider as part of their compensation: healthcare, auto, technology, training, food, and other specialized company benefits that are rarely understood because they never get discussed.
I hope that the new logo is visually appealing to you, but that it also holds meaning for you like it now does for me. So, when a business owner or HR Manager thinks of COMPackage, they may now also think of how to better communicate to their employees — by letting them know all of the pieces of the “pie”.
Let me know: what do you think of the new logo?
Should Small Companies Consider Employee Benefit Statements?
Is your company too small for employee benefit statements? Many small companies show an interest in benefit statements, but may fail to provide them due to mistakingly thinking there is too much cost or trouble involved in generating reports for a small number of employees.
In reality, employee benefit statements can help companies of all sizes, and still be affordable and well worth the cost. Many small companies have found great success with easy-to-use benefit statement solutions. But how can these statements meet the specific needs of small companies in particular?
Compete with the Big Boys
Many small companies find it difficult to keep their best employees because they feel they can’t offer the same level of compensation as their larger competitors. Employee benefit statements make it much easier to retain employees, since it can show them just how much their benefits are worth, before they start considering another job that seems to offer more compensation. Most employees are impressed by only their salary figure, plus a few base benefits, but by showing employees a total compensation statement, that includes all perquisites of the job, employees will think twice about moving on to a larger company, a company that may not actually have more to offer.
Use a Simple Solution
Chances are good that if you’re a small company, you don’t have someone on staff with the expertise to handle a highly technical employee benefit solution and you can’t afford to outsource this task to an outside firm. Through a simple online total compensation reporting solution, even small companies with little technical expertise can show their employees how much their benefits are worth.
Highlight Unique Benefits
As a small business, you may be offering a number of benefits that larger companies simply can’t. For example, do your employees enjoy free parking? Employees that work in large downtown offices often pay more than $50 each month for parking. Do you offer company cell phones, flexible scheduling or continuing education compensation? Highlight each of these benefits unique to your small business through an employee benefit statement.
Learn more about total compensation reports for small companies, or access a demo to find out if it’s the best match for your company.
Buying Options When Purchasing Total Compensation Statement Software
Today, a simple online search will turn up a number of companies claiming to offer you the best solution for producing total compensation statements. While some of these solutions offer a few nice features, many lack the basic functionality required to produce a truly useful total compensation statement. When you’re considering total compensation statement software, use this checklist to make sure it has the features that matter most to you.
Is Total Compensation Statement Software Easy to Use?
You don’t have the time, money or Computer Science degree necessary to effectively use many compensation statement solutions. To get the best return on your investment, take a close look at a couple different solutions and choose the one that is easiest to understand while still offering robust features. Most compensation software solutions will provide a demo or a sample — make sure you look closely at each and compare the products before making a purchase.
How Much Can I Customize Employee Benefit Statements?
You should be able to customize as much as you want. Simple, “free” software for creating reports may not be flexible enough to provide real value to employers. Make sure the solution you choose allows you create custom reports for every employee in your company; otherwise, your incomplete statements could end up doing more harm than good.
How Secure Is It to Use Total Compensation Statement Software?
If you can’t verify that a total compensation statement software is 100% secure, then you need to move on immediately. You don’t need the headache of dealing with leaked employee information due to insecure online software.
Does the Software Include Pre-Loaded Benefit Ideas?
Pre-loaded benefit fields in a software solution can help you remember that you not only offer 401(k) and dental insurance, but also benefits like free parking, tuition reimbursement and weekly lunches. These more obscure perks can really add up and make a huge difference to your employees.
Can I Quickly Upload Data Using Compensation Reporting Software?
If you run a medium to large business, you may be dreading the task of entering information on every single employee into a reporting program. If you run a larger company, look for total compensation statement software that allows you to import data directly from an Excel file.
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