Archive for the ‘Reducing Employee Turnover’ Category
by Joe Blattner | November 24, 2011
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!
by Joe Blattner | May 12, 2011
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?
by Joe Blattner | April 20, 2011
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?
by Joe Blattner | September 23, 2010
Employee turnover costs are hard to pin down. Many employers don’t have the time to calculate their exact costs for replacing a worker since they the cost seems to be minimal and unavoidable. The truth is, however, that HR experts estimate that the cost of replacing one employee is at least 25 percent of that employee’s annual salary. These costs include:
Separation Costs
- Cost of exit interview
- Increase in unemployment tax
- Separation pay
- Administrative costs
Replacement Costs
- Placing job ads
- Cost of employees’ time for interviewing process
- Background check cost
- Bonuses and administrative costs
Training Costs
- Cost of training material
- Cost of trainers time
- Time it takes new employee to ramp up
Intangible costs also include the stress a short staff puts on other workers, interrupted client dialogue and lost company knowledge. If you add it all up, you are probably losing much more than you thought on each employee that leaves your company, so doesn’t it make sense to start doing something about it?
The solution to reducing turnover is different for every company. The most important thing you need to do is find out exactly why employees are not happy with your company and fix it. Are employees overworked? Do they hate the work environment? Do they want more competitive salary and benefits? You may not see a dramatic change within a couple weeks or even months, but whatever money you invest in your employees in the short term, you’ll see multiplied in the long term with reduced turnover and higher profits.
Effectively communicating to employees through employee benefit statements can help reduce turnover, as well. Ensuring employees are aware of the company costs associated with keeping them at the job can play a significant role in whether or not the DO stay at the job.
Would love to hear your thoughts and experiences on the costs associated with employee turnover in the comments below!
by Joe Blattner | May 24, 2010
Unfortunately, not every manager can be Michael Scott, CEO of Dunder Mifflin. However, managers can improve productivity and lower turnaround by taking a big cue from Michael Scott — MAKING WORK FUN. If your employees enjoy coming to work every day, they’ll work harder and complain less. The following tips are designed to help you change the culture at your workplace:
Be more like Michael Scott by:
- Relaxing
“Professional” does not have to mean “serious.” As an employer, you should strive to implement a personal conduct policy that allows your employees to work in a safe environment and enjoy themselves at the same time. This may mean that you take a hard stand on sexual and cruel jokes, but remain more lenient on harmless goofing off. Think through all your policies; don’t just create a rule to stop people from having fun or as a kneejerk reaction to a single incident.
- Planning outings during work
If possible, plan occasional company outings during work hours. Through these outings, your employees will grow closer and create memories they’ll cherish for years. Remember that your outing doesn’t have to be elaborate or expensive to be effective. While you could splurge and take your employees to a miniature golf course, bowling alley or baseball game, you could just as easily schedule a picnic, karaoke contest, talent show or game time in the middle of the workday.
- Surprising your employees
Treat your employees to something special without telling them. You could give them a few extra hours off work one Friday, put treats in the break room or schedule a casual dress day. Remember that even little surprises can mean a lot.
- Sponsoring theme days
While you may already allow your employees to dress up on Halloween, consider sponsoring other theme days. For example, for one day each year, you could allow jeans, shorts, hats, local sports team apparel or workout gear. The possibilities are endless, so get creative.
- Spreading Joy
When managers act like jerks, they can bring a whole company down; but when they start spreading joy, management can effect a cultural change that quickly spreads across a company. Stress to your management team the importance of smiling and complementing employees.
- Decorating
Sprucing up the workplace with a few plants and pictures can work wonders for employees’ mood. Consider posting artwork created by your employees or their children.
One final way to improve morale at your company [not sure if they do this at Dunder Mifflin or not 
] is by distributing total compensation statements. These statements can show your employees how much they’re valued by connecting a dollar amount to their benefits.
by Joe Blattner | April 26, 2010
Trying to think of creative perks to motivate your employees? Here’s a list of some of the most creative perks we’ve come across from the 2010 and 2009 Fortune “100 Best Companies to Work For” issues to help get you started. While your business may not be able to afford many of these perks, these examples can at least help you start thinking outside the box as you brainstorm ideas for perks.
- Qualcomm hosts a weekly farmers market that allows employees to stock up on healthy food.
- Umpqua Bank lends employees money for business attire purchases and sets up a payroll deduction so the employees can repay the bank at no interest.
- Stew Leonard’s Company invites employees with 20 years of service to dinner at the home of the company’s founder with a gourmet meal and fine wines.
- Paychex has an extensive employee wellness program that awards up to $300 to employees for doing activities like getting flu shots and dental check-ups, attending aerobics or yoga classes, running a 5K race and biking to work.
- Atlantic Health rewards its employees with a ton of vacation. All employees who have been with the company for at least 5 years get 28 days of paid vacation. New hires receive 18, 23 or 28 vacation days depending on their positions.
- The Marriott hotel chain helps employees and their immediate family move by assisting with buying or selling a home, closing and settlement, mortgages and moving.
- Two artists-in-residence work full-time at SAS and have produced a 3,000-piece art collection.
- Genetech offers $4 per rider per day for employees who offer carpool rides to their coworkers. Employees who commute by bus, train, van, ferry, or bike also receive $4 daily.
- Vanderbilt gives their employees 70% tuition subsidies to attend any college in the U.S.
- Scottrade considers opening an office for employees who want to relocate in an area where a branch doesn’t exist. The company has already done this for more than 20 employees.
Show your employees how much their perks are worth through a Total Compensation Statement.
Do you have a creative idea for giving your employee perks? Would love to hear it in the comments below!
by Joe Blattner | February 1, 2010
The need to reduce turnover is greater today than ever before. As the first of the Baby Boomers turn 60, many are beginning to retire. The generation just now entering the workforce contains about 33 million fewer individuals, meaning that employers are finding a much smaller pool of talent to choose from. This smaller talent pool makes hiring quality employees much more expensive.
To make matters worse, studies show that as the economy starts to turn around, employers will start to see higher turnover. Many employees have reported that they’ve stayed in their current positions because they had nowhere else to go, but they’ll start looking for better opportunities as soon as the job market turns.
In a survey by the Society for Human Resource Management, these employees were asked why they planned on searching for a new job as the job market gets better. The number one response given was that they were seeking better compensation and benefits.
While you may not be able to retain your employees by raising salary or offering more benefits, you could make them think twice about accepting other job offers by providing them with detailed benefit statements. You know the value of the benefits you provide, but chances are your employees do not.
By showing your employees the monetary benefits of their health insurance, 401(k), time off or even perks like free parking or cell phone service, you’ll readjust their perception of their current situation. This can help reduce turnover and, in turn, drastically reduce your hiring budget. The costs of employee turnover do not have to be such a burden.
View a demo to learn more about how benefit statement software can help you reduce turnover.
by Joe Blattner | January 18, 2010
A recent survey by Right Management asked over 1,000 people why they voluntarily left their jobs. The percentages don’t add up to 100 because many respondents provided more than one answer.
54% Downsizing or restructuring
30% Sought new challenges or opportunities
25% Ineffective leadership
22% Poor relationship with manager
21% To improve work/life balance
21% Contributions to the company were not valued
18% Better compensation and benefits
We can gather a few helpful ideas from these results:
- In an unstable economy, employees are looking for a place where they won’t be constantly worried that they’ll be the next to get laid off. If your company is currently in a stable position, emphasize that fact to current employees and new hires.
- Leadership matters. One of the top reasons employees have always given for job dissatisfaction has been dissatisfaction with leadership. If you experience high employee turnover, first look at your management.
- Employees want to love their workplace. If employees love coming in to work every day, they’ll stay with you even through hard times. To improve employee morale, give your employees jobs where they can best use their individual talents and show them how much you appreciate them when they succeed.
- While compensation matters, so do benefits. If you aren’t able to offer your employees large salaries, they’ll still greatly appreciate benefits like free food, time off and small rewards.
Show your employees how much their benefits are worth through an employee benefits statement. Request a free demo to learn more about how this benefit software works.
