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.
Ask most employees if they’d rather have cash or non-cash incentives, and they’ll choose the cash incentives almost every time. However, as an employer, you have many other factors to consider when choosing an incentive other than whether or not employees say they want it. Carefully consider the benefits and drawbacks of cash bonuses before creating your incentive program.
Benefits of Cash Incentives
- Nothing talks louder than cash – Many employers find that as soon as they offer cash incentives for a task, their employees start working harder. For fast, effective gratification, few incentives work better than cash.
- Easy to distribute – Cash incentives require little extra effort on the part of an employer to distribute. Money can either be added to a paycheck or distributed as cash.
- Practical – Many non-cash incentives appeal more to some people than others. While some employees may not need a new iPod or tickets to a sporting event, everyone can benefit from a little extra cash.
Drawbacks of Cash Incentives
- Can become viewed as base pay – When employees receive cash bonuses on a regular basis, they can come to expect them as part of their base pay. For example, many people rely on their annual Christmas bonuses or quarterly commission checks to pay their bills. If these benefits ever have to be taken away, things could get ugly fast.
- Disappears quickly – Cash incentives are often quickly forgotten because they are spent on necessities – things like bills, debt or Christmas presents. On the other hand, even small non-cash incentives like movie tickets, electronics or gift cards are remembered long after they’ve been received.
- Takes the joy out of incentives – Non-cash incentives often make a more positive impact because they are viewed as “treats,” while cash incentives are often seen as more practical.
The best incentive programs often involve a mix of cash and non-cash incentives. To show your employees how much their non-cash incentives are worth, consider total compensation statements through COMPackage.
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:
“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.
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.
Employers are often perplexed by how much they should spend on employee benefits. How much is too much for things like vacation time or bonuses?
A recent report released by the U.S. Bureau of Labor Statistics showed that benefits make up about 30% of the average worker’s paycheck.
The report provided separate numbers for civilian, private, and government workers, but for the purposes of this article, we’ll just look at the private business numbers. The highest percentage of benefit costs for private employers was required benefits, at 8.2%, followed by insurance at 7.8% and paid leave at 6.8%
According to the report, an employee with an annual salary of $50,000 would have a total compensation of $70,721. That employee would be paid:
$5,800 for legally required benefits
$5,516 for insurance
$4,809 for paid leave
$2,405 for retirement and savings
$2,122 for supplemental pay
Show your employees how much their benefits contribute to their pay through a total compensation statements from COMPackage.