The Importance of Explaining Total Compensation Benefits to Employees
Being fully transparent with employees regarding their total compensation benefits allows you to guide them into realizing their true worth and value to the organization. Sure, most members of the workforce realize that their employment comes at an additional cost to the employer. However, they may not realize that employers are providing them with thousands of dollars in additional benefits. Below, you’ll learn about several uses for our software and why it can be such an asset to your company.
Below, I’ve outlined four potential uses when generating total compensation statements and reports.
1. Retain valuable employees. Increasing your employee’s job satisfaction through such transparency can aide in reducing turnover. Showing your employees just how valuable their skills and time REALLY are will make them feel more appreciated and increase job satisfaction.
2. Sway job candidates. Job seekers consider several defining factors when weighing job offers – arguably, the most important of which, is compensation. Providing a detailed compensation report can help you lure a candidate on factors beyond base compensation. If you put a total package out there, SHOW IT!
3. Performance reviews. Compensation reports can be especially motivating for employees when used during performance reviews. Use the reports to outline any raises and additional benefit costs that may be realized in addition to outstanding job performance.
4. Year-end Reports. Most employees don’t realize that they receive thousands of dollars in benefits in addition to the salary they’re paid, often in excess of 43% of base pay! Many benefits and perks, in addition to normal items such as paid time off, free meals, cell phone, free suburban parking, etc. are often overlooked by employees throughout the year. Providing total compensation statements can be motivating and inspire workers to start the year off on the right foot.
Why It’s Worth the Effort
When an employee comes to see that their compensation benefits amount to much more than the number reflected on their paychecks (which by-the-way only reflects net of taxes), it affects your business positively in more ways than one. Employees that are given a detailed breakdown of their total compensation are likely to experience higher satisfaction in the workplace due to their higher-than-expected compensation. This can create a higher sense of self-worth, a higher sense of employer value provided, and can lead to a more productive and loyal employee.
