Total Compensation Statements and Employee Retention
Total compensation statements are key to helping employees understand exactly how much more value they are receiving from your company on top of their monthly or yearly salary. Owning full comprehension of this value can boost morale and help reduce turnover. This is because most health and compensation benefit packages are worth around $20,000 – $40,000 yearly per employee, depending on the job and the company, and more often than not, employees don’t realize this, or else they simply lose sight of these facts.
This is why it is essential to make sure every employee fully understands exactly how much a company is providing them for their compensation package. It is also important to realize that the facts, statistics and information designed to support this understanding is made easily available by delivering a quality compensation report. This simple report helps employees fully understand exactly how much value they are being offered in addition to their annual salary.
According to PayScale.com, per their Compensation Best Practices Report, “Employee retention is one of the biggest concerns of employers today, with 59 percent of those surveyed worried about losing their best employees to competitors and 67 percent concerned about the difficulty of finding skilled labor. If employers want to recruit better and retain their valuable workforce, a total compensation plan can be the first step.”
In the largest and most significant study for the performance of employee stock ownership (ESO) and compensation plans (CP’s) in mid to large companies, the study performed in 2000 by Douglas Kruse and Joseph Blasi of Rutgers University found that both ESOPs and CP’s increase sales, employment, and sales per employee. The study showed that ESOP companies are substantially more likely to offer other retirement and compensation benefit plans along with their ESOP, which proved to reduce turnover.
How to Increase Employee Retention Using Compensation Statements
To help employees understand the total of their benefits, compensation statements are one of the most powerful tools you can provide. Get the most out of your employee compensation statements by supporting your employees’ ability to see the real and full value they are bringing to your company. Companies do this by utilizing total compensation reports and statements as part of their annual employee reviews, and/or for year-end reports, and/or for recruitment.
Many employees simply do not realize the cost to the company, and value to the themselves, of health care benefits, disability insurance, social security guarantees, flexible spending accounts, free parking, paid time off and many other benefits. Helping employees comprehend this full value can lower company turnover. Understanding the scope of a company’s investment in an individual’s service also serves to transform perspectives once that employee fully realizes how much more they are valued as a member of your business.
Helping Companies of All Sizes Understand How to Benefit from Total Compensation Reporting
Employee retention often hinges on how valued each individual feels. Strategic utilization of compensation reports offers companies the power to improve turnover, while also motivating greater excellence and providing a level of transparency that delivers deeper levels of trust. In the past, total compensation reports were very expensive and only provided by the larger, leading companies. With the advent of online compensation reporting – originally invented by COMPackage – now small and large companies alike can implement them very affordably. For more information on total compensation reports, or to enable your own reporting system, visit COMPackage.com.