Total Compensation Statements Can Help Attract Retain Workers

Total Compensation Statements: Are You Touting this Powerful Retention Tool?

THE WORKFORCE HAS CHANGED.

By now, most employers know that retaining existing employees and attracting new ones is far different from pre-pandemic times. The available labor pool has diminished and filling openings has become a hamster-on-the-wheel exercise – lots of work but going nowhere. The result? Without a full staff, companies must turn down new business, customer service suffers and profitability takes a nosedive.

There is one powerful tool that many employers fail to tout: The value of employer-provided benefits to a worker’s total compensation. overwhelming. Although the numbers were included on the worker’s pay stub, all the employee noticed was the net amount of pay they were receiving. My direct reports were amazed at how much the company paid overall - not just in salary. Employees felt valued. Morale was boosted and most employees became more engaged. It was a win-win for the company and the employee.

Robin Seidman specializes in general HR policy and procedures. reseidman@ccahv.com

Most business owners offer a robust benefits package: Health, vision and dental insurance available to the employee and family, paid vacations, paid sick time, personal time and retirement plans are the most common inclusions. With the company paying part of the health benefit cost, the remaining premium is much more affordable for the employee. And while the owners can probably tell you to the dollar how much they pay toward these benefits, the workforce is generally clueless.

That’s where an annual Total Compensation Statement comes in. A Total Compensation Statement is a communication that is tailored to each individual employee. It shows how much the company pays annually in total salary and paid time off for that employee along with what it pays toward taxes, worker’s compensation, health, vision and dental benefits, short and long-term disability and any retirement benefits such as matching 401K contributions. It could include commissions or bonuses. By putting a dollar number next to each of these items, the employee generally has an “aha” moment – especially when they see the bottom line amount of total compensation. It is an eye opener for sure and may give an employee more to think about if they are considering changing jobs or leaving the workforce entirely.

I know from personal experience that a Total Compensation Statement works. When my former employer issued a statement to all employees a few years ago, the response was There are potential issues. For one, employees might share the information with other employees and if there are inequities, the employer must be prepared to address the differences. By the way, you can ask your employees not to share the information with others but you can’t stop them from doing so. Nor can you retaliate if they do.

Some employees might not trust that the numbers are true. That is why precision and accuracy are essential in preparing the statement. One mistake and the employee will lose all confidence in the information the company provides.

Many payroll providers will prepare the statements. For companies that don’t use a provider, simply search the internet for Total Compensation Statements and you will not only get detailed information but also templates that can be tailored to the organization’s needs. As with any payroll issue, it makes sense for an employer to run the idea past its CPA or legal counsel.

Losing and replacing employees equals recruiting and training costs as well as disruption to the work environment. Employee engagement and loyalty translates to higher productivity, better customer service and a happy workplace.

All companies can use a competitive edge especially when it comes to attracting and maintaining their workforce. The Total Compensation Statement might be the tool that keeps your employees engaged and loyal.

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Contact Robin Seidman at rseidman@ccahv.com or Millie Rodriguez at mrodriguez@ccahv.com 845-562-4280 ccahv.com