Some say that employees aren't motivated by money alone and that a competitive wage doesn't solely dictate the level of productivity and retention in an organization. That being the case, some employers focus on their social responsibility or volunteer efforts to attract and retain key talent. Others emphasize their unique value proposition and well-honed brand cache to attract the optimal candidate pool.
While all their efforts are important, there are still a host of good reasons to provide regular reminders of an employee's total compensation picture, including information about base salary and all the other benefits employees receive through their employer.
When added together and provided in a concise and comprehensive package, a total compensation statement tells a compelling story that adds some serious weight when employers get down to discussing the monetary value they invest in their workforce.
Before we address these reasons, let's take a closer look at what we mean by a total compensation statement -- also known as a total rewards statement.
What is a total compensation statement?
An employee's pay includes far more than just base salary and it can't hurt for an employer to provide reminders of such at strategic points during the year. It is a written document that provides a full overview of the benefits that an employer provides.
A total compensation statement should provide a clear picture of how much and to what extend an employer is investing in an employee.
What picture does it paint?
A total compensation statement may include a list of benefits and perks that extend far beyond an employee's base salary. While not every employer is able to offer everything on this list, what has been included here provides a collection of what commonly makes-up a total compensation statement.
Once an employer has gathered all the information they need to produce a statement and determined the value associated with each aspect, it is important to ensure that each statement is personalized and specific to the employee.
Whether an employer builds the total compensation statement in-house or outsources the exercise to a third party vendor, there is no small amount of effort required, but the pay-off can be substantial.
We're here to help.
There are many ways to communicate these important messages and we're well positioned to help you explore your options. We ready to have an introductory conversation with you or dive right in and help you get started. We invite you to contact us. As always, we're here to help so that you can focus on what you do best.
In a recent blog, I addressed Communicating Total Compensation and in this post, I dive deeper into the exploration of continuing education and common reimbursement policy criteria as part of the total rewards offering.
Whether it is a component of a company's approach to recruiting or a tactic for improving employee engagement and retention, continuing education and related reimbursement policies are becoming increasingly commonplace in our highly competitive work world.
Continuing education started back in 1907 at the University of Wisconsin-Madison and was introduced for adult learners who completed their undergraduate degree. Over time, it became evident that continuing education needed to be offered during evening hours and on weekends in order to accommodate the busy schedules of working professionals. Since the 1990s, the number of continuing education programs has rapidly expanded both in the number of academic institutions offering it as well as the number of enrolees.
There are many reasons for employees to go back to school. Some to boost their careers, and others are mandated to keep a license of certification. Many employers now recognize that continuing education is critical for the long term success of the organization as well as for the employee who gains an edge over the competition. Keeping skills and knowledge current and relevant is key. This is especially necessary in professions that require continuing education credits on a regular basis in such fields as: human resources, accounting, engineering and healthcare. Employers are also recognizing that employees who pursue continuing education or CE understand their professions and purposes on a deeper level.
A study by Spheroid Atlantic Enterprises, LLC found that 61 percent of employees who received reimbursement for continuing education were most likely to remain with their current employer for the next five or more years. Retaining top talent makes sense from a productivity and a return on investment standpoint.
Different forms of CE include: weekend or weeklong conferences, webinars, teleconferences, e-learning or classroom learning as well as training centres, university courses and degree programs. Commonly outlined in a CE policies are reimbursement criteria that includes:
* clarification of the course or degree sought and its applicability to the job or future position within the company, (generally a definition of 'job-related' is included in the policy wording)
* the potential of continued employment with the organization, (generally, contract or temporary employees are not eligible)
* a personal commitment or statement from the employee as to why they wish to pursue CE
* a description of the cost-sharing as well as clarification of employee reimbursement if the course is failed or if the employee terminates employment within a prescribed period of time,
* explanation of what the company will reimburse in terms of books, parking and mileage,
* allotted time off with pay for exam study time
* what happens if the employee relocates or becomes disabled and goes on a leave of absence
* requirement that the CE application form must be completed by the employee and his/her immediate supervisor
With regard to CE related to professional training and development that is not part of a degree program, employer criteria often includes:
*employment with the company and generally not within the employee's probationary period,
*prior written approval by the employee's supervisor
*employee attendance at all training classes and seminars.
Some employers place a cap on the CE program or tuition reimbursement levels based on years of service with the company and the amount may vary based on whether the employee is hourly or salaried. There are many aspects to consider when developing or revisiting a continuing education policy as part of the total rewards package. We have the resources and experience with our expanded service model through Gallagher Benefit Services Inc. and we invite you to contact us to explore your needs. We're here to help so you can focus on what you do best.
Often, one of the last questions a hiring manager or the Human Resources recruiter asks a prospective candidate relates to his or her salary expectations. This moment may be slightly awkward as the candidate states a number or a pay range (s)he wishes to secure. When the candidate and the employer's numbers align, it tends to be more of an easy sell, but what if there is a gap in the pay range expectation? What tends to get missed in this scenario is the chance to communicate a total compensation picture for the prospect. In this early pre-hire stage, talking about what the company contributes to the employee's well-being beyond wages helps to paint a more competitive picture in the overall hiring dynamic.
Wage compensation relates to the financial, material and extrinsic elements of the employee-employer experience and is generally reflected in terms of pay grades or pay scales. When it comes to total rewards or total compensation, this message should include benefit summaries and a host of other costs the employer pays along side the wage component of an employee's remuneration.
An annual benefits summary or total compensation statement has been a communication tool deployed by large companies for a number of years, but hasn't been a resource that many small to mid-size employers have easily embraced. It doesn't have to be an overly costly or complicated communication tool. In fact, a total compensation statement doesn't need to be more than a few pages long. It should capture a list of costs incurred by the company to retain, engage, train, and support the development of the employee. This list generally includes --
In essence, the total compensation statement clearly demonstrates what the employer does to show appreciation for the employee's work effort and dedication to the company. In many cases, it is only the traditional wage amount that seems to do the heavy lifting when it comes to performance and hiring discussions. Employers spend a great deal of their resources dealing with ways to attract and retain employees. The development and communication of a total compensation statement is a healthy way to increase awareness and transparency about the overall employer investment.
If you are interested in the development of a total compensation statement and would like a personalized snapshot of the value of many components of your employees' compensation arrangement, please contact us. We have the resources and expertise and are here to help so that you can focus on what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.