Getting the Most out of Benefits Means Knowing What They Are
What good is having something if you don’t know about it? Whether it’s because you don’t know it exists, or you simply don’t know how to use it, how do you know if you’re reaping the benefits? The same goes for employee benefits. You could offer the best, most comprehensive benefits to your staff, but if they don’t have a full understanding of how to take advantage of them, you’re essentially flushing both of your money down the toilet.
A total compensation letter is a personalized document that summarizes the monetary and non-monetary benefits that an employee can expect to receive from their employer each year. At all times, the intent is to give the employee a complete view of the annual value of their pay and benefits.
It’s a way for the employer to communicate key messages about the organization’s values and strategic objectives and serves as a powerful marketing tool to promote the company’s culture and values through its compensation package. It provides greater transparency, which builds employee trust and provides an additional opportunity for employers to communicate and create a dialogue with their employees.
Keep in mind that total compensation statements can also be an effective recruitment tool. Creating a statement template that your hiring team can use during the hiring process to show the value of your total compensation package can be a great way to attract and retain top talent.
By being transparent and thorough, it highlights the employer’s true investment in the employee. Studies conclude that a lot of employees underestimate the value of their total compensation. Often, they acknowledge only direct compensation, not the unseen costs absorbed by the employer.
A total compensation letter serves as an “eye-opener,” revealing indirect payments the employee might have overlooked or didn’t even know about. They get to see the degree of their employer’s investment, which can ultimately increase their appreciation, commitment, and loyalty.
A new generation of rewards emphasizes well-being by offering benefits that address financial wellness, fitness, stress relief, mindfulness/mental health, and flexibility. Highly valued rewards can become competitive differentiators that make an employer stand out, and these can be emphasized as the organization’s overall brand or culture.
Today’s diverse employee base, full of millennials and Gen Xers, puts a high value on life-work balance, advancement and development opportunities, and recognition. Options in this area are endless and employers can be creative in developing programs and incentives that are in keeping with the vision, mission, culture, and operational strategy of the organization.
Some non-cash benefits you may consider include:
- Flexible work schedules
- Child-care assistance
- Social activities (annual golf tournament, Christmas parties, movie nights)
- Transit budget
- Free or discounted meals
- Spot rewards (gift certificates, store discounts)
- Job recognition awards
Something I like to do with my new hires and existing employees is regularly meet and discuss their total compensation. This gives a full 360 view of all areas of income, insurance, paid leave, vacations, and non-cash benefits, giving us the opportunity to openly discuss and ask questions.
Thinking of implementing a total compensation plan? A few best practices to get started are to remember:
- Be open and honest with employees about how pay is determined.
- Show employees the breakdown of their total compensation package; explain that their compensation goes beyond their paycheck, and that you are investing in their well-being through health and retirement benefits.
- Take a pulse survey (quick, regularly incremented survey) to ask employees about what is most important to them and what would make/makes them stay with the organization.
At the end of the day, you need to understand what your employees really want and need in order to come to work for you, and subsequently remain motivated and engaged. Taking the time to develop a total compensation package that fits your organization and its employees will go a long way toward attracting, motivating, and retaining staff, and will ultimately allow them and you to get the most of the most out of their benefits.
Photo by Gabrielle Henderson on Unsplash
