Why it’s beneficial to provide a total compensation statement to your employees

Pay and benefits are among the biggest deciding factors when an employee accepts an offer to work at a company. While a paycheck can show how much an employer invests in a worker, there’s much more under the surface that employees may not realize. Many employees aren’t aware of how much compensation they receive from their employers beyond their salaries. A total compensation statement can provide guidance on how much an employer invests in an individual.

What is a total compensation package?

A total compensation package encompasses the entire value of an employee’s compensation at a company. The statement mentions wages, which employees already know, but it also includes the hidden cost of the benefits that employers provide. 

What does an employer include in a total compensation statement?

A total compensation statement compiles the monetary cost of all forms of compensation on the part of the employer. It includes both direct and indirect compensation totals. 

Direct compensation is the gross wage, which includes salary and any bonuses or commissions that a worker earns. A statement also lists indirect compensation benefits and the value at which an employer contributes. Indirect compensation benefits include retirement plan contributions, insurance premiums and other employee benefits.

Other direct and indirect benefits that can be included in a total compensation statement are stock options, financial assistance for education and professional development, paid time off, wellness awards and relocation expenses.

Why should I send a total compensation statement to my employees?

Total compensation statements demonstrate to employees the monetary value the employer provides – beyond the standard paycheck. Outlining the total cost of all these benefits can be eye-opening for your employees and can help them better appreciate the compensation package you offer them. They can help increase morale and loyalty among employees. These statements, especially if your package is competitive, can also serve as a valuable employee retention tool.

Many employers do not offer total compensation statements because they require time and effort to assemble them for each employee. Don’t let this common obstacle stop you from sharing the value of your compensation packages with your employees! An employee benefits consultant like CanopyNation can support you in your efforts. If you need help getting started, contact our team today.