![]() Salary inquiries from employees or job candidates can be a minefield for employers. As a business owner, you know the value your employees are getting is much more than their baseline salary. Responding to salary inquiries with: âThis role pays X amount of dollarsâ does not properly showcase the true value of a role, and doing so may beget your organization an incidental disservice. The truth is, if youâre responding to salary inquiries with a base salary figure, youâre not showcasing the total value of what youâre offering employees and potential candidates, and youâre missing a great opening to cultivate positive employee engagement. Total Compensation StatementsA total compensation statement is a document with numerical and graphical information that shows a full breakdown of salary, benefits, and other rewards and includes both direct and indirect compensation. Direct compensation includes compensation that goes right into employeeâs pockets, such as:
Indirect compensation includes compensation not directly paid to an employee, such as:
What does a Total Compensation Statement do for my business?Utilizing this progressive and informational tool can bring several benefits to your business. Some of the benefits of a total compensation statement include:
Total Compensation Challenges and OpportunitiesTotal compensation statements, however, may present new challenges to business owners. But no worries, these challenges are opportunities to develop your organizationâs brand and reputation. Letâs take a look at some of the challenges total compensation statements present and the opportunities that can arise from them:
Challenge: Employees may view total compensation statements as an organizationâs method to avoid giving out raises.
Opportunity: When providing compensation statements, you have to make sure the message is right. Be transparent and honest: make sure you explain the advantages of the total compensation statement, why you are showing them this information, and how this encourages an open dialogue about compensation.
Challenge: Employees may start to wonder how their statement compares to their colleagues.
Opportunity: Total compensation statements allow businesses to audit themselves and ensure that they are compensating their employees fairly. As such, businesses should use these tools to help eliminate pay inequities and eradicate any worry about employees discussing their pay with each other.
Challenge: Total compensation statements require a high degree of accuracy to produce.
Opportunity: Maintaining accurate pay records and benefits information goes a long way in ensuring these statements correctly reflect an employeeâs compensation and presents an opportunity for businesses to review their recordkeeping and payroll information for accuracy. One tip is to not go overboard and tally up every penny, like free snacks in the break room. Adding too many immaterial items can create an administrative headache, leaving you open to a lawsuit. Focus on the things that make sense, like salary, paid time off, mileage reimbursements, employer contributions, etc.
Challenge: Employees are expressing frustration about voluntary benefits they donât use.
Opportunity: Managers should be trained on how to explain total compensation statements to employees. This is an opportunity to give your managers the proper knowledge to communicate the essentials, including the value of certain voluntary benefits being available to employees, even if the employee is choosing not to use them. Voluntary benefits are designed to provide for the whole of the organization, and thereâs value in having such a benefit available to employees even if itâs not actively utilized. So, reviewing a total compensation statement with an employee gives the manager the opportunity to explain the value of voluntary and involuntary figures and discuss what resources an employee can use to determine voluntary benefits that are or are not best for their financial health. ConclusionTotal compensation statements are extremely useful tools that can help you retain your top talent, improve your teamâs overall morale and contentment, and provide a new level of education and transparency about how you compensate your employees. If youâre looking for a new way to boost your organizationâs employee engagement, this tool might have a place at the top of your to-do list. If you need advice on implementing total compensation statements, reach out for more information on partnering with one of our Human Resources consultants. via EnformHR, LLC https://ift.tt/X0ieVjR
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