February 7, 2018
Do your workers understand the full extent of the contributions you make to their financial security? Employees understand the cash compensation they receive each payday. But studies show that few workers grasp just how much their employer pays into health insurance, pension plans, employer matches, group wellness plans, employee assistance plans and other costly workplace benefits. These plans are an important part of the total value package most employers offer to their workforce. Fortunately, an often overlooked tool can help close the perception gap: Total compensation statements.
According to a report from the Guardian Life Insurance Company of America, employees often miss out on needed benefits because of miscommunication. And employers miss a chance to cement the bond between employer and employee when they fail to communicate just how much it costs to have workers on the payroll.
Authors of the Guardian report recommend adopting total compensation statements as a standard practice. These statements don’t just list cash compensation, but also detail all the contributions and premiums paid by employers on behalf of workers. The purpose of the total compensation statement is to demonstrate to your workforce that their benefits go way beyond their net paychecks. So, if you’re hoping to retain your top talent, this nugget of information might help. Three out of four workers responding to a survey — also by Guardian Life —indicated that it was eye-opening to see the full extent of employer contributions to employee benefit plans. But only 30% of employers reported using total compensation statements on a regular basis.
Communication is Key
It’s not enough to stuff a total compensation statement into an envelope every month and forget about it. Guardian reports that it’s important to reach employees across multiple lines of communication. This includes not only total compensation pay stubs, but also extends to in-service workshops by in-house instructors as well as benefits, vendors and other experts. In addition, you can use a company intranet, envelope stuffers, newsletters, email, brochures, books and e-books, posters and much more.
Other recent innovations have made it easy for employers to create “how-to” videos to help employees navigate and use their benefits both in the office and on their own time.
For best results, ensure your managers are all on board with changes to benefits. Middle managers shouldn’t be blindsided when bad news like benefits reductions reach the rank and file.
Enlist Your Vendors
In most cases, a benefits expert or vendor will be happy to help assist you with the tools and resources you need to get the message out to your work force. Benefits communication is most important when making changes or upgrades to your benefits package, but the effort should be ongoing, year-round.