Total Compensation: Why It’s Key to Attracting and Retaining Talent

The U.S. labor market remains strong, which means that employers continue to compete for talent. At the same time, companies do not want to pay more than they have to in order to bring on new employees (and retain their current employees). How can employers attract and retain top talent without breaking the bank?

Organizations that focus on total compensation may have an advantage. But in order to maximize that advantage, employers need to make sure that employees actually understand the value of their pay and benefits.

Employees who don’t understand the value of their total rewards are more likely to leave for a competitor paying a bit more – even if that competitor offers fewer benefits. For employers  trying to reduce the cost of employee turnover, it’s a challenging situation.

What can employers do to change the dynamic? Distributing total compensation statements is an excellent place to start.

Importance of Total Compensation Statements

Employees generally have a good grasp of their base pay and other cash compensation. But many individuals lose sight of the range of employer-provided benefits and perks. For an employer, what’s the value of a benefits package that employees don’t fully understand or appreciate?

Total compensation statements can help close this knowledge gap. Showing employees the value of their total rewards – the combination of their benefits and cash compensation – helps maximize the return on an organization’s investment in human capital.

Communicating the Total Rewards Message

On average, benefits make up around one-third of a typical employee’s total compensation. Unfortunately, the significant investment made in employee benefits often has less impact than an employer expects simply because employees lack an understanding and appreciation of those benefits. Distributing total compensation statements is an efficient and cost-effective way for an organization to communicate its total rewards story to its workforce.

Here at RewardsFocus we are dedicated to helping employers maximize the ROI on the investment in total rewards. Contact us today to learn more about how we can you tell your employees the real story of your investment in them.