18 Jun Are Employee Compensation Statements Worthwhile?
Your employees know how much goes into their account on pay day, but do they really understand all of the ways in which they’re being compensated? Some compelling survey findings from the International Foundation of Employee Benefit Plans (IFEBP) reveal that they don’t. Results show that at least half of your employees probably don’t understand their benefit materials, meaning they also don’t understand the full value of employment. Luckily, employee compensation statements can solve this challenge.
What Are Total Compensation Statements?
Employee compensation (or total compensation) statements break down pay to help your associates understand all of the ways in which they’re being paid, which can extend far beyond base salary alone. In addition to base pay, HR Daily Advisor recommends including the following factors on compensation statements:
- Vacation, PTO, sick days, and any other unpaid leave
- The value of employer-paid portions of insurance plan premiums, including health, dental, vision, life, and disability insurance
- Employer contributions towards retirement plans
- Stock options
- Value of employee assistance programs (calculated on a per-employee basis)
- Additional perks, including cell phone service, company car, per diem payments, home office benefits, tuition assistance, and so forth
Why Doesn’t Everyone Offer Compensation Statements?
Clearly, detailing the many ways in which a company is compensating their employees is a beneficial practice. It can help the workforce see the “big picture” in terms of how they’re being paid. Yet, PayScale.com reports that only 40% of organizations provide compensation statements. Their research also reveals that top-performing companies are more likely to share compensation statements. So, why haven’t the other 60% followed suit?
The compensation planning cycle can be complex and resource-intensive. By the time many compensation professionals reach the end, there are often too few resources (time and money, namely) left over to dedicate towards producing compensation statements. With compensation planning software, however, compensation statements are a built-in feature. Since all of your compensation data is already digitized and stored in a centralized system, it only takes a couple of clicks to deliver digestible and informative employee compensation statements to your workforce.
HRsoft is the trusted global leader in compensation management software whose COMPview solution is proven to control and simplify the full process and allocation of merit, bonus and equity awards to drive manager and employee engagement.