Most employers communicate the terms and conditions of benefit programs at the time of hire and, for some benefits, during plan re-enrollments. Other than communicating employee required premiums, the employer costs of insurance-type benefits are rarely discussed and the cost of other benefits are almost never discussed. The benefits package represents the “hidden paycheck”; a sizeable expenditure intended to not only attract, but to retain valued staff. Why do we not take “credit” for this expenditure and clearly communicate with employees their Total Compensation Package?We advocate providing a simple, personalized compensation and benefits summary at least once each year. This summary would serve to remind and communicate to employees the direct cost of salary, bonus, pension/401(k), 401(b), profit-sharing contributions, insurance premiums paid by the employer for health insurance, dental, short term / long term disability, life and accidental death & dismemberment coverages. The vast majority of employees are unaware that their employer is also paying Social Security and Medicare taxes on their behalf, along with federal and state unemployment taxes.
In addition, employees should also be informed of the “value” that paid time off represents; the dollar value of sick pay, personal days, vacation days, holidays, leaves of absence, bereavement leaves, and jury duty absences. Adding the “value” of these items to the direct cost of benefits and then calculating the resulting total value of benefits as a percent of salary will provide an impressive and very informative compensation picture for the employee. It may even be an eye-opener for the employer.
Producing and sending a personalized summary of total compensation to each employee, at their home, can be a powerful strategy for building awareness, appreciation, loyalty, and morale. This is a relatively inexpensive process (both in terms of time and expense) which has a significant Return on Investment (ROI).
RGL Consultants would welcome the opportunity to develop and implement this communications vehicle for your organization.