If there’s one thing I know from being an Employee Benefits practitioner, it’s that most employees don’t fully understand the depth and breadth of benefits offered by their employer.
Though your benefits package may be quite substantial, the effort you put into designing a competitive benefits program may fall flat if your employees don’t understand its true value. To assist your employees in fully comprehending their benefits package, consider providing a total compensation (benefit) statement.
Total compensation statements highlight the monetary value of your benefits package, including the perks that may be overshadowed by traditional benefits.
Typical total compensation statements may include the following: Salary, Bonuses, Commissions, Stock options, Stock grants, Employee stock purchase plan, Retirement plan, Social Security contributions, 401(k) matching contributions, Paid time off, Coverages for health, life and disability, Wellness rewards (discounts, cash bonuses, etc.).
Providing these statements increases employee awareness of how much the company spends on their benefits. Informing employees of the behind-the-scenes expenses that the company covers can increase retention rates and morale.
Another reason to provide total compensation statements is that health care reform requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. For employers that file fewer than 250 Forms W-2, this is currently optional. Providing total compensation statements may make providing this information at tax time easier.
We have helped our clients design and distribute total compensation statements for their employees. We’d be happy to help you, too.