Benefits will continue to be important for both talent acquisition and retention whether medical benefits are provided or not. And the next generation of total comp statement tools presents brokers with an ongoing opportunity. Different terms are used in the industry and following is a brief definition of the most common ones. Regardless of what you call them, the more comprehensive the statement the better the value to the employer.
Benefit statements: The traditional approach to benefit statements shows the cost for each employee's benefits. Most often a summary of benefits is displayed in a table or a pie chart. This type of statement includes employer or employee costs or both. More and more a typical benefit statement includes voluntary benefits and government-mandated benefits like social security and unemployment contributions. Each benefit is described and usually follows the summary of costs and includes details regarding the employee's level of coverage for each specific benefit.
Total compensation statements: A total compensation statement adds a comprehensive breakdown of the employee's compensation to the traditional benefit statement. The details include regular earnings, overtime earnings, referral bonuses, paid-time-off, retro pay, etc. Descriptions and guidelines for bonus pay or incentive programs are often provided and may include annual goals.
Total rewards or total value statements: As the names imply, these are the most complete of the different statement types. They go beyond a total compensation statement, giving a thorough overview of an employee's "total" package. These statements include compensation, traditional and work-life benefits, performance and recognition programs, and career development opportunities. Descriptions of the various programs and opportunities are presented to promote and encourage employee participation. Personally, I prefer the term total value.
Many employer groups have not invested in total value statements or have abandoned previous programs. Lack of resources or compliance issues are often stated as obstacles but, quite frankly, some employers' overall programs don't measure up. Other employer groups continue to produce statements but their programs lack the excitement of professionally produced statements. Value statements have traditionally been annual projects. Printed statements are either mailed to employees or provided to them at work. Online statements are usually available online for a short period of time. In both cases, the reason is because the information is static, meaning it is not updated on an ongoing basis.
Therein lies the opportunity. Obviously, the trend in most commercialization is toward online and mobile solutions. The next step, though, is to provide ongoing updates to total value statements, most likely on a quarterly basis. Think 401(k) or IRA statements. These are typically produced on a quarterly basis and are provided in print or online. The ability to do the same with total comp statements will be a great way to keep employees aware of the total value of working for a given employer on an on-going basis. And getting started now, given the turmoil surrounding medical benefits, is a great way for an employer to consistently and continuously communicate the total value of employment to all of their people. EBA
Lamb is VP and group head of the EbixBenergy business unit at insurance software company Ebix Health. Reach him at email@example.com.
Register or login for access to this item and much more
All Employee Benefit Adviser content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access