Providing total rewards statements to your employees can not only help to improve their awareness of the value of their benefits plans—it can also help to retain and engage them.
According to Aon Hewitt’s 2011 Canadian Talent Survey, 32% of employers surveyed provide annual total rewards statement to employees. These personalized statements summarize each employee’s base compensation, as well as the value of healthcare benefits, retirement and other savings programs, vacation and any other rewards received.
“Total rewards statements can be extremely useful in helping employees gain a complete understanding of their total compensation,” says Diane McElroy, a senior vice-president with Aon Hewitt in Toronto. “However, the ‘next generation’ of statements goes beyond sharing information to driving action, enabling employees to make the best possible use of the programs available to them.”
Technology is a major factor in the evolution of these statements and in creating a successful call-to-action, says McElroy. “By providing online total rewards statements, employees can link to additional personalized information, such as past benefits usage or savings history. Employers can then use the statement to demonstrate the money lost by not contributing to a retirement savings plan with a company match or the projected difference in retirement income if the employee saves more. This may encourage employees to make additional voluntary contributions.”
Certain employers are also developing total rewards statements for a new audience. “Some organizations are providing these statements when they make offers to job candidates,” says McElroy. “That way, if the potential new hire receives another offer—especially one with a higher base salary—he or she can make an informed comparison and determine whether a bigger pay cheque really does mean greater compensation. This can be a smart approach in a tight labour market.”