The Game-Changer You’re Ignoring: Total Compensation Statements

Replacing employees is expensive. Retention-and employee engagement-are key.

It takes time which has a price. Advertising job openings, screening resumes, conducting interviews, background checks...HR and management labor costs mount up fast. According to Gallup, "an organization of 100 employees can expect replacement costs to be between $660,000 to $2.6 million annually."

Recruiting expenses range from several thousand dollars to up to four times the position's salary. This means it can cost as much as $225K-$300K to find a single employee with a $75K pay grade. Expect to spend-on average-50-75% of your departing staff member's salary to attract and hire a new one.

Meanwhile, your remaining staff has to take up the slack for several weeks or even months until the new hire appears. The extra work increases stress and damages morale, prompting more employees to quit.

Even when replacements arrive, it can take up to twelve months for them to become fully productive in their roles-according to one Gallup report. Despite management's efforts new hires might find the job is not a good fit and seek opportunities elsewhere.

Worst case scenario: you spent over a quarter million dollars on...nothing.

What is Total Compensation?

Total compensation is the sum value of all costs that the employer pays to an individual. It is a service HR can deliver to the masses which empowers their understanding of their true value at work.

For example:

Each of these items translates to a dollar amount.

Add them all up and you've got total compensation-the sum value of every pay and benefit line item that the employer provides to the employee.

What are Total Compensation Tools?

Total compensation tools are technologies for defining pay and benefits packages. Their strategies, reporting features, targeted audiences, and results vary by company. They are typically delivered as part of a Human Resources Service Delivery (HRSD) platform.

Tools for Management

Management-facing total compensation tools are for reviewing, benchmarking, and adjusting pay and benefits per region and market to ensure compensation is fair and effective. Managers can use their results to calculate salary adjustments and bonuses for their employees during the performance review process.

While fair pay does a fair job of keeping employees from quitting, these tools' reports are management-facing only. Their results are convenient for administrators but invisible to employees. They remain merely planning tools that do not fully contribute to employee morale. Thus, employees continue to be largely unaware of the true value of every cost their employer covers on their behalf.

Tools for Employees

A total compensation tool that delivers a transparent report directly to employees-a total compensation statement-improves understanding.

These statements help employees realize that their employer provides benefits beyond salary that are often overlooked or forgotten.

The Psychology of Total Compensation Statements

Employee-facing total compensation statements service HR objectives by improving retention, boosting morale, and improving engagement.

In meetings with management, employees arrive with the 50K number in their heads-their salary-and leave with the 80K+ number in mind-after seeing the total compensation statement their managers provided.

This "psychological switch" to a greater number sparks pleasant feelings similar to getting a raise even when no actual salary increase is offered. Employees feel more valued than before the meeting began. Their attitudes improve in minutes.

Your Rewards: Your Portal

Any Total Rewards Statement should incorporate your unique branding for a personalized experience. Your company colors, logo, and images seamlessly transition employees from your intranet to the Total Rewards Statement in your HR Service Delivery portal for a unified look and feel.

Improving Retention

Defining total rewards makes employees feel engaged. It takes only one meeting to get started.

Management can introduce Total Rewards to employees in a company-wide meeting, or in one-on-one discussions. After giving employees copies of their Total Rewards Statements, the next step is showing employees how to access their statements on their own which fosters feelings of autonomy. The freedom to choose is powerful.

Maintaining Retention

Managers can use Total Rewards Statements during performance reviews to boost morale by reminding the talent pool of all of the benefits available to them. Current and prior year dollar amounts showcase value growth over time.

Participation rates improve, especially in retirement plans. "Don't miss out on our 401(k) matching program-that's free money!" Hearing that phrase, "free money" and seeing the dollar value of that match on a report with their names on them spikes dopamine levels in the brain. Thus, by association, employees grow more confident that the company genuinely cares about their financial future. They become more invested in their work-literally.

Refreshing Retention

Periodic refreshes of Total Rewards Statements keep engagement on an even keel. Total Rewards Statements can be configured to refresh across the board on an annual, monthly, or bi-weekly basis.

Employees can access current and prior statements on their own. Managers can present the previous and current year's statements after a salary increase which maximizes employees' motivation to perform even better.

Maximizing Total Rewards' Potential

The Total Rewards Strategy helps your organization to thrive in the present and grow in the future.

Greater retention rates save recruiting dollars. As your company prospers, you'll be spending those saved dollars to recruit new employees-instead of replacing departing ones-because your company is expanding.

Your recruiters can use Total Rewards to help your company stand out from the competition. While top candidates win many offers from top companies, none of them provide a Total Rewards Recruiter Statement printout to take home with them. None but yours, that is.

While the salaries offered might be lower than competitors,' the Total Rewards Recruiter Statement illustrates the full value of your company's benefits and perquisites which can surpass counteroffers.

The True Original

Infor's HR Service Delivery model invented and launched the first total compensation application on the market in 2004. Infor Total Rewards is the true original.

With two decades of experience, Infor Total Rewards remains one of the most cost-effective total remuneration tools available.

The Ultimate Payoff

Infor Total Rewards can save you up to 50-75% of the employee's salary in recruiting costs.

Its contributions to morale, engagement, and performance: priceless.

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