The total rewards package employers provide their employees is one of their biggest expenses, yet many employers don’t communicate the cost of their benefits. Without better communications, employees can’t appreciate the true value of their total compensation because they have no way of knowing the costs. Total Reward Statements communicate the costs of benefits, direct compensation and fringe benefits to provide a personalized snapshot of an employee’s total compensation.
Research over the past decade reinforces the importance of effective total reward communications.
• In 1999, Watson Wyatt released The Word Is Mightier Than the Match, a research study that showed that 401(k) matching levels of 75 percent or 100 percent don't significantly improve plan participation compared to a 25 percent or 50 percent match with good communications.
• A 2007 study by Aon Consulting found that 90 percent of employees have a higher appreciation for the value of their employer-provided benefits after receiving total reward statements and 95 percent said they will save their statements and refer to them throughout the year.
• MetLife’s recent 7th Annual Study on Employee Benefit Trends finds that 43 percent of surveyed employers provide total compensation statements, and 73 percent of those who provide them say they are extremely or very effective in helping employees understand the value and cost of benefits.
What Prevents Many Employers from Doing Total Reward Statements?
The cost of effective, personalized communications has kept small and mid-size employers out of the market. Many find that they simply can’t afford to pay $1,000 to $2,000 in set up fees or up to $10 per statement or find that the size of their organization means that the consultant doesn’t want to work with them.
The market has been slow to respond with low-cost options for personalized employee communications. Web-based on-demand statement generators are changing the equation. Employers with 10 to 2,000 employees will find these to be a great option. Statement costs range from free to $1 to $3 per print-ready statement.
Finding the Best Solution for Your Company
On-Demand Statement Generators
DollarCompensationStatements.com
Dollar Compensation Statements addresses almost all of the major issues facing employers today offering:
• Consumer-driven health care versions to promote wellness programs and employer contributions to an Health Reimbursement Arrangement or Health Savings Account,
• Retirement-focused statements to promote contributions to defined contribution accounts and show future account growth projections, and
• General benefits layout promoting benefit levels, elections and the costs associated with all benefits.
Pricing for print-ready, total reward statements ranges from $1 to $3 per statement with no set-up fees and no minimum order. Statements are ready for review and purchase minutes after employee data is uploaded. All options include:
Introduction letter
Company logo
Attention-grabbing charts, layouts, and color choices
Quick turnaround
Data upload using Dollar Compensation Statements’ Excel Spreadsheet
Fields for various types of direct and indirect compensation
FreeTotalCompStatements
Total Rewards Software offers their free total compensation statement software free as an on-demand application. It includes:
• One layout option
• Personalized Introduction
• Full-color Pie Chart
• Manual data upload (users must purchase the Professional Edition to upload Excel data)
Free statements through Total Rewards Software do not include employee contributions or offer the flexibility to accommodate multiple types of direct compensation and may be limiting on the types of benefit options.
Other Options
Traditional total reward statement vendors include communications consultants, payroll firms, and benefits consulting firms which offer a variety of custom total reward statement options. Larger employers may want to explore both the on-demand options and the services of traditional total reward statement vendors. Before you select the best option for your company, consider the key message that you want to deliver to your employees, the set-up fees associated with different vendors, per statement charges, and the mailing costs associated with mailings in non-standard sizes.
There is a ton of research proving the value of effective total reward communications. Now you are armed with some new resources to increase your employees’ appreciation of their total compensation package.
