How many of you have had an employee that hands in his/her resignation letter, only to find out that they left for a raise of making $5,000/year more? Should all employee compensation be treated equally? As an employer, how good a job do you communicate what you really pay your employees or more importantly, how much do they take home? A Total Rewards Statement could make a big difference in curbing this from happening.
The truth is, very few employees have any idea what their employer pays to have them on the payroll. By the time you factor in the employers’ contribution towards salary, CPP, Employment Insurance, Workman’s Compensation and Employee Health Tax, that dollar amount is significantly more than what the employee sees. Factor in Employee benefit costs, refundable education expenses, gym memberships, Group RRSP, Deferred Profit Sharing or Pension contributions, vacation accrual and that take-home amount, can be grossly understated. So why don’t employers do a better job of communicating an employee’s total compensation?
The reality is, payroll doesn’t do a great job of capturing all this information or are not equipped to create something for employees.
Would an employee be as inclined to resign if they understood their complete financial picture? There are several variables that an employee weighs when deciding to leave a place of employment but it certainly wouldn’t hurt to wave the “look what we’re doing for you” banner once in a while.
Is Your Benefit Provider Offering You Total Reward Statements?
Total Rewards Statement is a formalized and personalized statement that every employee should receive at least once a year. It captures all the hard and soft costs that an employer extends to an employee. Very few employees realize that their employee benefit costs are typically greater than $3,000/year as an expense to an employer. That’s a huge cost to bear for a large employer. Factor in many other “perks” that an employer provides its employees and that $50,000/year salary really looks like $65,000/year with everything included. How relevant does that $5,000/year bump in salary to go to a new position look now?
Ask your benefits provider if they can provide a Total Rewards Statement for your employees. If they can’t, it may be time to look for a new benefits provider that can.
Chris Coulter is the Founder and President of The Finish Line Group. He works with business owners to leverage their businesses to increase their wealth, reduce corporate and personal taxes, create viable succession strategies, enable employee retention strategies and allow Business Owners to exit their businesses on their terms.
Chris’ passion for what he does evolve from the mistakes he made in his first business; by not diversifying his risk and not utilizing a lot of the opportunities within his business to create significant wealth. Chris found out the difficult way and now educates business owners on how to avoid many of his former oversights and ultimately control where their finish line ends.