One of the beautiful things about integrated total compensation is that it’s easy to get – you can buy if from any one of hundreds of vendors. (there are probably only a few dozen who actually do it well though). I said it’s easy to get, not necessarily easy to do.
Total compensation is really a mix between current cash that you can get out of your payroll system, current benefits you can get out of your benefits system (but sometimes you’ll need the individual benefit vendors) and your retirement and equity plans. Unfortunately for the last, you’ll almost definitely need those vendors to give you current snapshots of employee account balances.
The first item of beauty is simple – employees never realize how much you as an employer spend on them. From free wages (vacations and sick) to taxes and benefit contributions, your rates are usually at least 20% higher than what the employees see on their checks.
The second item of beauty is also somewhat obvious – Total compensation is not only a representation of the total worth of the employers and employees contribution to current cash and future investment, it’s also a tool that allows projections and planning to be made. By allowing employees to model future net worth based on retirement and stock, you are able to give them a picture of wealth that serves as a deterrent from taking a job with another company purely for pay.
Once again, good integration drives employee engagement and retention.
One response to “Total Comp Integration”
I agree that TC statements can help retain employees, and even help with the recruitment of new employees, by helping them understand the “big picture” of compensation. What I find is that many on-line tools want to take it a step further with modeling future worth. Well, if everything I read is correct about people changing jobs at least four times in their life, then the modeling tool only gives part of the picture. Why don’t we leave modeling to the financial institutions (they have better tools now anyway) and leave the TCS to really tell the story of what the employer pays compared to what the employee pays.