The Value of an Employee Compensation Statement
Many of the companies that are clients of our firm have created a compensation package, also known as an employment package or benefit package, that provides support and work / life balance for their employees.
With the skyrocketing costs of insurance and the necessity to manage human resources, compensation packages continue to be a challenge for most business owners. According to the Bureau of Labor Statistics, benefits make up approximately 30 percent of an employee’s compensation.
As a business owner, you know that the cost of an employee is much more than your employees’ wages. Paid time off such as vacation and holidays, contributions to a retirement plan, insurance premiums, social security, workers’ compensation, training and special programs are all items that comprise the total compensation of your work force.
Employees are aware of their base wages and overtime pay; however, many are not aware of the costs associated with their benefits. Providing a Compensation Statement to your employees at year-end will do just that.
A Compensation Statement outlines wages and benefits for each employee. It includes costs associated with their benefits as well as contributions and profit sharing.
Employees who are informed about their total compensation can appreciate and understand the costs associated with their employment. Awareness of all aspects of their compensation may contribute to the retention of these valuable members of your firm.
Additionally, compensation statements may assist owners in right-sizing benefits and contribute to decisions regarding benefits and their associated costs.
The next time you conduct employee reviews or at the end of each year, consider providing your employees with an Employee Compensation Statement. You will find them very informative for both you and your staff.
-Linda Nay
Linda Nay is an associate director and serves as the firm’s administrator. She works closely with the partners in the management of the firm, oversees the administrative department and serves as the firm’s human resources director and IT coordinator. Linda has been with the firm for 27 years. She has developed an Employee Compensation Statement for Whalen’s staff and has found it to be an effective communications tool.
If you’d like help in developing an Employee Compensation Statement, contact your Whalen adviser to learn how we can assist you.