How to Communicate About Total Compensation

Perhaps you know this scenario. You have a great total rewards package for your employees – competitive salaries, benefits, professional development and training – even a comprehensive EAP. Everything is in place. Then, one day an employee asks you a seemingly simple question about their benefits. You ask yourself, “Why are they asking me this? Shouldn’t they know that already?” You may need to work on a key aspect of your compensation package – communication.

The Disconnect – Employees often think of their compensation as their base salary or wages only. However, an employer’s taxes, workers’ compensation insurance and paperwork can cost an employer an additional 30 percent in payroll costs. Such benefits as health insurance, dental insurance, employment insurance, additional training, vacation, sick days and RRSP (Registered Retirement Savings Plan) matching are well known by the Human Resources Department, but may not be by the employees. These details must be effectively communicated throughout the employment relationship.

The Delivery – Create a total rewards statement communicating the company’s total investment in the employee. This should be included in new hire orientation packages and be available throughout employment, such as through a company intranet. Include anything and everything with a dollar value. In addition to the previously mentioned items, be sure to mention merit or other increases, retirement savings, time off and variable pay opportunities. Itemizing everything of value will ensure understanding of the company’s investment and the employee’s eligibility. Don’t leave out details when communicating about benefits and comp. This missing information could lead to frustrated employees.

For example, an employee submits a claim after a medical procedure only to have it rejected due to coverage restrictions. The employee didn’t know about the lack of coverage and now doesn’t understand what to do. This person is upset, confused and worried about having to spend a lot of money. Don’t add to their confusion by using HR jargon. Use clear, plain language instead.

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HR jargon mostly consists of acronyms like EI, CPP and LTD. Instead, use the full title, like Employment Insurance, Canadian Pension Plan, Long Term Disability. Using realistic advice and relevant examples, also, will help ensure complete understanding of benefits coverage.

The Evaluation – Your efforts at communicating must be evaluated to ensure their effectiveness. Find out what people understand about their benefits to figure out what their issues are with the current explanations.

For example, after implementing a new type of communications material, test it with a cross-section of employees. The best way to test both sets of material is recreating the situation in which the employee would receive the information. Have them take the material home, review it and return for a one-on-one conversation with specific questions about the material. Do not do this in a group; people absorb less information in a group.

The Messenger – Make sure the employees’ supervisor and manager are well versed in your total rewards program. The best people to deliver the information and answer employee questions about benefits and compensation are those that know them best. Employees often feel most comfortable giving their honest opinions to those with whom they are closest. Supervisors and managers can then give you feedback on how their reports are responding.

The Timing – Communicate at all available opportunities. Some suggested times are during recruiting, on-boarding, promotions and transfers. Also, a significant life event, such as marriage, having children or approaching a particular age, e.g. families typically start around age 30 and retirement often comes in the 60s, is a perfect time to review and highlight certain aspects of their total rewards package. Employees may not be aware of the chance to upgrade to a family benefit plan. Besides, they have lots on their mind. It shows care on the part of the company to be proactive.

The Strategic Advantage – A well-communicated total rewards program can attract top talent. Study the market. What are the needs? Do a total rewards inventory. Identify affordable programs that will attract, retain and motivate employees.

Regards,

Tim Baker, CHRP
Consulting Services
HR Options, Inc.
www.hroptions.ca

HR Options provides human resource solutions that are uniquely suited to small and medium sized companies. They provide On-Call, On-Site and Off-Site support for a wide range of clients. Their areas of expertise include ensuring legislative compliance across Canada and the U.S., policy & best practice development, and outsourced employment. Their clients are typically positioned for growth in their particular industry and have reached a critical point in size and complexity that calls for a formally defined Human Resources infrastructure.

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