Organizations who are committed to staying competitive in today’s talent market should consider a compensation communication strategies in 2022.
And while HR has been busy with a bottomless list of issues the last two years, compensation strategy is surging in importance for most employers — as they determine how to compete for and retain top talent in the current and future economy.
Implementing a winning total compensation strategy starts with clear, concise employee communications. Keep reading to learn the best practices for communicating your total compensation statements to your employees.
The Purpose of Compensation Communications
A commitment to pay equity can’t be fully appreciated by your employees if it’s not being communicated to them clearly. Compensation communications ensure your people understand exactly how their salary, rewards, benefits and variable pay are determined. They also illustrate a clear career path that shows them how they can grow within your organization.
Compensation communications are a vital aspect of the overall compensation strategy, but they’re often completely overlooked by employers. This can have an adverse effect on employee engagement and retention, regardless of how robust your total compensation packages are.
Equip Managers with Talking Points
An essential step in rolling out compensation communications is arming managers with talking points to discuss pay transparency, even if pay structures are on the lower end. They should be prepared to address factors that go into setting salary, variable incentive pay and bonuses, where an employee’s salary falls within their position’s pay range, and how employees can acquire the skills they need to advance their career.
Keep Things Transparent
Nearly 55% of organizations want to be transparent and share pay ranges with employees, but only 33.6% are currently doing so. Transparency is a key aspect of all employee communications, as it builds trust with your employees. Employees don’t appreciate the wool being pulled over their eyes under any circumstances, especially when it comes to their pay.
The Benefits of Total Compensation Communications
Keeps Employees Up-to-Date on Benefits
Aside from the Open Enrollment period, many employees don’t spend all that much time studying their benefits package. Total compensation statements offer employees a detailed view of their current benefits and the ones available to them throughout the year. This includes the benefits they may not realize are fully-paid by the employer.
When employees sit down with their total compensation statements, the benefits information provided can help them see their many paths to future physical and financial wellness. This can create an empowering feeling for employees, which can reinforce their sense of loyalty to the organization, enhance their productivity and even increase retention rates within your company.
Underscores Employer’s Commitment
It can be difficult for employees to visualize, in black and white, how much their employer actually contributes to their benefits and compensation. By providing an accurate depiction of direct pay and benefits, employees can fully understand just how much the company is investing in them.
Reduces Admin Time and Resources
Since total compensation statements are inherently a self-service tool, they reduce the amount of time HR professionals spend answering questions about employee pay and benefits. This means they can redirect their attention to more pressing or strategic issues within the organization.
How to Effectively Communicate Total Compensation Statements
To effectively communicate total compensation statements to employees, there are three essential best practices to follow:
1. Keep Communications Simple
Avoid using lengthy calculations or industry jargon in your total compensation communications. Keep communications reader-friendly by relying on visual elements like infographics, charts, bar graphs and other ways to represent complex information. If you deployed an employee survey recently, try to highlight the benefits employees value most upfront to show you’re listening to their feedback.
2. Tell a Story
Use your total compensation statements to tell a story. Make it compelling. This isn’t just a regurgitated version of your benefits manual — it’s a representation of your commitment to investing in an individual. It should be personalized and aligned with your employer brand and incorporate key elements of your company culture.
3. Make Sure It’s Well-Timed
Timing is key when it comes to total compensation statements, and it’s up to you as an employer to decide when it’s convenient for your organization. But, one best practice of total compensation statements is being strategic about the timing of their release. The lead-up to Open Enrollment can be a particularly advantageous time, since it gets employees thinking about their benefits packages. You may choose to wait until the end of the year or time total compensation with performance reviews, but it’s generally wise to send out statements while employees can still make changes to their benefits elections.
Find The Right Communication Partner
Deciding who to work with has a major impact on the quality and effectiveness of your employee communications. With a consultant or big name marketing agency, you’re often forced to fit communications into an existing structure or pre-established template. This “cookie-cutter” approach to employee communications might be all that’s available to your organization.
Specialized employee communications firms like Spitfire Communications are subject matter experts in all things employee communications, HR, benefits and compensation, and they’re passionate and proven to be effective in what they do.
Every communication strategy is one-of-a-kind, so you can get a true return on the investment you make in your most important asset: your people.