HotSpot: Employee Communications Blog

Effectively Communicating Total Compensation

Posted by Spitfire Communications on Jan 18, 2023 10:08:00 AM
Effectively Communicating Total Compensation

As an increasing number of organizations move toward complete pay transparency, the importance of informing employees about exactly how they’re compensated is a key part of the process. Total compensation statements are a way to paint the bigger picture by showing your employees the breakdown of their benefits and rewards beyond just base salary. 

Total compensation, when communicated effectively, can help boost employee engagement, retention and talent attraction while educating employees on how they’re truly being compensated. It’s vital to include the right information, adhere to certain best practices and arm your managers with the tools they need to engage in discussions with employees. 


Keep reading to learn how to communicate total compensation to your employees, so you can optimize the outcomes.


What is Total Compensation and How Does it Work?

A total compensation statement is a document that gives employees a full itemization of the monetary value of everything they receive from their employer in exchange for their services.

What Exactly Is Included in a Total Compensation Statement?

A standard total compensation statement typically includes the following:

  • Compensation elements like base pay, incentives, bonuses, overtime, etc. 
  • Time off benefits such as vacation pay, holidays and personal time
  • Insurance benefits like health care, dental and vision 
  • Financial benefits such as retirement plans, 529 plans, flexible spending accounts, health savings account, commuter reimbursement, life and disability benefits, tuition reimbursement
  • Other perks and rewards like free parking, adoption and childcare assistance, pet insurance, free lunch and more! 

How Does Total Compensation Help Employee Engagement?

Employees are more likely to be highly engaged if they feel valued by their company.

95% of employees receiving total compensation statements have a greater understanding of their benefits.


78% of employees receiving statements are more likely to stay with their employer.

Using total compensation statements to be transparent, demonstrates to employees that they’re appreciated, valued and rewarded for their work beyond their direct pay. Total compensation statements can provide a great opportunity to highlight benefits that employees may not be aware of or fully utilize. These elements are all key parts of a robust employee engagement strategy. 


Total Compensation Communication Best Practices 

Demonstrate Value

Reinforce the message that your employees’ compensation goes above and beyond their salary or paycheck and that you as their employer are investing in other parts of their well-being, such as financial wellness, employee assistance, retirement benefits and more. 

Highlight Confusing Topics

As previously mentioned, it’s best to get ahead of any questions or concerns by being clear right off the bat. Think ahead (perhaps from the feedback you’ve already gathered) and be prepared to answer your employees’ most common questions up front in your total compensation content.  

Add QR Codes 

You can deliver just-in-time training, information and videos about total compensation statements by embedding QR codes directly in your total compensation communications.   

Use as a Marketing Tool for Underutilized Benefits

A total compensation statement empowers employees by helping them visualize the many ways they can enhance their lives inside and outside the workplace. Highlight any gaps, such as an employee’s lack of contribution to their 401(k) or forgetfulness in taking advantage of something like tuition reimbursement or pet insurance. 

Inform and Empower Your Managers

It’s crucial to arm the people on the frontlines with the tools they need to effectively communicate total compensation. Teach your leaders and managers about your company’s salary ranges, so they know where their direct reports fall and why. Ensure each manager is able to explain compensation decisions and that they fully understand total rewards. Prepare talking points that help them communicate this information to their team members. 


Effectively Communicating Total Compensation is a Win-Win for Your Organization

Effectively communicating compensation to employees should rank among your organization’s top priorities. It’s arguably the most important part of any total rewards program, and it ensures your organization is getting the maximum value for its investments in its employee benefits and compensation. 

When rolled out as a regular part of a strategic employee communications plan, total compensation is a win-win for the entire organization.  

Tags: Employee Communications, 401(k), HR Communications, Employee Engagement, Open Enrollment, Human Resources, internal communications, communication strategy, Employee Marketing, benefit package, compensation statement, financial wellness, eap

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Spitfire’s very own blog, where we’ll shed light on best practices, insights, and experiences in the field of employee communications

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