Higher compensation is the top reason employees are leaving their companies, according to a 2022 survey on retention conducted by BambooHR. Giving every employee a salary boost in order to compete with the companies poaching your talent is great in theory, but you have a realistic budget and industry standards to stick to.
But salary or hourly pay isn’t the full picture when it comes to compensation. In fact, research from the U.S. Bureau of Labor Statistics found that, as of 2020, benefits make up an average of 30 percent of an employee’s total compensation. That’s a huge piece of the pie your employees might not realize you’re providing them. Effectively educating employees on their entire compensation package, not just their salary, can help you attract top talent and reduce turnover
(Bonus: There’s a free total compensation calculator below!)
What Is Total Compensation?
Total compensation is a sum of salary or hourly pay (direct compensation) you give your employees plus any additional compensation that is not paid directly to them (indirect compensation).
Indirect compensation may include (but is not limited to):
- Holiday pay
- Vacation pay
- Sick day pay
- Medical insurance
- Fitness reimbursement
- Parental leave
- 401(k) match
- Annual bonus
- Stock options or grants
- Professional development budget
- Tuition or student loan reimbursement
- Charitable matches
- Volunteer hours
- Life insurance
- Relocation expenses
How Do You Calculate Total Compensation?
We made this part easy for you! Simply download this total compensation calculator template with some of the common indirect compensation fields already listed, and finish filling in the rest of the benefits you offer your employees. Enter the correct numbers, and boom! You’re done.
Download the Total Compensation Calculator
How Do I Share Total Compensation with Employees?
When you’re looking to hire, providing a candidate with not only the salary they’ll receive but also an understanding of the benefits you provide as part of their compensation will help them better compare offers. Plus, it will give them an opportunity to see the full slate of benefits you offer.
Sharing total compensation in yearly salary reviews can also be a way to help boost retention. Employees aren’t benefits experts, and many of them never open their paystubs or read past the salary amount. Reviewing total compensation helps your employees get a broad view of the dollar value your company provides in benefits. It also helps ensure the employee remembers the additional benefits you offer if they’ve forgotten about them in the years since you mentioned them in orientation. to make sure the employee is aware of and taking advantage of everything offered to them.
With our easy total compensation calculator template, finding your employees’ total compensation is easy. And it will benefit both you and your employees to have the full view of what they’re getting paid.
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