Retaining employees continues to be a critical aspect of running a business. Offering clarity and transparency about compensation & benefits is a key strategy that improves job satisfaction and retention.
Building a Total Rewards Statement (TRS) internal process includes the designing, building, refining and the delivery of the end product. While not a simple undertaking, TRS are effective tools companies deploy to comprehensively convey the full benefits an individual receives from their organization, leading to improved retention and loyalty. Once the initial template and process are created, annual TRS statements become much easier to generate and deploy.
The Key Benefits of Adopting a TRS Approach at Your Company
- Increase employee awareness – because employees understand the full value of their compensation beyond base salary. TRS include bonuses, incentives, retirement contributions, health insurance, paid time off, stock options and more. A TRS packages and presents all this information in a clear and concise manner, resulting in greater employee appreciation for their overall compensation.
- Improve transparency – TRS promote compensation transparency and remove uncertainty, building trust among employees and the organization. This is particularly beneficial in today’s work environment, where employees seek transparency in all areas of their employment.
- Retention & Loyalty – When employees have clear understanding of their total compensation packages, they feel valued and are more satisfied in their roles. This leads to increased morale and loyalty to the organization. Employees who receive TRS are less likely to seek alternative employment.
- Improve Motivation & Performance – If employees see a direct link between their work efforts and the rewards they receive, this eliminates uncertainty and motivates them to do their best work.
- Employee recruitment – TRS can be used in recruitment to attract top talent. Sharing TRS with candidates displays the company’s transparent culture and elevates your organization’s competitive position in the market.
- Legal compliance – In certain jurisdictions, legal requirements demand that organizations provide detailed information to employees about compensation and benefits. Total Rewards Statements fulfill this need.
- Inform decision making – Employees who understand the various components of their compensation packages are better equipped to make informed financial decisions, such as budgeting and retirement planning. This translates to stability for your workforce through improved financial well-being.
- Analytics – TRS may also be used as a tool for HR and management to assess the cost effectiveness of various perks and benefits. This insight allows the organization to make data-driven decisions and optimize resource allocation.
Elements of a TRS
Common elements of a TRS include the following components, but it is important to note that each company needs to determine up front the specific items to include:
- Base Salary & Wages – This is the foundational element of the TRS. It is the employee’s regular pay rate, often expressed annually or hourly.
- Variable Pay / Bonuses – Any performance based, variable pay such as annual bonuses, commissions or profit-sharing fit here.
- Benefits – Health insurance, Retirement plans/401Ks, Life and Disability Insurance, Paid Time Off (PTO). This is where the company outlines its contribution.
- Stock & Equity awards – Stock options, restricted stock units (RSUs), or equity grants are listed here.
- Other Compensation – This category includes special allowances, car allowances, housing benefits, signing bonuses, etc.
- Total Compensation – This is the summation of all the monetary components of the employee’s compensation.
- Perks – These cover an array of programs. Examples of the most common include:
- Reward & Recognition programs – Information about employee recognition programs or awards
- Professional Development opportunities – Education and training paid for by the employer
- Wellness programs – Including gym memberships, wellness programs, etc. paid for by the employer
- Work-Life Balance – Detail about flexible work arrangements, telecommuting benefits, etc.
- Employee Assistance Programs (EAPs) - Mental health and counseling services provided to employees
- Total Value – this section summarizes all the rewards and compensation – usually presented as an annualized figure.
The TRS Process
If you are considering moving to TRS, here are considerations to review in advance:
- Determine the data to include and the layout and format for your company’s TRS that is most useful to your employees and accurately reflects your company.
- Where is your data housed and in what format? Gather the data with the understanding that it most likely comes from multiple systems/platforms. Often, software providers claim to offer one-stop TRS – but that offering only includes data available in their systems. This means that often, not all of the information you need to include in a TRS is consolidated, or it is limited to data in dollars only, excluding percentages and whole numbers you might need.
- Consolidate and clean the data – Because data points are coming from various sources, they must be aligned to your newly designed TRS data template fields. A professional TRS expert helps to ensure that the data are accurate and meaningful to each employee.
- Graphing – Visuals are important to TRS and generating individual graph files for each employee’s data, with the ability to customize data by job level, is desirable.
- Create Individual Documents – Personalized documents require technical savvy and experience to design and automate.
Questions to Consider
If the above list sparks concerns, here are a few questions to ask before you get started building your company’s TRS:
- Who on the team is best suited to know which data to include in the TRS?
- Who has the skillset to pull and consolidate data from multiple systems?
- Who knows how to create a TRS template with varying fields, and align the data based on your unique needs?
- Who can create and run macros to graph individual employee data?
- Who has the knowledge of how to transfer individual employee data from a master template and automate the creation of the individual employee TRS?
If you answered “I’m not sure” or “no one” to any of the above, consider bringing on a fractional Human Resources expert steeped in TRS design and development. These individuals quickly assess and design customized TRS processes and programs for your organization. As TRS experts, they know the right questions to ask prior to design, they know how to consolidate data from the trickiest platforms, and they have the tech experience to create individualized reports.
Growth Operators’ HR Growth Pros are experts at identifying and consolidating data from disparate systems into one master template, removing that painful task from internal HR teams. Additionally, we ensure the data are clean, accurate, and meaningful because we are HR and Finance experts who have done this work repeatedly in the corporate world, and now for our clients.
Start Your Total Rewards Statements System
At Growth Operators, we are poised to bring the right HR experts to assist your company with TRS. From design through delivery, our Growth Pros execute TRS better than any system available. They will lead the process, roll up their sleeves and execute the work, delivering comprehensive TRS end products that drive employee satisfaction. Want to learn more? Connect with our HR Growth Pros for a complimentary TRS discussion.