Do your employees appreciate all you do for them? Do they recognize the value of the benefits you provide? Do they factor in those benefits when they consider how well they’re compensated? Do they even know what all their benefits are?
According to the Bureau of Labor Statistics report, “Employer Costs For Employee Compensation,” in 2013 benefits averaged 28.8 percent of an employee’s total compensation in all service occupations including retail.
The benefits in the BLS’ calculation comprise both voluntary—scheduled overtime, paid time off, all forms of insurance (medical, dental, vision, life, disability), retirement savings—and legally mandated benefits–Social Security, Medicare, workers compensation, federal and state unemployment insurance.
As an industry, retail is notorious for its skimpy benefits. But some supermarket chains, such as regional player Wegmans or our own industry’s Whole Foods Market, make their generous benefits a tool for recruitment and retention. Whole Foods adds a store discount, gainsharing and stock options to the standard package, while Wegmans cites employee wellness programs, adoption assistance and scholarships.
“But we’re a small business,” you may think. “We can’t afford benefits like those.” Maybe you can’t, but you could enhance your employees’ satisfaction with the benefits you do provide if you showed in dollars and cents what they’re worth. You could reveal the contents of what compensation experts call the “hidden paycheck.” You could follow the lead of many larger corporations and organizations by giving your employees individualized Total Compensation Statements.
Each statement is unique, customized to the individual. You could show compensation in annual terms. But for hourly employees, it may be more powerful to show each element of compensation per hour. See sidebar for an example of a real life employee at a retail with 120 staff.
|Regular Earnings||$10.00||Medical Premiums Paid by employer||$1.56|
|Holiday Earnings||$.15||Dental Premiums Paid by employer||$.18|
|Bonus Earnings||$.59||Life Ins. Premiums Paid by employer||$.25|
|Overtime Pay||$.09||401K Matching Contribution||$.25|
|Cash Earnings Per Hour||$10.83||Non-Cash Benefits, Voluntary||$2.00|
|Employee Discount||$0.27||Federal Unemployment Insurance||$0.01|
|Sick Pay Taken||$0.60||State Unemployment Insurance||$0.01|
|Vacation Pay Taken||$0.86||Medicare paid by Employer||$0.06|
|Bike to work Benefit||$0.02||Social Security Paid by Employer||$1.02|
|Health Reimbursement Account||$0.05||Workers Comp Insurance||$0.02|
|Cash Benefits Per Hour||$1.79||Mandatory Employer Contributions||$1.13|
|Total Cash Earnings||$10.83|
|Total Employer-Paid Benefits||$4.92|
Total Compensation Per Hour $15.76
There are other benefits that might take time and effort and guesswork to quantify, e.g. the free food that employees take home—the deli and produce items past their prime and samples given by vendors—or the costs of putting on the staff picnic and holiday party.
A Total Compensation Statement can’t measure the intangibles: freedom to be an individual, flexible schedules, growth opportunities, healthy lifestyle and great coworkers. But it can remind your people of how much you value them.