Total Compensation

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It’s easy to only measure employees’ pay in purely financial terms and their salaries. However, their total compensation is much more than that — and something that neither employee nor employer should overlook. Total compensation includes health benefits, Social Security, disability insurance, worker’s compensation, vacation days, sick days, etc. Sure, some of it is federally mandated, but a lot of it is paid out of the employer’s pocket as a way to protect the employee, both physically and mentally.

Your employees may sometimes forget that all of that is part of their compensation, so it’s good to remind them of everything that we pay on their behalf, including those government-mandated insurance accounts. These payments are insurances, to protect those who are important to us: our employees and, in some cases, their loved ones. For example, my company provides worker’s compensation insurance, all we ask in return is that they are safe on the job. We pay disability insurance, so if they become sick or injured, we can continue to contribute financially as they heal.

While these are all vital in creating a healthy work environment where your employees feel protected, wanted, and necessary to the company, it’s well worth your time to add up the costs you’re paying for all the included benefits you provide and show your employees that dollar amount. Explain how that amount is in addition to the amount on their paycheck. They may be pleasantly surprised to see how much you’re paying to keep them safe and protected.

And don’t forget their Social Security, which is being paid into their OASDI account every paycheck. Plus, your company may offer supplemental benefits — things like 401Ks, simple IRAs, and any of those voluntary insurances like Aflac, Colonial Life, Allstate. While many of these benefits are employee paid (except for any retirement match), it’s you is making these opportunities available to them.

Also, let’s not forget the other perks you can offer your employees to show that they are a valuable part of the team. For example, if you have free coffee in the break room every day, saving your employees a daily trip to Starbucks, you could be saving them five to ten dollars a day. Five days a week, 52 weeks a year, minus two for vacation—that’s a savings of $1,250.00–$2,500.00 in coffee alone. Outside the office, you can throw a company picnic or party, offer paid time off, help subsidize transportation into the office, etc. All of these things add up and are of both financial and emotional benefit to your workers.

For more tips on how to highlight employees’ total compensation, visit and schedule your free consultation.

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