Do your employees know what they’re actually worth? The numbers on their paycheques and where they stand against the market tell only part of the story.
There’s a big difference between paying people and investing in them. Salary is transactional; a fee for service. You make investments because you appreciate the value in something and sense it can grow. It’s a deeper commitment.
As part of recruitment, retention and overall motivation, sharing information on total investment can be critical. “It reinforces that your people matter. And they go the extra mile,” says Caroline Kugelmass, president of Excel Benefit Consulting in Calgary.
On top of the base wage, calculate everything that can be considered part of compensation: medical and dental benefits, other insurance, subsidies for wellness programs, health-care spending accounts, additional vacation days, etc. Also, look at perks (from free meals to free parking) and the cost of professional investments such as seminars, conferences and other training.
Add it all up and the overall investment can easily equal 1030 per cent of salary, suggests Kugelmass. Communicating these calculations to staff (whether in compensation statements or as part of performance reviews) will provide a true picture of the value you place on them.
Knowing the numbers can make a huge difference. For instance, helping employees grow their skills and knowledge makes them a more valuable asset to the company. But it can also boost their own sense of worth to see what you’re devoting to their professional development.
Studies show a strong link between employee understanding of their compensation and satisfaction. HR staff and benefits advisors can crunch the numbers. What you spend on employees is not a cost but an investment. When employees understand that investment, they feel more invested. Assuming they love the work they do, why would they leave?
“If employees have a sense you care about them some of that is quantitative and some of that is an intrinsic feel it creates huge loyalty,” says Kugelmass.