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Simon [email protected] Tel: 020 7856 7349

Total Reward Statements:Maximising your investment in reward


2 Total Reward Statements

What are they?

Why do organisations issue them?

In what situations?

Typical implementation process

Critical success factors

Statement contents & examples

Summary


3Total Reward StatementsWhat are they?


4Total Reward StatementsWhat are they?

A total reward statement is a personalised statement of the tangible remuneration and benefits offered by the employer. It will usually detail the value of the major cash and non-cash benefits, and may include illustrative graphs or charts

Can be used to communicate wider reward messages and less tangible benefits such as flexible working, training & development, etc

Effective in developing or reinforcing a branding for reward and benefits within an organisation

Paper based or on-line


5Total Reward StatementsWhy do organisations issue them?

A total reward statement can help organisations maximise the return on their reward investment by ensuring that employees understand all the components within their package, together with the value of them.

Typical spend on the benefit elements of the reward package accounts for 20%-30% of salary expenditure. A recent survey showed that 78% of employees estimated the cost of benefits as less than 10% of salary. Total reward statements will help increase the perceived value of the package on offer.

A statement makes employees aware of the total value of their reward package and so may discourage them from moving elsewhere for a small increase in basic salary.

Stepping up benefits communication effort is a relatively inexpensive exercise when compared to the cost of providing the benefits themselves or direct and indirect costs of staff turnover.

Sends a positive message to staff: “We care about you”.


6

“I’ve never seen employee communications be so professional” – Executive Committee member on receiving total reward statement

“Increased the level of benefit awareness amongst employees, increasing take up of some benefits and saving employees money” – HR Director, following issue of statements

“In tandem with other exercises they really energised our employees around flexible benefits, we’ve never seen a take up rate so high for one of our briefing sessions!” – Personnel Director, commenting on statements used as part of flexible benefits launch

“Total reward statements helped improve the results around reward in our employee survey” – Head of Reward

Total Reward StatementsWhy do organisations issue them?


7Total Reward StatementsIn what situations?

Appropriate for almost all organisations wanting to enhance perceived value of reward packages.

In particular those with:– Range of non-cash benefits (e.g. pension)

– Range of less tangible benefits (e.g. flexible working)

– Voluntary / Salary sacrifice (e.g. Childcare vouchers)

– Share schemes (e.g. SAYE)

Or:– Introducing flexible benefits

– Undergoing changes to package


8Total Reward StatementsTypical implementation process

Typically two to three monthsConsider pilot

ProjectPlanning

Understanding of objectives

Auditcurrent policies

Draft statement

design

Determine valuation

methodology

Audit data availability

Data collection and validation

Build databases

and programme calculations

Produce and

distribute statements

Wider communication and engagement


9Total Reward StatementsCritical success factors

High quality, accurate employee data

Robust, defensible valuation methodology

Clear simple communication style consistent with employer’s brand

Personalisation

Communication strategy


10Critical success factor:Data quality

Data availability

Consistent benefit policies

Anomalies

Multiple sources (pension, cars, share schemes, etc)


11Critical success factor:Valuation methodologies

Meet organisation’s requirementsFair and comprehensible to employeesConsistent with any other previous communicationsFuture proof

Issues to consider include:– Whose cost?– Defined benefit pension schemes– Share schemes– Holidays– Amount of personalisation– Policy value vs personal entitlement– Benefits not taken up


12Total Reward StatementsTypical statement contents & examples

Covering letter

Personal details

Summary charts and/or tables

Fuller breakdown and description of benefits

Other non-tangible benefits

Voluntary benefits



personaldata

letterfrom CEO

branding

piechart

summarydata



More detailon key benefits

branding

Detail onother benefits



keybenefits

brandingWelcome screen

& introduction

glossary& FAQs



Detaileddata

Plan details Links to

moreinformation


17Total Reward StatementsSummary

Do:– Ensure accurate, available data– Value benefits using a fair, robust methodology, capable

of explanation to employees– Have a clear, branded design– Personalise as far as possible– Include non-tangible benefits

Don’t:– Cut corners– Oversell benefits– Just publish numbers– Stop!


Total Reward Statements:Maximising your investment in rewardSimon [email protected] Tel: 020 7856 7349

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Total Reward Statements: Maximising your investment … · Total Reward Statements: Maximising your investment in ... “I’ve never seen employee communications ... Total Reward