Benefits - The Hidden Paycheck
by Richard D. Galbreath, SPHR
rick@performtogrow.com
Ask the typical employee how much they are paid and they’ll tell you about their salary. A few will also tell you about overtime or bonuses they receive.
Very few employees, even those with extremely rich benefit packages, fully appreciate the true cost of the benefits provided to them. Ask the average employee with family health coverage what it costs, for example, and they’ll tell you what comes out of their check every payday.
Even though many people are vaguely aware that their company “chips in” something toward the cost of health care and other benefits, they don’t really know how much. The day an employee with family health coverage exits your company and finds out what it costs to continue their family insurance, they are often aghast. How could insurance cost so much?
Smart businesses today are letting their employees know what their benefits are worth. Since the average business spends approximately 30 cents on benefits for every dollar they spend on base wages, extra attention needs to be given to communicating the value of these benefits to employees.
First, Figure Out What Benefits You Provide
A listing of benefits might include, for example:
· medical insurance;
· dental insurance;
· vision insurance;
· flexible spending accounts for dependent care, medical care and health savings accounts;
· life and accidental death or disability insurance,
· short- and long-term disability insurance;
· paid time off - vacation, holidays, sick time, personal time, bereavement leave, jury duty pay, paid breaks;
· mandated benefits – Social Security, Medicare, workers’ compensation, unemployment;
· retirement plans;
· tuition reimbursement and training provided;
· company events and conveniences;
· overtime, shift premiums, non-production bonuses and related payments;
· employee discounts on company products or services;
· use of company vehicles, cell phones, laptops and other miscellaneous benefits.
Next, Figure Out Benefit Cost For Each Employee
While this sounds like a lot of work, it is manageable for even the smallest organization. Insurance bills and other costs are readily available.
Compute the value of the benefit provided for each employee. Some employees have family medical insurance; some employee-only. Both the company’s and the employees’ costs are often impacted by this factor. Give people real numbers if you want them to really appreciate your efforts on their behalf.
Repeatedly Tell Employees (And Their Family Members)!
The old saying “The squeaky wheel gets the grease.” is true. You want to let your employees know what you are doing for them on an ongoing basis. We are all so busy it is easy to lose sight of the value of benefits. Consistent, quality reminders are both helpful and appreciated.
There are a number of ways to get the word out to employees. Here are just a few:
· New Employee Orientation - When an employee starts work they should be provided with a summary of all benefits offered to them, how and when to enroll in the different programs, costs (both company and employee) per pay period. It is often a good idea to reorient the employee after a promotion, increase in salary or transfer.
· Hidden Paycheck Documents – Hidden Paychecks are simple, easy to understand documents that detail each employee’s total compensation – both base pay and benefits. Hidden Paychecks should be sent to employee’s homes so that the spouse can have access to this valuable information. Some organizations develop their own hidden paycheck documents. Many more outsource this project to a third party provider.
· Paycheck Notes - Short notes can be put on paychecks or in paycheck envelopes to remind employees of available benefits and how much they cost. This is also a great opportunity to help employees properly manage their benefits. A company can remind employees to consider using mail-in prescription drug programs, investigate the savings available through pill splitting and other similar ideas.
· Web Site, Intranet, Company Bulletin Board, Newsletters – Companies that have Web sites or intranets should use them to further educate both existing and prospective employees on the value of their benefit packages. Also, old fashioned paper postings on bulletin boards and in newsletters, periodic company memos and related communications also help keep the value of benefits provided top of mind.
· One-On-One Benefit Reviews – Schedule a meeting with each employee once a year to go over their benefit selections and their value, and answer any questions the employee has about their use. Sitting down with someone for a few minutes is often a very-appreciated and effective way to share information on benefits.
You invest a lot of money in employee benefits. Invest just a little more time in helping your employees understand their cost and you will increase both their and your organization’s perceived value.
Rick Galbreath, SPHR, is president and founder of Performance Growth Partners Inc., a full service organizational improvement firm specializing in HR audits, corporate outplacement services, customer service assessments, customer service training, supervisory training, employee surveys, employee handbooks, teambuilding programs and team training, on-call and project-based HR consulting services, outsourced HR services, employee retention programs, performance improvement programs, executive coaching, manufacturing process and operations improvement consulting, training and programs, safety assessments, safety training, strategic planning, employee retention program, performance improvement programs, interim executive placement, conference speaking, keynote addresses, business turnaround consulting and a wide range of other services. Contact Rick toll-free at (877) 739-4747 or e-mail him at rick@performtogrow.com.
© 2007 Performance Growth Partners Inc.
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