Compensation Communication for Job Candidates
Transparency in compensation communication should start during the recruitment phase. Few organizations fully leverage their ability to attract quality candidates when making a job offer. Most offer letters will cover base pay and perhaps highlight a few of the benefits available. Can you imagine the impact your recruiting approach would have if you disclosed everything included in your total compensation package?
This would need to be done in a straightforward document that is easy to understand. A candidate considering a job offer doesn’t need to wade through a bunch of brochures, plan summaries, and retirement plan documents to figure this out. Instead, you should provide a sample “total compensation statement”.
Here’s What to Include and How:
Base pay can be listed as an actual figure for the year since that price is fixed. Incentive pay can be listed as a range showing the potential for earned income. The amount of time off earned in the first year and its associated dollar value should also be noted.
What about the medical, dental and vision benefits portion of the statement? This should cover the minimum and maximum of premiums your company would normally pay on an employee’s behalf (based on individual, spouse, and family coverage). It should also give a brief overview of the potential dollar value of the coverage offered. For instance, medical insurance might pay for half a million dollars in catastrophic coverage.
For 401(k) or other retirement plans, provide an example of the earning potential for a typical contribution schedule with employer matched funds. This might be 6% of the employee’s base pay matched dollar for dollar. Add in any profit sharing and the value of stock options in this section.
STD, LTD, and life insurance coverage may also be included. Again, you should not only list what your company pays for providing access to these benefits but the maximum payout available under each program. The average expenditure per worker for your EAP (if applicable) should also be listed.
Do you offer tuition reimbursement or other training opportunities for employee development? Include the cost of these programs as benefits provided at the company’s expense as well. Basically, anything your organization pays for out of pocket can be itemized.
Keep it Short and Sweet
You should keep this statement under 2 pages in length (1 page is best). This makes it easy for the job candidate to digest. The plan and policy details can be viewed and discussed at length during onboarding and enrollment.
Be sure to specify on this sample statement that it is not a contractual document. It is provided for educational/informational purposes and the actual values may vary depending on the employee’s participation choices and other considerations. Your benefits and pay structure may change in the future and this can also impact the specifics of your total compensation package.
