If you read nothing else, read this . . .
• With pay rises under pressure, total reward statements are important as a retention and motivation tool.
• To be fully effective, online statements must be updated regularly and linked to an organisation’s wider communication strategy.
• Integrating statements into a reward portal will help to drive engagement.†
• Online total reward statements need to be presented in a way that is clearly explained, intuitive and employee-friendly.
Case study: Council staff can make their own statements
Kent County Council has provided interactive total reward statements since 2008, with staff being encouraged to take ownership of their personal statements.
A key way of creating engagement has been to place the statements, provided by Asperity Employee Benefits, within the council’s rewards portal, which gives staff access to discounts and promotions.
Colin Miller, reward manager at the council, says: “We have about 25,000 employees signed up to Kent Rewards and around £14 million worth of expenditure has gone through it. On the site there is a total reward viewer to go to. For us, it is about keeping it as simple as possible and trying to use communication channels that are already there.”
Through the site, council staff can effectively build their own TRS by inputting information around their pay, whether they are part-time or full-time, their holiday entitlement, and so on.
“It can show how their payslip is made up, what is taxable and non-taxable, where they are saving on tax, what salary they can sacrifice,” says Miller. “Then they can go off to other sites to find out more about, say, salary sacrifice and, if they want, make an application. It is much more flexible than a sheet of paper.”
But the challenge facing the council is how to ensure staff are aware of their benefits and wider package, says Miller. A further challenge is how to get them to understand its value.
“Things can be valuable to people even if they do not necessarily take them up, such as knowing what sort of sickness or medical benefit they might be entitled to,” Miller adds.
Encouraging staff to actively engage with online total reward statements can be challenging for employers, says Nic Paton
Getting employees to recognise the full value of benefits, such as shares, company car, health insurance, sick pay, pension and holiday entitlement, remains a headache for many employers.
In a climate where salary rises are often barely keeping pace with inflation, being able to communicate, and getting staff to engage with, the value of their total package can be a key retention, employer branding and motivational tool.
Total reward statements (TRS) have become a key mechanism to communicate the total remuneration and benefits picture, both in traditional paper-based styles and, increasingly, in an online format.
Paper statements can still be a powerful communication tool, says Matt Duffy, head of online benefits at Lorica Employee Benefits. “The amount of email traffic in the workplace today means it can actually be quite important to receive something in paper form, perhaps at home, which staff can then view at their leisure away from their desk.
But online statements are becoming much more common and can make information more accessible and up to date.”
But even though online TRS can, theoretically, be more flexible and interactive, getting under-pressure staff to buy into their TRS and engage with the information presented can be deceptively hard. Matt Norton, senior flexible benefits consultant at JLT Benefits Solutions, says: “Employers need to proactively communicate it right from the launch. If they just launch TRS with little context, it is not going to work. They need to show people what it includes and how they can value particular benefits.”
Communicate via reward portal
Jeff Fox, head of consulting at Benefex, adds: “The most effective online statements are those communicated via a reward portal accessible by staff at work and at home. It should be easy to access, ideally via single sign-on, and prominent to the employee when they access the corporate network. Typically, the portal features other reward tools, such as flexible and voluntary benefits. It should be the go-to site for reward information.”
Wherever online statements are located on an employer’s system, they must be employee-friendly, says Norton. “If it feels like a spreadsheet, it will probably not work. It has to come across in a friendly, intuitive way. It needs to be able to be broken down into chunks of information. Most employees will understand salary, but then employers can incorporate things such as car and location allowances, bonuses, and so on.
“Being able to see, say, the employer’s contribution to a pension as part of the total reward package can be a powerful message, even if the salary increase has not been that great. It can show that, ‘yes, actually I am still well remunerated’. Total reward statements are becoming a more important part of the total employer proposition.”
Linking TRS to the wider benefits package is important for employee engagement, says Harsha Modha, director of UK benefits programmes at GlaxoSmithKline, which has had online TRS for its 13,000 UK staff since 2009, provided by Thomsons Online Benefits. “We have a single sign-on portal where the first page that comes up is the TRS, where people can look at the value of their salary and all their benefits,” she says. “There are then various click-throughs where people can find out more information, view Q&As, and so on. The key is to tailor TRS to the type of organisation and what will suit its employees.”
It is also important not to make assumptions about what staff will find engaging. Jim Christopher, senior associate at Mercer, says: “Some employers can assume a particular benefit may only be of interest to a minority of staff. But to those employees, being able to see data on it can be valuable.
“It should not just sit there in isolation. It needs to be integrated into other reward tools, so an employer might have, say, one central HR, reward and benefits portal encompassing pension tools, a share plan site, flexible benefits, payslips, and so on.”
But employers should not just expect to put in a benefits scheme, align it to TRS and for staff to engage with it. Andrew Morris, director of employee benefits at NorthgateArinso Reward Solutions, says: “A communications strategy is essential and it needs to be kept personal and relevant. It is about driving activity through the site and getting staff to recognise what they are worth to their employer.”
Read more about ways to communication benefits to staff