Total Rewards Statements: How to Get Employees to See Every Dollar

CPA firms of all sizes are still grappling with how to keep up with the talent market’s demands of higher compensation and more benefits as the staffing shortage continues to place constraints on firms. Years ago, firms would only look at their local markets’ compensation data when benchmarking where their offerings stood in comparison to their competitors. Firms now look at every market, thanks to the popularity of remote workers. While providing total rewards statements to your employees won’t guarantee a solution to the staffing crisis, it may help position your firm to be more competitive from a compensation and benefits perspective.

What is a total rewards statement? A total rewards or total compensation statement is an all-inclusive overview of the annual pay package given to employees. It includes both direct and indirect compensation. Direct compensation includes base pay plus any incentive bonuses paid to employees through their regular paychecks; indirect compensation includes any other benefits beyond an employee’s recurring pay. Common examples of indirect benefits that don’t directly get deposited in an employee’s bank account include:

• Health insurance premiums (medical, dental, vision)
• Employee Assistance Plan (EAP) offerings
• Insurance premiums (short- or long-term disability, life)
• Employer 401k contributions
• Training and development costs (external CPE, CPA exam study materials, coaching)
• Paid time off or sick leave
• Employee appreciation expenses – holiday parties, summer parties, lunches, happy hours
• Spot bonuses
• Other stipends (phone, internet, wellness)

How can you get total rewards statements? Many payroll systems can generate easily downloadable total reward statements or reports. If your system doesn’t have this function, creating an Excel chart or graph is another option (shown below).

Some costs will be specific to the employee; for example, 401(k) contributions (if those are based on a percentage of an employee’s salary or a match based on the employee’s contributions), training and development costs, or paid time off. Other costs, such as company holiday party expenses, can be more evenly split amongst employees:

Company holiday party cost: $10,000

Number of employees: 40

Total cost per employee: $250

If you don’t have a payroll or HRIS system that can populate these reports easily, it will undoubtedly take time to create a report for each employee (ideally, an administrative professional would do this).

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Providing total rewards statements is a compelling strategy for demonstrating to your employees the comprehensive value your firm invests in them. By clearly outlining all the benefits beyond what hits a bank account, such as health insurance premiums, retirement contributions, paid time off and other perks, you provide a transparent view of their total compensation package. This transparency has its benefits; it fosters a deeper appreciation and loyalty among employees and positions your firm more competitively. Highlighting other benefits you provide that aren’t included in the statement, such as mentoring and internal training, are additional ways to drill home the message of your firm’s great culture that invests in its professionals.

While competitor firms may attract staff with higher salaries, your detailed total rewards statements highlight the often-overlooked benefits that make your firm a more attractive and rewarding place to work. This information may reduce the number of your team members jumping to an opportunity quickly, assuming the grass is greener (based on salary), only to find out that it’s not (based on the total package). Employee satisfaction and retention are paramount in the industry today, and total rewards statements are a tool for communicating the true worth of working with your company.