Total Compensation Calculator: Measure & Improve Your Compensation Strategy
Having a competitive compensation strategy doesn’t mean throwing more money or incentives at candidates and employees. A complete approach to compensation includes proactively looking for the sweet spot where your company’s needs and an individual’s goals line up.
We built the Total Compensation Calculator to help HR pros and hiring managers like you accurately measure existing compensation packages, plan and execute a compensation strategy, and effectively explain the total value of an offer to job candidates and employees.
Why You Need a Total Compensation Calculator
The way we work has drastically changed since the start of the COVID-19 pandemic, and as a result, the way employees view compensation has changed, too. Yes, money matters, but some employees would be willing to take a salary cut if it meant gaining certain benefits. In fact, in a recent survey conducted by BambooHR, we uncovered some surprising insights about what really matters to workers.
What Would Employees Take a Pay Cut For?
- 41% — Health insurance benefits
- 38% — Paid time-off benefits
- 37% — Flexible work locations and/or hours
Looking at these numbers in the context of the current labor climate, it’s clear that HR teams must shift their approach to compensation packages if they want to offer what workers really want.
What do employees really feel about compensation, and what do they want from employers?
Don’t Overlook Hidden (but Valuable) Parts of Your Comp Package
A Total Compensation Calculator helps you shine a light on the hidden gems of your compensation package, like health and wellness, so you can more clearly show the true value of your offer.
It’s important to make your compensation communication as clear as possible because people have little patience for paperwork. In fact, according to a Unum poll, one-third of employees don’t understand their health benefits. The poll also found that the average employee spends 30 minutes or less reviewing benefits materials before open enrollment, and almost two-thirds (62%) of respondents said their employer does not act as a resource for healthcare-related questions.
In the Total Compensation Calculator, we included calculations for health insurance standards like vision, medical and dental, and HSA/FSA contributions. But we also included other health-promoting perks such as mental health and fitness reimbursements, professional development allowances, and tuition stipends.
Even if an individual doesn’t take full advantage of value-added benefits, knowing their employer cares about the many pillars of their wellbeing can go a long way in making a compensation package appear more attractive. And showing the monetary values of these often-overlooked wellness benefits help drive the message home. If you’re not showing employees and candidates exactly how much value is packed in their compensation package, you’re missing out on critical selling points that will make your offer stand out.
Make It Personal
According to a survey by SHRM, companies are coming up with more individualized ways to round out their total compensation approach. These personalized ideas include:
- Providing childcare for employees
- Incentivizing workers in high-turnover roles to stay with monthly bonuses and additional earned time off
- Encouraging flexibility in work hours and location
- Supplementing air conditioning expenses (especially in regions that experienced warmer-than-average temperatures this past year)
- Expanding parental leave policies
- Developing generous equity packages
Personalizing compensation can also help in your recruiting efforts. Creating programs to recruit and retrain employees who have a gap in their work history (such as stay-at-home parents, people with arrests or convictions, and retirees) helps you diversify your workforce and tap new sources of talent. These internship-like programs for adults, also referred to as returnships, are an excellent way to demonstrate your organization’s commitment to employee development while gaining valuable experience and skills in those you hire.
For example, in order to support its knowledge investment in workers nearing retirement, Schneider Electric offers options for workers to reduce hours instead of retiring immediately. These workers are available to train and coordinate with entry-level employees and still receive benefits while the company retains their valuable industry knowledge.
Ways to Use the Calculator
Salary negotiations are one of the trickiest parts of HR. You’ve got to balance your management team’s goals and expectations with candidate and employee demands. On top of that, your short-term decisions have to set you up to hit long-term goals around things like pay equity and your overall compensation strategy. The Total Compensation Calculator is perfect in these situations. Here are some ways you can use it in your own organization:
- Offers for new employees. Clearly display the total value of an offer to a candidate. Giving a potential hire a breakdown of all that’s included in their offer will help paint the whole picture of what they’re getting and how they’ll get compensated.
- Negotiations with existing employees. Get on the same page with employees when it’s time for their annual review or any time salary comes up. The calculator can help you gain alignment with employees so they feel that their needs are heard and they’re fairly compensated.
- Reviews with executive teams. Next time your company considers switching insurers or shaking up its benefits stack, use the comp calculator to get an easy, accurate comparison of your options. If there’s one thing executives value, it’s information that helps make decisions easier.
- Sharing perspective on hidden perks. In a shaky labor market, there may not be room in the budget to give everyone a raise. An individual may only look at their salary and forget all the other ways they’re being “paid.” The calculator will help you explain those hidden forms of compensation. For example, if your company covers 85 percent of its employees’ health insurance premiums, that’s something they don’t have to pay for out-of-pocket.
Download the Calculator
Get started with the Total Compensation Calculator
It’s fully customizable, so you can drop in your company logo, employee name, and add or remove sections as needed.