Total Compensation Statements?


Are Total Compensation Statements (TCS) a part of your regular communications with your employees? Are they even on your radar?

The Society for Human Resource Management (SHRM) suggests that one of the best ways an employer can show their employees the total value of their benefits and compensation is by providing an annual report identifying all of their direct and indirect compensation.

Direct compensation includes all base pay and/or incentive pay that is paid directly to an employee. Indirect compensation is value provided to the employee indirectly, such as through employer-paid portions of health, dental, vision and life insurance, retirement benefits, educational benefits, training and development, wellness programs, employee assistance plans, relocation assistance, etc.

Why should you consider calculating and providing total comp statements?

  1. Education. People don’t value what they don’t know. Everyone knows their hourly rate or their salary, but they don’t know the value of all of the benefits you provide unless you educate them. Their paystub, if they look at it, shows what’s left after taxes and deductions, but it doesn’t show what you invest in them, or the true cost of having them on board.
  2. Motivate/Engage/Retain. Employers who are open and transparent about their money, tend to have employees who appreciate that openness. Employers who share some of their employee-related costs and financial burdens, tend to see a greater return on investment through employees who are more highly motivated and more inclined to stay put.
  3. Reinforces The Employee’s Value. When employees see the full accounting of their employer’s investment, they feel more valued and more appreciated.
  4. Reinforces the Employer’s Reputation. If you lead the market in compensation, the Total Comp Statement (TCS) will reflect that. If you are competitive, the TCS will reflect that. If you pay less than the competition, the TCS will also reflect that. In each case it reinforces what you are doing, and reinforces your reputation, whether that reputation is strong or weak. But, if your reputation is weak, the TCS’s just may prompt you to find ways to enhance and improve your compensation reputation.

What should you include in your total comp statements?

  • Base pay – salary or hourly wages, including overtime
  • Variable and/or incentive pay – bonuses, commissions, stock options, other performance-based pay
  • Insurance Related Benefits – including employer and employee costs spent for health, dental, vision, and life insurance, supplemental and/or disability insurance
  • Retirement Benefits – including employer contributions and employee deductions
  • Statutory Benefits – i.e. Medicare, FICA
  • Work-Life Balance Programs – i.e. flexible spending accounts, employee assistance, wellness costs, etc.
  • Paid Time Off – vacation and/or sick days, holiday pay, bereavement leave, personal time, etc.
  • Training and Development – training courses and classes, certifications or degrees
  • Additional Allowances – i.e. training, travel, technology, etc.

If you have not been providing Total Compensation Statements to your people, consider it. You may already have a payroll or HRIS system that can provide them for you. If not, ask your HR or accounting people to look into it. It’s an additional benefit worth providing!

Alternative HR, LLC ( provides outsourced HR and fractional HR services, including compensation and benefits analysis and support. If you need assistance putting together Total Compensation Statements, or if you need help finding market wages, analyzing compensation, developing wage ranges or creating compensation plans and strategies, contact, or call 888.335.8198.