It’s not only essential that employees are suitably valued and compensated for their work – it’s equally important that they know exactly how much the employer is rewarding them for their efforts. However, a comprehensive package goes far beyond basic remuneration, so the traditional payslip and statutory forms don’t always suffice.
The solution for an increasing number of employers is the total reward statement (TRS): a personalised summary of an employee’s complete compensation package, including their salary, pension, insurance and all the other benefits and perks they receive from their employer.
Jane Hulme, HR director at Unum UK, believes it’s vital to ensure that every individual in the workforce has a clear idea of the true value of their reward package.
“Communicating via the TRS is a simple and cost-effective way to do this, enabling employees to easily understand and break down all elements of their package,” she says.
Engagement and retention
As well as providing essential information for the recipient, TRSs hold strategic value for the employer in terms of employee engagement and retention, according to Katherine Moxham, spokesperson for Group Risk Development (Grid).
“TRSs can be a useful way for employers to demonstrate to their workforce that being employed is worth far more than just what’s in their payslip,” she explains. “This couldn’t be timelier when the effects of inflation and the cost-of-living crisis have eroded their spending power so much that it’s tempting for employees to jump ship for a higher basic salary.”
What’s more, a TRS offers employers the chance to emphasise how their employee value proposition aligns with the organisation’s overall strategic ambition, says Charles Cotton, senior reward adviser at the Chartered Institute of Personnel and Development.
He observes: “By highlighting the link between employee reward and the mission, vision, culture and performance of your workplace, such statements can create a sense of purpose and engagement and help employees appreciate what they need to do to bring about business success.”
A TRS can also serve the strategic purpose of highlighting all the aspects of the reward offering that are based on employee performance, either at an individual or team level. “By emphasising how their individual and collective endeavours are rewarded and recognised, such statements can encourage employee performance and commitment,” says Cotton.
So TRSs elevate employees’ understanding of their compensation and benefits package on the basis of both fact and principle. What’s more, they serve as a useful tool for increasing engagement – but how do you get employees to engage with their TRS in the first place?
Consideration must be given to accessibility, explains Cotton. For example, if statements are distributed via the intranet, not all staff may have access to work computers to review them – such as those on the shopfloor. “One way around this is to give such employees a written TRS, but then consideration needs to be given to how they are distributed. Another option is to develop mobile applications,” Cotton adds.
Some employers are really thinking outside the box when it comes to securing employees’ engagement with their TRS, according to Chris Andrew, strategy director for Caburn Hope – although the ‘box’ was fully embraced in one particular case.
“We previously helped a well-known breakfast cereal manufacturer to create a TRS which looked like a box of cereal, with the total reward data replacing the nutrition information,” Andrew explains. “It was a simple concept but it really stood out and encouraged employees to engage.”
Other organisations have utilised “various elements including animated videos, radio shows, podcasts, games and quizzes, to bring total reward to life in a meaningful and relevant way”, Andrew adds. However, many firms will simply list rewards or format them into a chart, which he says is a “huge missed opportunity” to encourage engagement with an organisation’s purpose, vision, values and strategic priorities.
“Reward is an intensely emotional subject, yet many still communicate it to employees like it is a maths challenge,” Andrew observes.
In other ways, though, simplicity can be the best policy. “Making sure the information is straightforward and easy to understand for everyone is really important for a TRS, otherwise it loses its impact,” says Nebel Crowhurst, chief people officer at Reward Gateway.
In a similar vein, Debra Clark, head of wellbeing at Towergate Health & Protection, points out that people take in information in different ways, so it can be helpful if a TRS displays results in picture format as well as numerically. “This can create impact, interest and therefore engagement,” she argues.
Personalisation is another important factor. Patrick Cunningham, HR head of operations at Moorepay, recommends tailoring the content and format of statements to reflect individual employee preferences and needs.
Organisations also need to commit to regular updates and reviews. “Keep the information in total reward statements accurate and relevant, reflecting any changes in compensation or benefits,” Cunningham advises.
However, despite their best efforts to ensure the TRS is fit for purpose and engaging, employers will inevitably encounter challenges. HR teams should be prepared to help employees understand and interpret the information contained within. “It’s easy to get confused, so offer resources, FAQs and contact points for employees to seek clarification and assistance,” suggests Cunningham.
Crowhurst also warns that the implementation of total reward statements could highlight gaps in the organisation’s overall benefits package. “This could need investment by the business to address,” she advises.
When it comes to the employees themselves, though, there’s evidence to suggest that the provision of total reward statements is highly appreciated.
In February 2021, Energy provider E.ON UK launched a new benefits platform – called MyBenefits+ – featuring Edenred’s TRSs, an online module giving employees a full breakdown of their benefits and reward package.
According to Helena Eyre, reward consultant at E.ON UK, the feature has had “rave reviews”, with employees commenting on how easy it is to access, navigate and understand.
“Providing transparency this way around the cost of different benefits funded by the company – like life insurance – not only shows the value of things that people may forget about but reminds them of what we invest in them,” Eyre explains.
She also reveals that minimal queries have come to the HR team as a result of the change. So it seems everyone really can see the benefit.