Why give employees a year- end earnings statement?

 This article is by Jerry Dresel of EES.  He makes a good case for something I have done with employers inthe past – handing out tru annual earnings statements.  Employees typically niether understand nor appreciate the full cost of employing them;  this is a way to educate them.

 One of the most difficult decisions employers have to make is determining how to handle employee benefits.  If employees receive too few benefits, they are likely to grow dissatisfied and start searching for a new job that pays them an income closer to the industry average. If employers emphasize benefits too much, however, they are spending money that might be put to better use somewhere else in the company.

Many employers decide employee paid benefits by taking a poll of similar sized companies or relying on Human Resource’s help to compare industry trends. Another way is to review published reports such as the U.S. Bureau of Labor Statistics. This report reviews the average salaries and benefits paid to both private and government employees. A recent report from the U.S. Bureau of Labor Statistics showed that benefits make up over 32 % of the average employee’s paycheck.  Many times the employee is unaware of these hidden benefits and does not fully recognize the true value or cost that the employer is paying – thus the need to communicate this information via an “Employee Earnings Statement”.

In today’s difficult economic environment, employers are not always able to provide annual pay rate increases, however the employer is often paying more for other benefits over and above what the employee typically recognize. For example, the ever increasing cost of medical coverage is costing more each year to the employer. Not all of those costs are passed along to the employee. Employees often participate in shared cost of medical coverage, although the majority of the medical cost increase is absorbed by the employer.

EES24 is a national company who specializes in producing “Employee Earning Statements” that not only include insurance benefits such as medical, life and disability, the earnings statement will define each category of benefits including, vacation, holidays, sick time, personal time, retirement and savings programs such as 401k matching, pension plans, social security, medicare taxes, unemployment and workers compensation and supplemental pay including overtime and bonus payments.

When employees view this earnings statement, they will recognize the actual cost of employer paid benefits. Examples will include a comparison of current hourly rate of earnings and adjusted hourly rate of earnings. An employee making $50,000 a year on his W-2 earnings is really making $66,000 when considering all benefits paid.  The hourly rate of $24/ hr is really $31.73 an hour with all benefits. Employees will be surprised to learn that they were receiving another $16,000 in benefits.

By communicating the true cost of all compensation, you are educating your work force and letting them know you value them. Increase your staff’s loyalty by showing how much they are receiving in benefits through with an “Employee Earnings Statement” from EES24.    

                                 “Show the true cost of employer paid benefits”

            “It’s truly a benefit when your employees know and understand it”

              EES24   PO Box 1222 East Northport, NY 11754 www.EES24.com    1-888-660-4401