According to a survey by the Centre for Excellence in Strategic Rewards of Vlerick Business School, only 30% of employers offer a Total Reward Statement (TRS). According to these employers, a Total Reward Statement stimulates awareness of the reward package, increases appreciation, shifts the focus from financial reward to other non-financial reward elements, and has a positive impact on recruitment and retention (1). Earlier this year, Vlerick Business School published an interesting white paper on the Total Reward Statement (1). Everyone agrees on the many advantages of a TRS. It is a simple and essential step towards better communication of the reward package.
A complete overview of the total reward package
Due to the high fiscal pressure, Belgian employers have always been very creative in granting benefits. Belgian employees are often entitled to a very comprehensive remuneration package, but it is also clear that they are not always aware of exactly what this package looks like. Only a few benefits are included on the payslip and presented in a complex way. Some employers offer a brief overview on an intranet, but this is usually incomplete. After all, the full remuneration goes beyond the net salary, the group insurance, and the car. It can also include the annual staff party or a training course. With a Total Reward Statement, you offer a complete overview of all benefits.
Putting unknown benefits in the spotlight or focusing on a particular strategy
Through the TRS, employees can see unknown benefits. This is necessary, because some benefits, for example, may never have been properly communicated or certain elements not always seen as part of the remuneration package. For example, the possibility of having a quality meal at the office or a good coffee can also be part of the reward package.
The appreciation of the total reward package increases
Studies show that a TRS increases the appreciation of the total reward package. Employees get an overview of the total reward package in one place. They can determine how extensive their reward package is and get a clear view of the (often high) value of certain benefits.
Valuing a benefit
It is sometimes difficult for employees to assess the value of a particular benefit. The TRS makes it easier to put a value on a benefit. For example, in the case of hospitalization insurance, an employee only realises the value when they have to purchase hospitalization insurance. An employee also does not always understand the contributions that the employer makes to the group insurance scheme. Other benefits, such as a fuel card, can also have a very high value.
A clear valuation allows employees to compare the value of benefits with cash. When comparing salary packages between employers, an employee will usually focus only on cash and not on all the benefits that have been granted, precisely because they are difficult to value.
Explaining a benefit in a concise manner
Many parts of the salary package are sometimes difficult to explain. Employees sometimes do not know what they are entitled to. Through the TRS, an employer can give a concise and clear explanation of each benefit and, if necessary, add extra documentation per benefit. The sometimes-complex lump sum cost allowances can also be clearly explained via a Total Reward Statement.
The KPMG Total Reward Statement
More and more KPMG clients see the TRS as an ideal supplement to the cafeteria plan. The TRS functionality is fully built into KPMG's Flex Reward Tool but can also be accessed separately. The biggest advantage is flexibility. Benefits can easily be added with a concise explanation in 3 languages. Benefits and amounts can be set at individual level, but also at group level. A TRS is really a quick win for the entire organization. It is easy to set up and requires only 1 or 2 updates per year.
(1) Van Steerthem, A., Baeten, X., & Van Hove, M. (2021). Total Reward Statements: How to maximise the potential? Insights into the added value of Total Reward Statements in reward communication. Vlerick Business School. http://hdl.handle.net/20.500.12127/6657