Total Compensation Statement

Paul Jelinek
Director of Global HR, Benefits and Compensation
Ultimate Software


With the Labor Department reporting that employers posted the highest number of job openings in four years and the July jobs report showing more jobs were added than expected, it seems that the job market is finally beginning to recover. With a recovery, though, there will come a renewed competition for skilled and knowledge-based workers.

With that being said, I pose the following question:

As an employee with an annual salary of $50,000 would you switch to another company, doing the same exact work for just $60,000?

If you are like most people, you might jump at the opportunity. After all, a 20% raise in salary far exceeds the average 2.9% annual salary increase that US employers are expected to give in 2013. However, if you jump ship only taking into account annual salary and not total compensation you might be in for a rude awakening.

Let me take a moment to explain why. By definition, total compensation refers to the sum of cash, benefits and non-cash allowances provided to an employee. While the definition may seem simple, many employees fail to completely connect with its real meaning. For some people it is a lack of understanding, but for most it is simply a lack of visibility. Whatever the case, all employees should have a very clear understanding of their total compensation.

So going back to my question, what if I said that on top of your salary, your current employer provides a 10% bonus, matches 50% of 401k contributions, contributes $400 to your $500 monthly medical and dental premium and provides two personal days on top of your two weeks of annual vacation time. Compare that to the other company that gives a 5% bonus, will only match 25% of your 401k contributions $250 of your $500 monthly medical and dental premium and provides no additional personal days on top your two weeks of vacation time.

Still think the answer to my question is obvious? Given the visibility to all the components of your total compensation package, then you can easily see your current employer provides you with an annual total compensation of approximately $62,285 vs. the other employers $66,750. Still willing to jump to another company? Maybe. Maybe not.

How can you help an employee understand their total compensation? By providing Total Compensation Statements you can help reduce turnover and avoid the cost of replacing an employee, which Towers Watson estimates at 2 ½ times an employee’s annual salary. I am not a finance guy, but spending a few dollars a year to provide all employees with a Total Compensation Statement to avoid the costs of unnecessary turnover seems like a great return on investment.

A New Standard

Adam Rogers
Chief Technology Officer
Ultimate Software

I flew to Phoenix last week to tour our new datacenter. It is truly extraordinary, boasting multiple layers of redundant power, cooling, Internet connectivity, security, hardware and storage. In short, it is the latest standard for enterprise class Cloud and SaaS operations.

And it struck me, as we climbed to 38,000 feet in a Boeing 757 on the way back to Florida, that SaaS operations are much like commercial jets: hundreds of points of redundancy and safety, ever increasing performance and efficiency, but at the end of the day all of that fades away to form a transportation platform. There are people at GE, Rolls Royce and Pratt & Whitney who install each blade of a jet engine compressor by hand, and yet all that disappears beneath leather seats and complementary (hopefully) soda.

But innovation in commercial aviation is perpetual. This year, the 787 Dreamliner comes into service with new materials, 20 percent better fuel efficiency than conventional jets, and more passenger comfort. Inevitably, it will become the new standard. And passengers will simply come to expect the new levels of comfort and performance.

In the first half of this year, our operations team assembled an entirely new SaaS environment for our products. In fact they put it together blade-by-blade, redundant system by redundant system. The results: 300 percent increase in compute capacity and 50 percent faster processing, among many others. And the new efficiencies and performance improvements for our customers are huge – as much as 600 percent improvement in payroll processing for very large organizations. Inevitably, it will become the new standard.

It is hard to remember an era before jet aircraft could take us anywhere in the world, quickly and economically. Now the same is coming true – once again, in the Cloud.

What’s Your Level of Loyalty?

Lisa Sterling

Sr. Director of People Engagement
Ultimate Software

As a frequent flyer, I have become accustomed to the "perks" of being a loyal customer. Preferred security lines, early boarding, consistent upgrades, double miles for each trip, rollover miles each year, great customer service and attention, and the list goes on. It’s these fabulous benefits that keep me coming back whenever I have travel plans.

A few months ago I had a trip that required me to fly from my lovely Omaha airport to Las Vegas. Unfortunately my normal carrier does not provide the easiest or shortest way to get from point A to point B. So for this particular trip I conceded and booked my flight with another carrier.

I have to say it was a great experience. My flights were on time and I was entertained by flight attendants who truly were focused on creating a great customer experience. I received a very nice snack on-board and had my choice of seating. There was definitely something to be said for the treatment I received. If I didn’t already have a “relationship” with my preferred airline, it may have been enough to cause me to switch. While it was a great experience, my loyalty remains. Can you say the same thing about your employees?

Many of us take our employees' loyalty for granted. We just expect they will stay with us no matter what. Some organizations believe their employees should feel honored or even lucky to work for their organization. Well, as someone who spends her entire day thinking about our people and the experiences we create for them, I am here to tell you that you are going to lose your best and brightest with this mindset.

People are loyal to organizations for the same reasons I am loyal to my airline carrier. Loyalty comes from the recognition they receive, the feeling of inclusion they get, feeling cared for and valued and their belief in the organization. Belief in the organization? Yes indeed! If I didn’t believe my airline could get me to my destination on time and safely, all the pillows and perks in the world wouldn’t matter. Same is true for any business – people want to know they are on a journey that provides a safe opportunity. And they simply want to feel valued, included and connected. They aren't expecting huge commitments from you. They just want the basic elements we all want from our experiences. So I ask you, when was the last time you thought about your own loyalty to your organization? Or even better, when was the last time you thought about your employee's loyalty to your company, or your loyalty to them. It doesn't take a lot to make a person loyal. But it does take a lot to convince them to stay when they have decided to leave or even worse, to get them back if they have already left.

Like my experience with the airline, if your employees already have that loyalty to you, it won't matter if they hear about great experiences somewhere else. They will have already made their commitment to you.

Have you earned your employee's loyalty? If not, now is the time to start!