Do Employees Really Understand Their Cost to the Employer?

When an employer implements an effective total rewards strategy, employees respond with higher job satisfaction, they become more engaged, and ultimately more productive. This, in turn, means a higher return on your human investment.

Last week an article by Jose Pagliery appeared on CNNMoney that talked about the true cost of an employee.  Pagliery said, “.. it typically ends up being 18% to 26% more than a worker’s base salary.” This is very important information to consider when you are thinking about hiring employees. But how many employers think about sharing this information with their employees? What might happen if the employees understood not just their true cost, but their TOTAL REWARDS?


Pagliery talks about social security, Medicare, state unemployment, health care and retirement benefits. Total rewards go beyond the obvious compensation and benefits. In addition to compensation and benefits, total rewards includes things like work-life balance, performance, recognition, opportunities for advancement, personal growth, and location. WorldatWork defines total rewards as “All of the tools available to the employer that may be used to attract, motivate and retain employees.”


When an employer implements an effective total rewards strategy, employees respond with higher job satisfaction, they become more engaged, and ultimately more productive. This, in turn, means a higher return on your human investment.


Total rewards strategies can be designed to fit any company.  The key to a successful total rewards strategy is making sure that it aligns with the company’s mission and culture.  Finding creative ways to develop a total rewards strategy can help to keep costs down for employers and still make the reward desirable to the employee.  Sharing this information with employees, and potential employees, helps them to understand their entire rewards package and enables them to see just how much the company really does spend on their behalf. 


In a time when companies are demanding more results from less staff, what company wouldn’t want to increase their Human ROI?  


To read the full article from CNNMoney, go to .

WorldatWork  -


About the Author:

Darlene Fenn is a Southern California HR consultant with over 20 years of experience in HR and the prevention methods and strategies a business needs to minimize risk and maximize their human ROI.  You can find out more information on Darlene at




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