Total Rewards Statements Enhance Employee Understanding and Appreciation of Value of Benefit Programs, According to Aon Hewitt Research

Some Organizations Also Using Statements as Part of Recruiting Effort

TORONTO, Nov. 16, 2011 /CNW/ - A recent survey conducted by Aon Hewitt, the global human resources consulting and outsourcing solutions business of Aon Corporation (NYSE: AON), has determined that employers that use total rewards statements believe they are effective at helping to improve employees' awareness of the value of their benefits, as well as to retain and engage them.

Aon Hewitt surveyed 386 Canadian organizations earlier this year for its 2011 Canadian Talent Survey, which asked questions about a number of workplace topics, including the availability and effectiveness of total compensation or total rewards statements. These personalized statements summarize each employee's base compensation, as well as the value of health care benefits, retirement and other savings programs, vacation and any other rewards received, enabling employees to understand the full value of their compensation.

Thirty-two per cent of respondents provide annual total rewards statements to their employees. "Total rewards statements can be extremely useful in helping employees gain a complete understanding of their total compensation," said Diane McElroy, a senior vice-president with Aon Hewitt in Toronto. "However, the 'next generation' of statements goes beyond sharing information to driving action, enabling employees to make the best possible use of the programs available to them."

The following chart summarizes key feedback about total rewards statements from those employers that provide them:

  Effective /
Very Effective
Employees' understanding and appreciation of their benefits and organization's total investment improves 81%
Employee engagement increases 74%
Employee/executive retention is easier 72%
Participation in voluntary savings plans picks up 69%
Employees' savings activities and participation grow 66%

Technology is a major factor in the evolution of these statements and in creating a cost-effective and successful call-to-action, according to McElroy. "By providing online total rewards statements, employees can link to additional personalized information, such as past benefit usage or savings history. Employers can then use the statement to demonstrate the money lost by not contributing to a retirement savings plan with a company match or the projected difference in retirement income if the employee saves more. This may encourage employees to make additional voluntary contributions." McElroy provided another example with respect to healthcare benefits: "The total rewards statement can be used to indicate to employees when it may be more tax-effective to pay for certain medical expenses through a Health Care Savings Account."

Certain employers are also developing total rewards statements for a new audience. "Some organizations are providing these statements when they make offers to job candidates," said McElroy. "That way, if the potential new hire receives another offer - especially one with a higher base salary - he or she can make an informed comparison and determine whether a bigger pay cheque really does mean greater compensation. This can be a smart approach in a tight labour market."

About this Survey
Aon Hewitt's 2011 Canadian Talent Survey examines the talent practices, strategies and challenges employers face as Canada emerges from the recession.  Findings show that organizations are optimistic and cautiously beginning to change their focus from reducing costs to growth strategies.  For more information on total rewards statements, please contact Diane McElroy at diane.mcelroy@aonhewitt.com.

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About Aon Hewitt
Aon Hewitt is the global leader in human resource consulting and outsourcing solutions.  The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance.  Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human resources solutions and outsourcing. Through its more than 59,000 colleagues worldwide, Aon unites to deliver distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally in over 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary 2007-2010, best reinsurance intermediary 2006-2010, best captives manager 2009-2010, and best employee benefits consulting firm 2007-2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

 

 

SOURCE AON Hewitt

For further information:

Media Contact:  
Marcia McDougall, 416-227-5713, marcia.mcdougall@aonhewitt.com

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