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Total compensation package examples

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Employee compensation includes a lot more than just the base salary or hourly wage. Bonuses and commissions can give annual earnings a significant boost, and various benefits can also have a major impact on your employees’ finances and wellbeing. When discussing compensation, it’s important to look at the big picture. Here are some total compensation package examples.

Employee Compensation: What really matters?

Glassdoor conducted a survey of employees and job seekers to determine which factors mattered most to them. The top two factors were, unsurprisingly, salaries and benefits: 67 percent cited salaries and 63 percent cited benefits as top factors.

Salary may be the most important factor for many employees, but benefits come in at a very close second. The real takeaway is both salary and benefits matter.

Is your total compensation package competitive?

The Bureau of Labor Statistics has reported a surge in quit rates. The number of employees quitting appears to have peaked in September 2021, when more than 4.3 million workers resigned.

The surge in employee turnover has impacted many industries, and employers are struggling to hire and retain enough workers to keep companies running smoothly. The New York Times says that the labor shortage is giving workers the upper hand in negotiations. As a result, wages have increased. According to SHRM, employers are also offering new benefits and perks in an attempt to attract workers in the tight labor market.

These trends might have lasting effects on what employees expect in terms of salary and benefits. If you’re not offering a competitive compensation package, you might have an increasingly hard time hiring and retaining top talent.

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What goes into a total compensation package?

A total compensation package can include a number of different items, such as:

  • Base Salary or Annual Wages
  • Bonuses
  • Commissions
  • Retirement Plans
  • Health Insurance
  • Other Insurance (Dental Insurance, Vision Insurance, Life Insurance, Disability Insurance, Pet Insurance, etc.)
  • Paid Time Off (Vacation, Sick Days, Floating Holidays, Parental Leave, Personal Days, etc.)
  • College Tuition and Student Loan Repayment
  • Childcare Assistance
  • Employee Assistance Programs (EAPs)
  • Financial Wellness (Educational Tools, Credit Monitoring, etc.)
  • Career Development Programs (Training, Mentorships, etc.)
  • Various Perks (Gym Membership, Transportation Benefits, etc.)

Comparing Total Compensation Package Examples

Imagine that two different companies are hiring for a similar position. We’ll call them Company A and Company B. Company A is offering a base annual salary of $70,000, while Company B is offering a base annual salary of $80,000. Just based on that information, it seems like Company B should be the more attractive option for job seekers. However, once we compare the total compensation package, this may not be true.

In addition to the salary of $70,000, Company A offers a great health plan, as well as disability insurance, life insurance, dental insurance and vision insurance with no costs for the employee. Company A also offers a 401(k) with contribution matching. There’s an Employee Assistance Program with great legal and mental health resources, as well as a childcare credit, a college tuition assistance program and a student loan repayment plan. Company A supports long-term career development by paying for training and providing mentorships. Employees also receive unlimited paid time off.

So how does Company B stack up? In addition to the $80,000 salary, Company B offers a high-deductible health plan. Other group insurance policies are available, including disability, life, dental and vision, but the employee has to pay for 100 percent of the premium. There’s a 401(k) plan, but the employer does not match employee contributions. There’s no Employee Assistance Program, childcare benefits, career development program, college tuition assistance or student loan repayment plan. Employees get paid holidays and five paid personal days each year.

Company A is probably starting to look pretty good, isn’t it? Employee benefits can add up. They can also have a significant impact on how an employee’s short-term and long-term finances, their physical and mental health and their quality of life.

Do employees and job seekers see the big picture?

Some great benefits are underutilized. This isn’t necessarily because employees don’t have any need for the benefits. In many cases, the problem might be that employees simply don’t realize the benefits are there, or they don’t understand how to access them.

For example, let’s say you offer an Employee Assistance Program (EAP) that provides legal resources. You have an employee who’s currently dealing with an unfair eviction and doesn’t know what to do. As a result, this employee is stressed and distracted at work. She could get free legal assistance and referrals through the EAP, and this would be a tremendous help to her, but she doesn’t because she doesn’t know about the program.

Make the Value of Your Total Compensation Package Clear

Offering great benefits won’t help you attract or retain talent if employees and job seekers aren’t aware of the offerings. Communication is key.

When you are recruiting new talent, make sure the job candidates are looking at the total compensation package, not just the base salary. One way to do this is to create educational resources that clearly list all the benefits and perks available. You can go a step further by calculating the expected value of all of these benefits and adding up the total. This gives job seekers a concrete number instead of simply a vague idea of value.

Don’t forget about current employees. They may need to be reminded about the benefits available to them. This can be done during your company’s annual open enrollment period, but you don’t have to wait a full year to get the word out. Send out regular reminders and tips on how to make the most of the benefits available.

Do you need help managing employee benefits?

To be competitive in a tight labor market, you need a total compensation package that stands out. That requires selecting insurance plans, administering employee benefits and staying in compliance with various regulations.

Count on Higginbotham to provide customized solutions and streamlined employee benefit processes. Learn more about our employee benefits services.

Not sure where to start? Talk to someone who wants to listen.

A great plan starts with a conversation. Let’s talk about what you need.

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