Employees continue to underestimate how much employers are spending on their health care, as well as other benefits, providing a serious hurdle to proper engagement. Data released this year from Aon Hewitt, the National Business Group on Health and The Futures Company indicate that total health care costs per employee were $10,522 last year, of which employers paid $8,318. When asked how much of their bill their employer pays, however, the average respondent guessed around half that amount.

"It is critical for employers to bridge the knowledge gap evident in this survey," says Helen Darling, president and CEO of the National Business Group on Health.

To that end, 89-year-old retailer Ace Hardware has implemented a program called Total Rewards with software firm Infor. A supplemental Web-based service to its standard benefits platforms, Total Rewards aims to offer Ace employees a comprehensive look at everything that is included in their compensation.

Jimmy Alexander, senior vice president of human resources and organizational development, says "the average tenure at Ace Hardware is beyond 15 years for the 800 employees at corporate," so turnover and engagement are not considerable problems, but the company wanted a way to show its workforce just how much it is valued.

"We wanted to make sure that everything that we provide to our employees becomes more visible to them and also visible in the sense that they can see everything from one location, and that's what led us to the concept of this Total Rewards station," Alexander says.

When employees sign in, they can see, among other visual aids and educational tools, a pie chart that breaks down everything that Ace offers them: their salary, yes, but also their health care, defined contribution plan match, incentive opportunities, even their vacation time - it's all made clear. And the program is completely customizable - for employee populations, for subgroups and for individuals with ever-shifting insurance costs.

"There were no major changes; there were no major enhancements," Alexander says, so the company didn't have to reinvent the wheel to get this going. "It was about our ability to get it in one place and also get it online where they can view it on a consistent basis."

 

Need for central site

Chris Liskiewitz, Ace's corporate compensation manager, says aggregating and compiling the data was a difficult task, and the exercise clearly demonstrated the need for a central information site.

"It was a little eye-opening to see how many different places you had to go to before to get all this information so it's no wonder employees lack a sense of how much their total rewards are, because there are so many different places where the information is housed," Liskiewitz says.

Liskiewitz says Ace has received "a lot of positive feedback" from HR administrators telling her "that the value of the statement has come up in conversations with the employees."

Jeff Zakosky is a district manager for Ace. "I guess I just didn't realize how much Ace was paying of my health care," he says. "And seeing the fine detail behind that, that to me is a big deal."

Alexander points out that Total Rewards may also have practical application for recruiting. "We may have possible candidates who may be looking to consider an opportunity with Ace Hardware, and we can actually profile out a job for them based on what the components of their compensation and benefits would be."

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