What’s In Your Farm Employee’s “Hidden Paycheck?”
Your farm employees are the backbone of your operation. You’ve worked hard to recruit them and can’t afford to lose them, but does their total compensation reflect how valued they are?
While it’s easy to get defensive about the amount of money your employees should be receiving, there are often various benefits provided that contribute to an employee’s “hidden paycheck.” Taking time to discuss an employee’s total compensation not only helps clear up any confusion, but can also increase engagement, retention, as well as improve the quality of your new hires, according to Jim Versweyveld, a Farm Management Outreach Specialist with the University of Wisconsin-Madison.
“A discussion with each employee while reviewing their total compensation statement can increase engagement and retention, as well as improve the quality of your new hires,” Versweyveld says. “Since employees have a natural tendency to focus simply on their net pay, a total compensation statement can help remind them of their ‘hidden paycheck’ – the value of their benefit package. These statements encourage employees to think beyond the dollars and cents of their hourly wage and consider your overall financial commitment to them as their employer.”
Sometimes it’s easy to overlook some of the benefits your employees receive. When you sit down to discuss an employee’s total compensation with them, be sure to include:
- Annualized wages, in total, including any overtime pay
- Vacation/Paid Time Off/sick days or other paid leave
- Bonuses
- Mandated Federal benefits like Workers Comp, Social Security, Medicare
- The value of insurance plan premiums paid by the farm (health, dental, vision, life)
- Estimated value of employee use of the farm computer, printer, internet
- The value of farm issued cell phones or other technology you provide
- Farm provided meals, drinks, snacks
- Transportation and/or personal use of farm vehicles
- Professional development, career training, safety supplies, and/or uniforms
- Any other employee perks unique to the farm: milk, beef, produce, holiday turkeys, social events, etc.
This strategy of discussing total compensation not only lets an employee know their benefits, but it can also be used as a recruiting and retention tool.
“A look at total compensation is a way to encourage potential new hires with more than simply the starting wage you’re able to offer,” Versweyveld says. “As a retention tool, these statements can help employees view pay a bit differently. Instead of thinking of their paycheck as salary plus a benefits package, an employee will hopefully start to think of their earnings and worth as salary plus the monetary value of the benefits package. That little shift in perspective, multiplied across your entire workforce, can make a big difference in overall morale and retention at your farm.”
