Project Description

What is an EBS?

Employee Benefit Statement

One way to communicate about and inform your employees on the reward package, is by the use of an Employee Benefit Statement, in short EBS. An EBS shows a detailed overview of the rewards offered by the employer. This overview includes an combination of financial and non-financial labour conditions, which it uses in order to calculate/determine the total value of the rewards. Simply said: a tool to educate your employees on everything they need to know about the reward package.

Previous research indicated that offering a EBS increases an employee’s awareness or knowledge about the labour conditions that comprise the total reward package. By informing the talent about the different (sometimes less visible and under-appreciated) reward elements, the EBS helps the employee reach a better understanding of the composition and the value of the benefits. Due to the higher knowledge, having a EBS also enhances the employee’s appreciation for the total reward package. Moreover, the employee satisfaction regarding their reward package is higher when a higher number of components is used in the EBS.

Implementing an EBS

Organizations need to choose which reward elements they want to include in the EBS. Elements such as base salary are nearly always included as these are easy to express in financial value, however this is not the case for all labour conditions. For example training & development, an element that is often forgotten in the EBS. However, in the context of the need for employability and longer careers, employers could consider to include this non-monetary item. The same counts for other benefits that belong the ‘New Ways of Working’ domain – such as flexible and remote working. Highlighting these benefits can help with attracting and retaining talent.

There are also some practical matters that need to be taken into account when implementing an EBS. Things to consider are:

  • How to access in-house data and internal HR systems, whilst maintaining data security standards;
  • How to ensure reliability of the system and how to gather and cope with (sensitive) data of employees;
  • How to customize the EBS and the portal with custom branding, personalized messages and company updates.

Implementing the EBS

Organizations need to choose which reward elements they want to include in the EBS. Elements such as base salary are nearly always included as these are easy to express in financial value, however this is not the case for all labour conditions. For example training & development, an element that is often forgotten in the EBS. However, in the context of the need for employability and longer careers, employers could consider to include this non-monetary item. The same counts for other benefits that belong the ‘New Ways of Working’ domain – such as flexible and remote working. Highlighting these benefits can help with attracting and retaining talent.

There are also some practical matters that need to be taken into account when implementing an EBS. Things to consider are:

  • How to access in-house data and internal HR systems, whilst maintaining data security standards;
  • How to ensure reliability of the system and how to gather and cope with (sensitive) data of employees;
  • How to customize the EBS and the portal with custom branding, personalized messages and company updates.

Is it successful?

With all fancy and upcoming tools, it is important to measure the success rate and the results it yields. In Vlerick’s research, HR departments were asked if the implementation of the Employee Benefit Statement increased their employees understanding of the reward package and if so, to what degree. 35% indicated that the EBS significantly increased their employees knowledge and understanding, while 59% of the respondents believed their employees got a somewhat better understanding of the reward package. Only 6% of the respondents believed that the implementation of the EBS had no (positive) effect.

Are you curious to see how this looks once implemented in our interactive, online portal Inspire? Then take a look around in our digital demo environment. Or you can directly request a free demo in which one of our consultants walks you through all the in’s and out’s on reward management!

Source: Van Steerthem, A., Baeten, X., & Van Hove, M. (2021). Total Reward Statements: How to maximise the potential? Insights into the added value of Total Reward Statements in reward communication. Vlerick Business School.