What is an TRS?

Total Reward Statement

One way to communicate about and inform your employees on the reward package, is by the use of an Total Reward Statement, in short TRS (previously known as an Employee Benefit Statement or EBS). An TRS 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 TRS 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 TRS helps the employee reach a better understanding of the composition and the value of the benefits. Due to the higher knowledge, having a TRS 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 TRS.

Implementing an TRS

Organizations need to choose which reward elements they want to include in the TRS. 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 TRS. 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 TRS. 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 TRS and the portal with custom branding, personalized messages and company updates.

Implementing the TRS

Organizations need to choose which reward elements they want to include in the TRS. 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 TRS. 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 TRS. 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 TRS 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 Total Reward Statement increased their employees understanding of the reward package and if so, to what degree. 35% indicated that the TRS 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 TRS 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.