Total Compensation Statements: Just What the Doctor Ordered

Thanks to its use of total compensation statements, Hoag Memorial Hospital Presbyterian in California is enjoying a healthy dose of cost savings and a speedier hiring process.

Hoag’s Southern California network includes two acute-care hospitals, seven health centers and five urgent care centers, treating more than 300,000 patients annually with a comprehensive blend of services. Hoag’s Newport Beach hospital has been part of the Orange County community for more than 60 years and is consistently named the best hospital by local surveys.

Yet like most health care employers, Hoag faces a constant challenge in attracting and hiring people who meet the provider’s specialized needs, and who are willing to live in expensive Orange County.

“Although Newport Beach is a lovely place to work and it’s sunny, 70-degree weather almost year-round, that can only carry you so far,” said Michael Krug, manager of talent acquisition at Hoag.

The hospital employs a workforce of more than 5,000 employees and contracts with about 1,700 physicians, as well as hundreds of additional contract staff. In fiscal year 2012, Krug and his team of recruiters hired more than 1,400 people, including seasonal and contract staff. He said their greatest challenge is negotiating with candidates for specialized manager and executive-level positions.

“Everything about our industry is evolving, especially the way we search for and attract highly specialized candidates,” Krug said. “When the specialized labor pool is low and demand is high, candidates have certain expectations from a compensation standpoint. The difficulty is getting them to look outside of the true dollar value of their base salary.”

In 2011 Hoag introduced print and Web-based total rewards statements for current employees. In summer 2012, it began to roll out personalized compensation statements for highly specialized candidates. The immediate cost and time savings became obvious: the first five candidates all accepted the initial job offers, saving the hospital an estimated $60,000 in counteroffers and potentially higher salaries.

“Based on the savings we’ve experienced so far, we’re easily looking at a six-figure savings for the fiscal year,” Krug said. “Further, you can’t put a dollar value on a good candidate experience. Our candidates’ eyes light up when they see the total comp statements, and they’re so impressed that we prepared this detailed information.”

Once the recruitment team gets a sense of a candidate’s desired compensation and the hiring manager’s budget, they plug the numbers into a total rewards software system — a process that takes only minutes.

“We have a consistency that wasn’t there before,” said Debbie Davis, Hoag’s director of compensation. “In less than five minutes, we can have a complete compensation package entirely mapped out.”

The software also offers tracking and analytics reporting: how many times candidates logged in, plus the time and length of their visit. This “digital body language” reveals valuable information as to what compensation and benefit programs are most valued.

“We’re able to paint a more dynamic picture of the value we bring to a candidate,” Krug said. “And not just from a monetary standpoint, but also by showing compensation, benefits, 401(k) contributions, potential incentives, relocation costs and more.” The team originally planned to limit statements to specialized roles, but they are now being used for a wide range of jobs.

Compensation statements also help Hoag stand apart from competing medical facilities. “Surprisingly, the candidates I’ve engaged with have never seen these before,” Krug said. “It’s refreshing to be in the driver’s seat and offer something that isn’t widely used yet.”

Ray O’Donnell is CEO and founder of TotalRewards Software. He can be reached at editor@talentmgt.com.