A total compensation refers to the complete package offered to employees, which is made up of total remuneration plus any other non-financial benefits or incentives offered to employees. Total compensation is a combination of the following:

• Holiday pay
• Health insurance
•  Dental care
•  Tuition reimbursement plans
• Learning and development offerings
• Career advancement opportunities
• Retirement benefits
• Employee assistance program

Why total compensation is important

Total compensation, and having an effective compensation management program, is important to winning and retaining talent within the employer’s chosen industry. Employees are looking for, and expect to find, compensation packages that are comprehensive and meaningful to them.

If your organization does not  offer a good benefits package, candidates may turn down your job offer and rather go for an organization that is extending the benefits they want. Existing employees may leave for another job offering better benefits than what you offer.

Total compensation is discussed earlier in the recruiting process than it used to be. Candidates  prefer to hear about compensation and benefits during the interview process. One of the main reasons for this is the uniqueness of applicants' needs. For example, student loan assistance, work flexibility, and career advancement are sought-after benefits, and if you're willing to offer these perks to new hires, discussing these perks, along with the job duties, can ensure that you capture – and retain – candidates' interest and enthusiasm throughout the recruiting and onboarding process.