Compensation Strategies to Attract and Retain Top Talent
Salary can be a key factor for a candidate when conducting a job search and accepting an offer. With several different types of strategies to choose from when developing a compensation plan for your organization, you must first start by examining the organizational structure as a whole. Next, review and refine position descriptions. Well-defined position descriptions are one part of the equation in trying to determine the market value for a job. Once you have a clear understanding of the responsibilities, skills, and education requirements of a position, you can begin to address compensation. Employee salaries are based on these factors and the organization’s compensation philosophy. Here are some questions to consider before an organization develops a philosophy and compensation structure.
What is a fair wage from the employee’s perspective?
Are wages too high to reach organizational financial goals?
Do managers and employees know and understand the compensation philosophy?
Does the pay scale reflect the significance of the job titles within the organization?
Is the compensation plan enough to retain employees?
Are the Fair Labor Standards Act and other federal and state law requirements met?
Is the organization’s philosophy in line with fluctuations in the labor market and industry?
One type of compensation is Market Compensation, which is based on what the ‘going’ market rate is for that job. Defining the market is critical to this equation. With more and more organizations moving toward a remote workforce, the market may not always include a geographic element such as a city or state. The market may be based on available and eligible workers with the skills, experience, and education who are looking for a position within a specific industry. However, for many more organizations, the market includes the actual place(s) of business, such as an assembly line, retail store, or distribution center. A Market Plus philosophy is to pay more than the current market value for a position. An organization may use this philosophy to attract the best and brightest from the applicant pool by paying higher than average salaries. A company may also employ this strategy to retain its employees. A market minus philosophy is exactly the opposite, to pay less than the going market rate for a position. If a market minus philosophy is adopted, then an employer may balance the actual wage with other rewards, such as bonuses, profit-sharing, and other benefits to remain competitive in recruiting employees and retaining them. With any compensation strategy, human resources should always keep in mind that applicants conduct research before applying in order to know their worth. Being able to present a competitive offer will help your organization avoid rejections and can even help retain staff. There are a number of resources available to employers to help determine a job’s market value, such as: Payscale.com Salary.com GlassDoor.com Department of Labor Society for Human Resources Managers Human Resource professionals, now more than ever, need tools to improve and enhance their recruiting and hiring efforts. Employing a recruitment software solution, such as LightWork® Recruit and Onboarding, can increase your success in the marketplace. It is a powerful and flexible applicant tracking and recruiting software with quick and easy set-up and implementation. LightWork Recruit allows HR to post openings to job boards and social media and track applicants through the interview process. It works to improve your online reputation and streamline procedures. Once an applicant is selected for hire, LightWork’s module assists with the administration and compliance concerns of onboarding a new employee. It also covers tax credit processing. Attracting and hiring top-level talent has never been easier or more efficient than with LightWork Recruit and Onboarding. To learn more about the value of a centralized recruit system, click here.