Finding and keeping the best employees for your company is probably THE most challenging aspect of leadership. Well, that and Department of Labor audits, but that’s another story. Almost every company says that its people are its most important resources and many of them believe it, but when it comes to developing a compensation strategy, how do you translate this value into action? Believe it or not, there are quite a few companies out there who do not have a compensation strategy at all! If their company has grown slowly, wages are probably a direct reflection of the current employees’ previous salaries with perhaps an adjustment for how the company was functioning financially at the time ofhire. This works to an extent…until it doesn’t. Unless you have stumbled upon a wildly profitable service or product with no competition, at some point or other you WILL be challenged to create a winning compensation strategy. Here are some things to consider when building yours.
What does it take to be successful at your company?
As the leader, you HAVE to know this! What are the skills, abilities and knowledge required for each position in order to carry it out effectively? Is prior education important?
What is the training curve?
If you need someone to come in and hit the ground running, this usually means they have got to have prior experience doing something very similar. The more difficult the duty, and the less training you are able to provide, the more you are going to have to pay.
Can you offer career growth?
When I recruit talent, the best and brightest are almost always seeking growth. Contrary to some stereotypes, I do NOT find that all emerging professionals want to be managers immediately, but they DO want a career path. Workers today don’t blindly trust that they will get to stay at a company for their entire career and be taken care of, nor should they. They ask the hard questions about mentoring, training and development opportunities. And they are not unreasonable – most of them understand the value of this investment and don’t demand top dollar if the company is investing in them in other ways.
Is your culture ‘that’ great?
Most companies I recruit for describe themselves as great places to work with awesome people. That alone will probably not entice someone to take a job for less than they’re making now, or less they could get down the street. There ARE some workplace cultures that do just that. Typically this might be a far above-average dedication to a greater purpose, or perhaps unusual flexibility, time off or other perk not usually seen.
What about benefits?
The landscape here is changing faster than I can keep track of. As employers struggle to come to terms with the Affordable Care Act, many employees are accustomed to more and more expensive premiums with less and less service attached to them. Some companies have opted out completely. I’ve seen candidates not bat an eye at not having benefits and for others it is a deal-breaker. Assess your demographic and do what makes sense for your talent pool.
While it would certainly be easiest to just be able to pay at the top of the scale. When you can’t, you can still attract great people if you have LEGITIMATE training, growth or a unique or attractive culture. If you don’t, then it is absolutely imperative to have systems and processes that can withstand higher turnover or less talented workers.
So I strongly encourage you to review what you really need people to do, figure out what those people really want and develop a strategy to attract them and/or mitigate turn if you’re just not there yet. Being intentional about your compensation strategy WILL make recruiting far easier and will put you far ahead of your competition!