Does Your Compensation Plan Attract & Retain Top Talent? Answer These 5 Questions to Analyze Your Plan
When we ushered in the new decade, business was booming, the unemployment rate was low, and companies were competing for top talent. The “roaring twenties” were back!
That was pre-COVID-19. Now many businesses are not booming and the unemployment rate is high (though improving), however, companies are still competing for top talent and the twenties certainly are roaring!
There are many downsides to the pandemic but let us take a minute to think positive. Now is a great time step back, evaluate current business models, and strategize for the future. Since employees typically are a company’s biggest asset, and labor is one of the biggest expenses, total rewards should be considered.
Here are 5 important questions to answer about your company’s compensation plan:
1) Do you have a compensation philosophy?
If so, is it still applicable? The higher unemployment rate means that more top talent is available for hire – be ready to attract and retain top talent.
2) Do you have a salary structure? Is it up to date?
Once your compensation philosophy is confirmed look at the backbone of compensation – your salary structure. Will your current structure work in the new environment? Did it need updating before the pandemic? Operating with an outdated structure, or with no structure at all, can prevent good hires in the first place, and cause internal equity issues in the long run.
3) Do you have an annual incentive plan? Will it pay out this year?
Next think about short term incentives. Are your plans performance-based? What will they look like for 2020? Many employees have gone above and beyond during the pandemic. How will you reward them for their loyalty?
4) Are current benefits and perks still relevant?
Companies have been racing to stand out with exotic perks and benefits, but are they really what most employees want or need right now? With more employees working from home many office perks are now obsolete. In today’s uncertain environment, direct compensation can be the best and fastest way to reward hard work and respond to individual needs.
5) Do you have the right mix of total rewards?
If the answer to any of these questions is “no or I don’t know” then you need to look at your total rewards. Where do you start??! Whether your company is public or private, for profit or nonprofit, your “favorite” compensation expert can help put the pieces together and create a total rewards plan that is a win-win for employer and employee.
Reach out to me to discuss your current compensation philosophy and structure and any other HR challenges you may be experiencing. Our consultants can assist you with all of your HR needs- Experts@FahrenheitAdvisors.com.
About the Author
Merryman Putnam partners with clients to provide compensation expertise including total compensation measurement studies where her expertise ranges from creating a compensation philosophy to market review, analysis, and recommendations. She has worked with public, private, and nonprofit entities in a variety of industries.