The US unemployment rate is at its lowest level since 1969 (source) and research indicates that employee retention, attraction, and recruiting/hiring remain top concerns for today’s employers. How can a compensation strategy play a role in overcoming these issues?
Compensation Factors to Consider:
Pay Equity – Not just gender pay gap issues, but employers face the dilemma of paying higher salaries to attract fresh talent in certain required skillsets like data analytics, AI, and high-end software developers while managing the pay disparity delta between existing employees and new hires. If not carefully monitored and measured, this can lead to unwanted turnover.
Transparency in earnings is also growing in importance, leading to a large increase in demand for additional reporting functionality and customized employee total reward statements.
Variable Pay – Additional use of bonuses for pay for performance to achieve desired business results as an alternative to large salary increases which adversely impact fixed costs.
Reward Frequency – There is a tendency to pay more often and reward for special events, targeted corporate project milestones, individual performance, and business unit outcomes versus traditional annual awards. Additionally, reward types are getting personalized to include things like vacation/travel vouchers, gift cards, spa treatments, dinners, gym memberships, etc.
Increased Percentage of Gig Workers/Freelancers, and independent Contractors – Creates an entirely new set of potential incentive types to consider as offering creative incentives can often help attract and retain these invaluable off payroll resources.
In summary, comprehensive compensation management programs are an integral part of attracting and retaining the right employees that will help your organization reach its corporate goals. Utilizing the right technology will help you implement these programs, manage and accurately track all types of variable incentive programs giving you a competitive advantage thus ensuring your continued success and differentiation.
At Decusoft, we commonly hear prospective clients complain about the inordinate amount of time it takes to plan, administer, and manage their unique compensation processes.
Come see how Compose will allow you to reduce time, cost, and errors while securely managing your compensation plans.