Employee attrition is a big issue for employers worldwide, especially in high-growth sectors. Ensuring fair but competitive employee compensation is vital for attracting and retaining employees and keeping them motivated. Two main factors influence an employee’s decision to keep working for the organization. One is whether the company values them enough, and the other is whether they get adequate compensation. While both are tricky issues, implementing the following tactics can help to attract and retain the best talent:
Have an Open and Honest Conversation with Candidates
Recruiters must make it a point to have an open and honest conversation about the job role, key performance areas, long-term growth, and remuneration to find out if they match the candidate’s expectations. The company must offer competitive compensation based on qualifications, skills, experience, and responsibilities.
Know the State of the Market
Employers must periodically invest time and effort in salary benchmarking with surveys to find how their salaries measure up to what the market is paying for similar roles. According to Forbes, 21 states in the U.S. have already made it unlawful for organizations to ask for salary history. However, employers can still use the surveys to ensure fair compensation linked to job roles and qualifications. Additionally, organizations can keep tabs on salaries using online resources like Glassdoor, observes a senior staffing consultant at Corporate Resources, a leading Illinois recruitment agency.
Balance Skills, Potential, and Market Worth
Expertise and experience are critical but not the only things organizations should consider during the recruitment process. They also need to establish the market value of the employee. Recruiters can avoid overestimating or underestimating or biases when considering compensation if they have a clear and impartial understanding of employee potential. Since employees with higher potential know their worth, having a strategy to identify and manage their compensation is important.
Know What Matters to Applicants
Organizations that make an effort to know what is important to potential recruits can ensure that their offers will appeal to the candidate and encourage them to get on board. The needs and wants of candidates can differ widely depending on the stage of their career, and companies need to have custom compensation plans that meet these requirements to attract and retain employees with the desired talent.
Pay What Is Worth to the Organization
Going solely by salary surveys and market expectations is not wise for retaining people in the short-term or long-term. You must be clear about the value the employee adds to the business and decide the compensation plan appropriately. For example, if you already have a team of experienced people, you may pay less to a less experienced candidate joining them. However, you may consider hiring a more experienced person to lead a team of rookies, even if the compensation is higher.
While salary is an important aspect of hiring employees and should be market-aligned, recruiters should invariably share the total investment the organization is making in the employee, including non-cash incentives and other benefits. They should engage the candidate in a preview of the compensation to enable them to set their expectations. The organization can customize the compensation plan to maximize value to the recruit.