In today’s competitive job market, candidates are well educated about salary rates based on their industry and location. For companies to stay competitive and attract the best and brightest talent, they need to stay a step ahead of their competition. Developing a solid, yet competitive pay practice that is based on accurate salary data is crucial.
Here are some tips to help your organization develop a competitive compensation strategy that attracts and retains employees.
- Market Pulse – Wages declined in 2009 and 2010; however, many industries are seeing a steady increase in salaries. If your company has a compensation plan that is based on these declining years, it’s time to put together a new strategy or you risk, losing top employees to competitors.
- Benchmark Positions – Engage in once-per-year salary benchmarking to identify employees that are at a higher risk of turnover. This will help employers find ways to reallocate their labor budget and make smart decisions before facing employee vacancies.
- Compensation Plan – Developing a compensation plan is a cost-effective way to help companies structure their pay decisions in a way that aligns with company goals. While some companies skip this plan in favor of less structure and fewer rules, it can be their demise as top employees will eventually leave for better offers that come their way.
- Pay Inequities – A formalized compensation plan helps companies identify internal pay inequities. A significant wage gap for employees that do the same position can increase company turnover, even contribute to overpayment and costly litigation expenses. Race and gender have no business influencing compensation.
- Communicate – If you’ve gone through the process to create a detailed compensation plan, let your employees know. Compensation strategies exist to support your business goals. Communicate to employees and let them know that your company is investing in them and their talent. Employees appreciate feeling needed, and companies will see a measurable boost in employee morale.
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