Establishing and Maintaining Competitive Compensation at Your Company
Your recruiter isn’t just a placement specialist, they’re also a compensation expert. By placing hundreds of candidates every year in similar companies, they have their fingers on the pulse of business. Your recruiter can tell you how much a position is worth and how much you’ll need to pay to attract the very best candidates.
Do I need to lead the way in compensation?
No. You may want to lead the way when filling a crucial position or if you’re opening a new plant/building, but your organization will want to offer competitive salaries and benefits to attract good people at every level. If you lag too far behind your competitors, your company will experience a “brain drain” and you’ll begin to pay more in training and replacing employees.
Is job description really that crucial?
Yes. If your job descriptions are accurate and current, it’s easier to determine what the market value of that position should be. Build a database of skills and education needed to do the work in that position. This helps your Human Resources know what to ask for, and helps your Recruiter find great-fit candidates to fill those open positions.
Research the ranges.
Your recruiter is a great resource in helping determine what range of salary each position or group of positions should be paid. They know what your competition is paying, what benefits are most attractive, and can even help you market your improved compensation packages to new candidates.
Do we have to adjust compensation for current employees?
Yes. One of the ways you keep valuable experience, education, and skills from leaving your organization is to perform periodic “market bumps”. A market bump is an increase in compensation that brings loyal, productive employees’ pay ranges within the current market value for their positions. It’s also worth checking that you aren’t overpaying some employees.
How do we handle a market bump that’s too steep for comfort?
Many organizations perform market corrections to compensation over several years. Be upfront with your associates, letting them know that you’re aware of their value to the company and that the plan is to offer staged increases to reduce the impact on the overall bottom line. Rather than creating discontent, this transparency of intent on the company’s part engenders a boost in morale and loyalty.
What about the overpaid employee?
You can offer an over-compensated employee a bonus rather than a raise at their annual review, you can encourage them to reach for a higher-level position where they’ll achieve a smaller-than-usual increase to keep their compensation commensurate with their market peers, or you can freeze their salary until the market catches up. The last choice is the least desirable, as it negatively impacts morale and performance.
Stay current!
Use your recruiters and your Human Resources department to stay abreast of job market changes in your industry. Communicate frequently about compensation levels. This way, your organization is less likely to be forced to make significant corrections.
Talk to Step Up Recruiting today to learn more about the compensation levels for your industry! Let us help you increase retention, morale, and productivity by ensuring competitive compensation for your employees.
