Employee turnover has always been a looming threat to business. Hiring new employees and retaining the ones the company already has, both share a vital point: employee satisfaction.
The two essential elements that factor into an employee’s decision to stay with an organization are whether the company values them, and how much they get paid. In some cases, these elements create a sense of loyalty to the business as well.
How does a company ensure that its staff feels valued and adequately compensated? Thirteen professionals from Forbes Human Resources Council explore some methods a business can undertake to ensure employees feel crucial to the company’s success.
1. Have An Honest Conversation
Employers should have an honest conversation during the recruitment process about the candidate’s compensation expectations and the company’s ability to pay. The company should offer compensation that is competitive based on the job market and their ability to pay. Candidates should be allowed to discuss what compensation works for them based on their expectations, skills and experience.
2. Stay On Top Of The Market
Invest in salary surveys and benchmarking, and review how roles stack up against market at least once or twice a year. While it may not be an exact science, this can help indicate whether you are paying more or less than other organizations for a similar role (and what your employees might see as their earning potential elsewhere). This also helps increase employees’ perceptions of fairness.
3. Utilize Salary Surveys And Research
Basing salaries on past salary history has traditionally led to income inequality and contributed to the gender pay gap. Now that many states and cities have banned the practice, employers can use salary surveys to ensure workers are paid fairly based on their job duties and qualifications. Furthermore, they can research salary ranges on sites such as Glassdoor and Salary.com to ensure fairness.
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4. Balance Expertise, Potential And Market Value
Experience and expertise are only part of the equation. Using multiple perspectives provides clarity for an employee’s market value. A clear, objective definition of potential helps managers avoid bias, underestimation and overestimation when considering compensation. Higher potential employees know their worth, so having a strategy to pay them starts with how they are identified and managed.
5. Ask And Individualize
Throughout the interview process, have clear conversations with candidates about their compensation needs and expectations. Ask them about which compensation elements are most important to them. Compensation is emotional and individual. Using a boilerplate approach will ensure that almost no one is satisfied. Think beyond traditional compensation elements to individualize rewards and make them meaningful.
6. Know What Matters To Them
Knowing what is important to individuals as they go through the candidate experience is key to ensuring your offer will be attractive now and throughout their employment. With experienced executives, their needs can be very different than emerging leaders or recent grads. Having options, such as long-term incentive plans or tuition reimbursement, can allow companies to attract the best talent.
7. Have A Clear Compensation Strategy
Compensation inequality is a real problem in today’s workforce. Using Glassdoor, LinkedIn Salary or PayScale to benchmark against market competitors is a wise move. A clear compensation strategy can eliminate arbitrary salary decisions, and ensure employees are fairly compensated and valued. Additionally, a quarterly review of compensation can make sure there aren’t major discrepancies.