Competitive compensation strategy: More than good pay needed to attract top talent
The ongoing Great Resignation is proof that an update to your compensation strategy may be in order. In fact, a study by Mercer found a majority of employers (70%) are re-evaluating their compensation and benefits because of challenges with attracting and retaining talent.
Your peers are realizing that current and potential employees are looking for more than a paycheck and medical benefits. Even flex-time and remote work are starting to become standard.
To acquire and keep the employees necessary to move the business forward, it’s going to take a “total rewards” package approach to compensation that keeps the whole picture in mind.
Ask yourself: What benefits or bonus incentives can you provide to stand out as a best-in-class employer?
Considering compensation strategy
Good pay is still important, and you’ll need to at least think about annual increases to employees’ compensation that are budget-feasible.
According to Mercer’s most recent U.S. Compensation Planning Pulse survey, actual average merit increases are 3.4%, and average total increases are around 3.8%.
When it comes to benefits enhancement, here’s what employees are looking for, according to Mercer:
- Flexibility to prioritize family responsibilities for a sensible work-life balance (For some people, this is even more valuable than a remote work option.)
- Enhanced mental health support (This can include access to mental health practitioners, company-provided education, or even various options for stress relief like recreation and massages.)
- Career guidance and skill development for personal development (with possible pay incentives based on the acquisition of skills)
- Realistic retirement planning that takes socioeconomic challenges into account
- Lower healthcare premiums
- A work culture that’s safe, accepting and supportive for all
Before huddling up with your HR and benefits team to decide what to do next with your compensation strategy, gather comprehensive data from a source you trust (or multiple sources) that shows how your employees’ pay and benefits currently stack up against market trends in both your region and industry.
Additional valuable data analysis can come from employee feedback, which you can get through digital focus groups or pulse surveys. HR should have some thoughts on what will provide the best insights.
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