There’s a growing focus on compensation transparency as human resource teams struggle to find and keep great talent. By highlighting all the perks an organization offers, companies hope to attract the best people to take the company to the next level. But does compensation transparency really draw better quality workers?
I’d argue that before focusing on transparency, employers should be sure they have the best compensation program possible, because compensation matters now more than ever.
Let’s take a quick look at the ever-evolving world of work and the two BIGGEST reasons why total compensation matters:
The war for talent is heating up in 2015. It’s a candidate-driven market. According to the 2015 Regional Hiring Outlook, a special report released by the Execu|Search Group, 63 percent of clients surveyed indicated their “biggest challenge for this year will be finding qualified candidates.” The war for talent is being waged in every human resource and recruitment department around the nation.
Employees are looking for something more. More job opportunities means candidates can be more choosy when evaluating job offers. It’s not uncommon for high-quality candidates to receive two or more job offers at once. And how do these high-quality workers decide which company’s offer to accept when it’s all on the table? You guessed right—the company with the best total rewards.
Once in the job, employees will need regular reminders of that great compensation, too, because smart recruiters go after passive candidates to try and lure them away from employers who’ve essentially “fallen asleep at the wheel” in terms of total compensation communications.
Employers need the best compensation to remain competitive
We’ve already talked about talent shortages and the growing competition for top- level employees, but what about companies that are already doing a good job of providing compensation to their staffers? Once securing the best candidates, how can they retain these skilled professionals? The answer is having a strong total compensation strategy.
Here are three ways companies can use total compensation to retain their best workers:
- Provide flexible compensation and benefits. There is no “one-size-fits-all” in total compensation. While it’s easy to offer just the basics of health and financial wellness benefits, no two employees will value all offerings the same. Employees come from different places of interest and needs. Therefore, total compensation should be varied and flexible enough to provide the elements that appeal to most.
- Communicate total rewards often. A total rewards program is only as good as your organization’s ability to communicate it to employees. Make it a regular practice to provide a written total compensation report to employees. Communicate new benefit offerings both digitally (via email and your company intranet, for example) and in hard copy. Share total rewards statements before performance reviews, during interviews, and any time the subject comes up in staff meetings.
- Regularly evaluate the mix. An employer’s work isn’t over once a strong compensation program is in place. Business changes, and so should your benefits. Regularly evaluate your offerings and add value as appropriate in the way of new benefits, perks, and bonuses. For example, if you don’t offer educational benefits, think about whether you should (especially if your competitors are). New benefits keep employees interested in what your company has to offer and gives them another reason to stick around.
When you start viewing total compensation in these terms, you’ll soon start to see why it’s so important in the grand scheme of your business.