Employee turnover has always been a big concern for businesses. Hiring great employees and retaining them is vital for success in any organization, and they all hinge on one thing: employee satisfaction.
Employee satisfaction can come from a multitude of things: challenging and fulfilling workloads, a great company culture, meaningful interpersonal relationships at work and, of course, compensation. When these elements combine, they create a loyalty that is hard to shake. It all merges into a rock solid team that can move mountains together.
While many of these factors can be addressed and shifted over time, compensation seems to be one that is more cut and dry. It’s based on the company’s performance, therefore the level of the role and its value to the company should technically dictate the amount.
And as easy as that is to write, it’s not necessarily that simple.
Compensation is key to employees feeling valued. It’s critical that you not only get it right, but evolve it as the employee’s role evolves at your company. Here are a few ways you can check in on your salary levels and keep a pulse on the fairness of it all.
Keep communication line opens
Communication starts during the interview process. It’s important to have open and honest communication about the individual’s salary expectations and your company’s ability to fall in line with those expectations. This will help set the tone for the entire relationship as far as transparency in pay goes, so it’s vital to get it right the first time.
Asking about salary expectations shouldn’t just be a form field on your application. It should be an active, engaged conversation between the potential employee and employer as the interview progresses.
This is a time where you can discuss the different ways that compensation is given, such as salary, paid time off, bonuses, benefits, equity, retreats, stipends, equipment, etc. The person who is handling this conversation should not only be well versed in what your company offers, but they should be able to talk about how it has benefitted them personally so that the potential employee can understand how they’ll be affected by the compensation.
Stay on top of the market
A great way to keep on top of the salary game is to take the time to review different salary surveys and benchmarking semi-annually. Of course, every industry and geographic location is different, but this gives you a pulse across the nation as to how trends are running, and if your company is aligning with them or not.
Lindsay Putzer from Curology, an online dermatologist solution, says that they check benchmarking twice per year as an indicator of whether they are paying more or less as similar organizations for the same role. This helps her see if her valued employees might see earning potential be higher elsewhere, and solve the problem before it starts.
Take each individual into account, not just the role they’re in
Have you ever hired someone for a specific role in your company, and as your relationship grew with them, you realized exactly how valuable they were both in that role and outside it?
This is where compensation levels per role start to get fuzzy. A valuable employee shouldn’t be subjected to compensation that only relates to the exact role they were hired for when they do so much more for your organization.
Providing additional compensation levels in relation to the value the team member brings to the organization is key and will ultimately attract more high-value employees. It doesn’t have to be a “gut” thing, but can be “boosted levels” when additional contributions that are consistent are identified.
Clearly outline your compensation strategy
There is no doubt about it: even in 2020, fair compensation is still an issue throughout every industry’s workforce.
Benchmarking your salary against your industry helps, but so does benchmarking individual’s salaries across your company. Just because someone was hired into a role a long time ago when you weren’t looking at salary levels as closely doesn’t mean that they are being paid fairly now that your focus is on doing better in the future.
It may not be a pleasant financial experience to adequately adjust pay across the board, but it’s a necessary one. It’ll show how much you value equitable pay across the organization. Put your money where your mouth is, and where your values are.
React to employees’ needs
Money isn’t everything. While compensation is often based heavily on salary, there are other levers you can pull to adequately take care of your people.
Flexibility in hours, benefits such as a gym membership or a stipend for their home office, growth opportunities, education reimbursements and more can make it understood that you care about your team and want to help them succeed both inside and outside the office.
Make sure you’re aligned to begin with
Your organization has goals and values that aren’t up for negotiation. It’s important to first ensure that the candidates you hire align with those. This makes compensation decisions easier to work through from there.
Individuals who match the values of your company are worth figuring out the right compensation mix. Some may want steady compensation, while others may be excited about performance-based compensation. It’ll all create a harmonious mix of salaries that show the loyalty and trust you place in your team.