Competitive Compensation Helps Employers Recruit, Retain EmployeesOctober 2, 2014 - By: Jason Carney
The American business model breeds competition. Companies need to offer competitive goods and services in order to stay in business and thrive. In order to produce a competitive product or service they need a competitive workforce, which can be achieved by providing the right benefits and wages.
However, it can be tough for employers to determine the right level of salary and benefits for employees. That is where a PEO like WorkSmart can help. Among its many other services, WorkSmart works with its clients to determine the best approach to competitive compensation.
WorkSmart starts this process by monitoring and analyzing market data to see what similar companies and competitors are paying their employees. This allows us to present our clients with a variety of salary and benefit options that best fit their needs. We begin this process by determining the demographics of the company and how its current salary and benefits structure relates to its specific industry.
Compensation research is often a three-pronged project. First, WorkSmart uses leading compensation surveys that are industry and geography-specific to help determine market salary ranges for individual positions. Compensation work as can be described as “art cloaked in science” due to the fact that every organization has unique positions that may be a hybrid of more than one survey result. Close consultation with the client is needed to help determine the right approach on position data.
Once the initial data is gathered, it is important to determine where the company would like to be in the marketplace as far as compensation is concerned. Most survey data returns salaries broken down into “percentiles”. Each organization has a unique approach based on whether they want to “lead” or “lag” the market. This decision can be based on a number of factors including industry competitiveness, economy, and other perks and benefits that are offered to employees.
Some organizations go to the final step which involves creating a specific merit increase structure and salary grades, or “bands.” This can be a very onerous process and is often reserved for larger organizations due to the rigidity of the process.
One technique WorkSmart uses to determine the best route for clients is to survey the company’s current employees in order to find out what is most important to them. This allows employees to rank pay and benefits by importance and define what aspects will create the happiest work force. Typical benefits include pay, health insurance, parking, flexibility, time off and more.
Employee surveys are often a great start; however, employers must always be prepared to present the results back to their employees. For example, if clients receive any negative feedback, they should never hold onto those opinions and data without making changes or offering an explanation.
Since WorkSmart is a full-service PEO, all salary and benefit changes can be facilitated in a quick and seamless fashion. Clients can stop worrying about whether they are paying employees enough or offering them the right benefits and can let the professionals at WorkSmart handle the rest.