Compensation and Benefits Best Practices
In today’s world, every HR professional is looking at their compensation and benefits strategy. As companies fight for talent, a critical change in the strategy could ultimately seal the deal for high-performing talent courted by company recruiters.
Employees today are more likely to move to another company with better offerings. Not only that, but it’s easier than ever for employees to research this information. Workers are regularly sharing just about every piece of information they can online. That includes compensation and benefits information. With that data, employees can evaluate employers based on what they’ve found.
But the compensation and benefits strategy goes beyond the War for Talent. In fact, it’s something that has to be considered for every employee. Sometimes, it’s a one-size-fits-all approach and sometimes it’s more individualistic. Either way, it’s important human resources keeps a handle on the strategy.
Compensation and Benefits
- Understand the budget
HR needs to make sure they understand how the company budget is structured when it comes to compensation and benefits. Why is this important? HR needs to understand how the money is going to be spent. Keeping compensation and benefits balanced is critical to making sure HR can continue to adapt the strategy accordingly.
- Consistently review employee compensation
Most HR departments only look at the compensation of employees at the end of the year or during an employee review period. This helps determine salaries going forward. However, reviewing compensation practices at least quarterly allows HR to make adjustments as needed. Understand, that doesn’t mean the adjustments happen that often, but it does make it easier.
- Create salary ranges
This aligns with the previous practice. It also helps ensure the organization is competitive in the industry. These can be developed by benchmarking similar jobs or based on internal practices.
- Audits are a must
Additionally, HR should audit compensation on a regular basis. There are any number of changes that could impact salaries and the need to adjust those for employees.
- Pay high performing employees well
Higher performance should mean higher pay. This is an important piece of not only compensation and benefits, but also retention. Employees who don’t feel they are paid what they are worth will going looking for a company that aligns with this belief.
- Benefits as part of the strategy
In addition to retention, benefits also help attract new employees. The goal here is to be competitive and the preferred employer in the industry. Often times, benefits are a deciding factor for a potential new employee.
- Develop a plan
The plan developed is the compiling of all the previous practices into one strategy. Understanding how the HR department is going to apply these practices throughout the year will help ensure success at the end of each process.
A compensation and benefits strategy remains in a fluid state. It’s not meant to be rigid. A stiff and stale process can lead to immeasurable loss as the company tries to attract and retain the best workers for the organization. With a fluid approach, the compensation and benefits strategy can increase the organization’s competitiveness and help find the best talent available. Companies with a strong sense of the compensation and benefits strategy will be able hire the right people more often than not and will see great business success.
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