The last few years, many businesses were in survival mode as they adapted to the changes brought on by the COVID-pandemic and the new world it created. While a lot of those concerns have seemingly leveled out for many industries, a new concern – gaining and retaining talent – topped the charts in 2022. As we look ahead to 2023, hiring compensation strategies will remain a key issue as organizations grapple with talent. If you haven’t evaluated your strategies and practices related to all things “people” lately, now is the time.
Recruiting Talent
In the new era of talent shortages, companies are struggling to find new candidates to fill empty roles. The employers that are winning the talent war are investing more than ever into the development and cross-training of people they already have. Jobs are better defined now by responsibilities, experience and education. When your employees are empowered, your organization gains value in a more experienced workforce with talent that is already in place. Additionally, internships and apprentice programs are increasingly important as this becomes a pipeline in the development of people.
Flexibility
Not everything can be blamed on the pandemic, but it significantly shifted the work environment. A remote or hybrid work schedule, along with flex-time, can benefit your organization as well as your employees, and these offerings can serve as a retention tool. With inflation and fuel costs on the rise, cutting out the traditional commute may be appealing to some employees if their position allows. With the option of remote work, you may be able to reach more qualified candidates by opening the search to virtually anywhere. The trend for flexible work arrangements is only going to increase in 2023, with some candidates saying they won’t even consider looking at jobs without the possibility of remote or hybrid work environments.
Branding and Reputation
Just as your organizations’ brand – how you present yourself to customers and the marketplace – is important, your employer brand – how you present yourself to employees and potential candidates – is critical as well. Your employer brand shows workers your culture and gives them a taste of what their employee experience would look like. Employer branding and reputation matter. A reputable employer brand is tantamount to more qualified applicants. Most candidates will do a deep dive on the organization before applying, scouring everything from social media pages and profitability or growth reports, to philanthropic efforts. Diversity and a vibrant company culture are major factors for candidates. Strong employer brand reduces turnover and recruitment costs. Candidates are customers. Treated properly, they become brand ambassadors and engage in the success of a company.
Employee Feedback
Know what the employees want. More money is not necessarily the automatic answer. Fair and competitive wages are definitely a must for any organization, but profit sharing, performance-related bonuses, health care plans, and retirement plans are also considerations. Employee surveys are an important tool for gathering information. Anonymity is key to honest feedback.
Giving employees options is good for business. The possibility of allowing each employee to choose their own performance recognition with perks such as extra paid time off, performance bonuses, other gifts or services, extra flex time or remote work options sweeten the pot. Surveys allow the employees to feel free to make choices and it gives the employer flexibility to consider financial impact, company culture and employee morale.
Best Practices & Compensation Strategies
Trends are showing that more frequently, passive employees that are on the fence about actively searching for new employment are taking the plunge and getting serious about looking for new careers. Employees looking to join a company want to know how they will contribute to company growth.
Salary increases are expected to jump 3.5 to 4.1 percent, erring on the higher end of that percentage. These increases are inevitable, so be sure to budget for them (And of course, compensation disparity will be something to look at, too).
You should take a holistic approach to your compensation strategies, not just to attract qualified candidates but to retain current employees. The key will be to review the total compensation package that you offer − salary, bonus structure, benefits and flexibility.
Compensation strategies should also include preparations for succession planning and who will fill the vacancies for those that are retiring. Compensation studies and benefit brokers are also great ways to be the most prepared going into 2023. If you are hiring a benefits broker, they should study overall company strategy, budgets, benefit plan design, HR strategy and even IT concerns. Not all benefit advisors are the same, so research your selection carefully.
Across industries, businesses are embracing change. A ‘back to basics’ approach of really listening to what people want benefits current employees, new candidates and the company. With winning strategies in place, the maximum benefits work for all people.
If you’d like to discuss your hiring and compensation strategies, contact Rea’s HR Consulting team.
By Renee West, SHRM, SCP (Renee West HR Solutions)