How Competitive is Your Compensation Program?
Chances are, your employees are not dancing in the streets because of their 3% salary bumps this year. That's been the average increase for most salaried employees for the past few years after several flat or declining years during the recession. On the other hand, top employees who decide who decide to change jobs can expect a base salary increase of 10-15% from their new employer. In addition, they probably will ask for and receive additional vacation time. So, how do you keep your team motivated and reduce the likelihood they look for new opportunities externally? Here are a few suggestions:
- Maximize bonus opportunities. By most estimates, more than 60% of employees at the manager level and above participate in some form of variable compensation plan. The average variable compensation as a percentage of salary was 13% in 2015 and is trending upward. For executives and officers, it was 38%. If you don't have this kind of upside earning potential for your key players, maybe it's time to upgrade your bonus plan.
- Revisit your benefits package. Employees are becoming more focused on other elements of their compensation package such as vacation, 401(k) match, health care premiums, and tuition reimbursement. Are there meaningful ways to improve your plan that will generate enthusiasm and loyalty?
- Consider flexible work arrangements. More companies are enabling employees to work virtually on Fridays or based on specific needs and job responsibilities. If this can work in your business, it can lead to greater job satisfaction and become a competitive advantage.
- Pay more! When is the last time you benchmarked your salaries? Maybe it's time to compare your compensation to industry norms in the region. There are surveys available, as well as compensation consultants who can help. (We can point you in the right direction.)
Compensation is only one factor that helps you retain your top talent, along with personal growth opportunities, company culture, and the ability to have an impact on the business. However, salary is probably near the top of the list, so you want to make sure you are truly competitive. Barry Elkus joined Gilman Partners in 2007 and became a Partner in 2012. He leads the firm's Marketing and Sales practice as well as managing senior level searches for corporate and non-profit clients. Barry has built an impressive network of marketing and sales leaders throughout the region as a result of completing over 100 searches for senior level marketing and sales professionals. He also leverages his connections in the community to manage the firm's extensive non-profit practice, helping Boards and search committees evaluate and select new leaders. Prior to joining Gilman Partners, Barry served as a marketing and business leader in several industries including healthcare, retail and franchise development. As a former executive in two family-owned businesses, Barry has a unique perspective on the challenges of recruiting for family and privately held businesses.
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