At the height of the pandemic, companies were more open to “throwing money” at candidates to get them in the door. As the economy has slowed and inflation has increased significantly, we have seen reluctance from companies to continue with this pattern – but the candidate market hasn’t caught up. Fair pay prioritization and wage competitiveness are two of the biggest initiatives in the compensation landscape today.
What can you do as an organization to make sure your wages are fair and competitive?
Leverage market data to establish competitive pay ranges
By using HR-conducted market data, you can better understand the appropriate market wage and determine how competitive you are in your industry. Compensation packages aren't just pay though. Health benefits, additional PTO, schedule flexibility, and money allotment for training and development, all create a more attractive offer. In fact, employees with access to a broader range of benefits are 73% more likely to stay with their current employer for longer (MetLife).
Internal analytics to ensure your pay is equitable
Conduct a formal compensation analysis to determine where you stand and identify the gaps. Then, you can create a system going forward for regular reviews and pay decisions so you can adapt quickly in this fast-moving market. By analyzing your current salary structure with survey data and internal analytics, pay remains equitable on a consistent basis. This is critical to remain fair in the workplace and ensure employees feel valued and recognized. Internally equitable organizations experience less turnover, higher workforce morale, increased employee loyalty and greater attraction for top talent - so you're not only attracting the best, but keeping them too.
Build a culture of pay transparency to foster a positive perception of compensation decisions in the organization
Where there is no communication, there are assumptions. Even just the perception of unfair pay is enough to sink an organization. We're not suggesting you release everyone's pay to the entire organization. But think about providing your managers with the department's pay ranges, market data, and job descriptions of each role they oversee. This way they can build transparency around pay for their employees by effectively articulating why their pay is fair. Fostering a direct line of communication for employees' current pay structure and identifying their pay growth, can immediately eliminate assumptions and increase trust.
These changes do not always come quickly, so what can you do in the meantime?
A manageable way to temporarily solve salary imbalances is to consider bringing in employees’ temp-to-perm. Temp-to-Perm offers have become increasingly popular as they allow employees and employers to “test the waters” before committing. These types of employees typically demand a higher pay rate, but companies can save money on employer-sponsored benefits. These benefits usually account for 30% of an employers costs in employee compensation (BLS), but can be eliminated for temp-to-perm positions. While helping you adjust your compensation structure, HTI can provide you with temp-to-perm contract management - including a competitive benefits package through HTI. Though shifting your hiring strategy can be a temporary fix for the problem, it is just that, temporary. Overtime, temp-to-perm employees will be seeking the commitment to permanent employment.
HTI utilizes multiple tools to assess your company, comparing several factors – including market, industry, and other benefits to create a feasible compensation structure that will make your company an employer of choice. Let HTI customize a plan to fit your needs.