Is it really a sundae without the toppings?
Employers are looking beyond pay to compete in today's chaotic labor market
At long last, HR professionals have earned the once-coveted "seat at the table" — you're the leader your organization needs to succeed.
While compensation serves as the foundation of your strategy to attract and retain your company's key workers, it's no longer the primary element. Really, what you offer beyond pay is what helps you stand out from the crowd.
It's like a sundae — you've got to have the ice cream, but the toppings you choose to add are what makes it even better.
Every sundae starts with a good base
Today's limited labor supply is motivating employers to rethink their total rewards strategy, which is typically made up of a bunch of supporting strategies (such as a compensation strategy). That's where it all starts — the ice cream, if you will.
Your compensation strategy should take into account:
1. The value of base pay and incentives as part of the overall total rewards strategy
2. The financial impact of your compensation target (e.g., paying at median vs. paying at the 75th percentile)
3. The pay differentiation you need across your company based on types of roles and their impact on the overall success of the company.
Once you've determined the right compensation strategy, you'll need comprehensive data that's reliable and easy to use so you can better understand how your employees' current pay stacks up. It's the key to success for market pricing jobs and establishing your pay management structure.
You'll also want to start planning for annual increases. According to the most recent US Compensation Planning Pulse survey, 2022 annual increases were projected at 3.2% and total increases at around 3.5%. Similarly in Canada, annual increases were projected at 2.8% and total increases at 3.1%.
Other considerations at the pay and benefits level include:
• Continued differentiation in benefits offerings and inclusion of mental health and substance use disorder coverage.
• A shift toward rewarding individual performance and differentiating pay using short- and long-term incentives rather than base pay adjustments.
Time for the toppings
Whether you're a hot fudge, caramel, or strawberry type, those choices impact how you choose one ice cream shop over another — just like how your workforce will consider different employers.
As many employees reevaluated how their jobs were impacting their families and their mental health during the pandemic, employers quickly addressed the need for flexible work options. Continuing to offer flexibility in one or more dimensions is critical in today's ultra-competitive labor market.
Organizations are also considering how automation and artificial intelligence can replace much of the less rewarding or stimulating tasks in traditional jobs so that employees can perhaps be more engaged and fulfilled by contributing in more meaningful ways.
Given how much our lives are impacted by our work, empowering workers to improve their overall health and well-being with access to mental health counseling hotlines and gym memberships represent another major opportunity.
By offering a range of benefits that support work-life balance, family life, and overall health and well-being, you can make sure your organization remains competitive.
Put the cherry on top
When employees are proud of where they work and feel purposeful about their role, they're more likely to stay. That's the cherry on top of the sundae!
An August 2021 conjoint analysis from Mercer on the unmet needs of 2,000 US-based, full-time employees revealed "personal fulfillment and purpose" was a top priority — especially among salaried workers. It ranked just after priorities such as covering monthly expenses, health and safety, and being able to retire.
We all know, there are some jobs that are just difficult to position as 'fulfilling' to the majority of the employee population. That's where your ability to connect with employees around your mission, vision, and values is key. Your thoughtfully constructed mission, vision, and values should permeate all of your communication and every choice you make.
While not as easy as building the perfect sundae, you can set yourself apart from other employers by considering the total rewards package.
Looking for more information on how to sweeten the deal for your current and prospective employees? Contact us via email or by calling 855-286-5302.