Do you want to grow your company? That’s a common goal for business owners. There are two main ways to grow your company: you can focus on your customers, or you focus on your employees. Today’s innovative companies are directing their focus to their employees. When employees are well-compensated and happy with their jobs, they’ll look after your customers, and your company will grow.
Compensation management is the key to making sure your employees are well-compensated. Simply, compensation management means that you strategically structure your compensation package to get the most value out of your money. Here are some ways compensation management helps power your company’s growth.
Attract Good Employees
One of the major benefits of well-managed compensation is that it helps your company attract good employees. When highly skilled employees look for jobs, they often get to choose between multiple offers. The right compensation package can be the deciding factor. To make sure good employees choose you, not your competitors, you need to carefully plan your compensation package.
Salary is very important, so make sure you’re offering a salary that’s competitive in your local market. Of course, top employees don’t just look at salary; they also look at the company’s total compensation. When you plan your company’s compensation, think about the types of benefits that attract employees. That will give your hiring strategy a much-desired competitive edge.
Paid health insurance is a major benefit for employees, so your group benefits plan can be a selling point for prospective employees. Some benefits that are valuable to employees don’t cost your company much money, so they’re a win-win. Some of the low-cost perks that attract top talent include being able to work from home or having a flexible schedule.
Once you’ve hired good employees that will exceed your expectations and help your company grow, you need to keep them. If your good employees quit, you’ll have to start the hiring process all over again. As you know, hiring is a time-consuming and expensive process. In fact, high turnover costs way more than you think. According to one study, the six to nine months it takes to replace and train an employee replacement can cost anywhere from 50 to 75 percent of that employee’s salary! No wonder you don’t want to find new employees more often than necessary.
The right compensation package can help you hang on to your employees. Survey your employees to find out what benefits are the most important to them, and if those benefits aren’t too expensive for you, offer them. Small benefits like flexible hours or extra vacation days can mean a lot to your employees and make them less likely to leave your company for employment elsewhere.
To get the full value of your benefits spending, you must ensure your employees are aware of their benefits. A whopping 62 percent of employees say they’re not fully aware of the health and wellness benefits their employer offers, and these employees may leave for companies that make their benefits clear. While you may think it’s your employees’ responsibility to research their benefits, communicating benefits is in your company’s best interest since it helps you keep your staff.
Worker benefits also play into the employer’s brand. It’s important for companies to market their brand—when they do, staff realize the full extent of their value within the company as well as the lengths to which the company cares.
There are many ways to improve your employees’ performance, but their compensation plays a key role. When employees are happy with their compensation, they feel valued at workand they’re more motivated to work hard. Motivated, empowered employees get more done during their work days, and they’re more inclined to go above and beyond.
Performance-based benefits are a great way to improve your employees’ performance. These benefits need to be incentives that motivate your employees to work harder. For some employees, cash bonuses will be a major motivator, while for others, an extra day off may be the perfect incentive to meet their goals.
If you offer performance-based benefits, be sure to communicate them clearly. Employees should know exactly what they need to do to earn incentives. Clear goals make it easier for your employees to succeed, and success helps your company grow.