A lot of us are considering our workforces as we think about businesses and the future. If we had to lay people off during the winter, we might now want them back. We could be thinking about welcoming part-time team members back full-time or switching remote workers to on-site staff. We may even be thinking about hiring.
Whether they’re team members who have been with us for a while or we’re thinking about what we offer to new hires in a competitive job market, we must examine our compensation strategy.
Why is compensation strategy so important? Moreover, how can you ensure you’ve put together an effective strategy? Let’s take a look.
Why Compensation Strategy Is Important
You might think that compensation strategy just means paying a competitive wage or offering some “extras.” It could even look like annual increases to keep pace with inflation.
While these are all important parts of compensation, none of them alone constitute a compensation strategy.
Instead, strategy looks at how you pay team members, how you adjust their wages to reward them, and the benefits options you offer to them. Strategy also suggests there’s a process for reviewing compensation packages on a regular basis and making adjustments to ensure what you’re offering is in line with both the market and employees’ expectations.
Why does compensation strategy matter though? First, it helps you create competitive compensation packages to attract the most talented people on the job market. Those packages also help you keep your current team members satisfied and motivated. People who are happy with their compensation packages are less likely to seek other employment.
The strategy also gives you chances to review your compensation packages. You should review what you offer and gathering feedback from your team members regularly. You should then use that information to adjust what you offer, so everyone can get more out of their compensation.
How Can You Measure Success?
How do you know is your compensation strategy is working? As noted, you should collect feedback on a regular basis. Ask people how satisfied they are with their benefits packages and what they’d like to see instead.
You could ask them to rank a variety of compensation options based on their desirability.
Another method of data collection is to use technology to monitor usage. How many of your team members are contributing to the pension plan? Take a look at the characteristics of those using the plan. Do they share common traits, such as being in a certain age group? If so, what can you do to make the plan more appealing to other team members?
You can also keep track of benefits usage, so that you know which benefits tend to get the most use.
Improving Compensation Strategy
The first step in improving your compensation strategy is to create a process. Outline how often you’ll review compensation packages and how you’ll gather data on them. Include measurements from technology like a benefits-connected HRIS as well as employee surveys.
Use the data to make strategy decisions about the structure of your compensation package. If no one is using the pension plan, it might be time to restructure. Can you entice your team by offering employer-matched contributions? Or is there another benefit that your team members feel is more important to them right now?
An HRIS with benefits connectivity is integral here. Without this, you won’t be able to access key data to inform your strategy.
Take the Time to Review Compensation Now
There’s almost never been a better time to review your compensation packages and overall strategy. As everyone heads back to work and you look to hire new helping hands, rethinking what you offer is a great idea.
Need a hand getting set up with an HRIS that can deliver the powerful insights you need to run your business? Get in touch with our team of experts and get the data you need now.