Is your company growing quickly? Once a business goes through its first major hiring spree, challenges with compensation management can start to become apparent. Start-ups may be able to get away with setting compensation without a strategy, but established businesses need to be more strategic.
With the right technology, like a compensation management solution, you can strategically manage your company’s compensation and continue to grow your business. Here’s why growing organizations need a strategic compensation management solution.
To Bring Visibility to Total Compensation
Do you know how much each of your employees is being paid, including salary and all benefits? If your current strategy includes managing compensation on spreadsheets, these numbers may be hard to find.
When you use a strategic compensation management solution, you can view each employee’s total compensation with a click. Employees can view their total rewards summary, so they’ll know exactly how much they’re being compensated for their work.
Why does total compensation matter? Employees often think of their compensation as just their salaries, plus occasional bonuses. They don’t see all the great benefits you pay for, like health insurance, life insurance, vacation days, and wellness programs. Seeing how much they’re actually being compensated can make employees feel more appreciated, more loyal, and more engaged.
To Drive the Results You Want
You know where you want your business to go, but do your employees know? If your employees aren’t moving in the right direction, you might not get the results you want from your business. With a strategic compensation plan, you can encourage your employees to take certain actions. Compensation needs to be carefully chosen to drive the right actions, so you may want to work with compensation specialists to determine the right incentives.
For example, if your main goal for your business is increasing your market share, your compensation strategy needs to reflect that. Employees should receive compensation for taking actions that move the company towards that goal, like bringing in new customers. For example, you may want to offer compensation like bonuses or extra vacation days to employees who bring in a certain number of new customers.
To Measure the Return on Investment
Your company spends a lot of money on compensation, but do you know if you’re getting a good return on that investment? Salaries and benefits are often viewed as a cost, so many companies don’t measure their return on investment.
In fact, salaries and benefits are an investment in your employees and your company. You should measure the return on investment to make sure you’re getting your money’s worth, and make adjustments as necessary.
To measure return on investment, re-visit the results you wanted to get from your compensation package. For example, if you offered bonuses to get employees to make more sales, check to see if your sales increased, and if so, by how much. If you gave employees more vacation time to increase their productivity, measure their productivity to see if your investment paid off.
To Monitor Compliance
There are many employment laws that Canadian businesses need to follow. If your company breaks any of these laws—even if it’s an innocent mistake—you could get fined. This is why it’s important to carefully monitor compliance. Since there are so many employment laws, keeping your company compliant can be stressful.
With a compensation management solution, you can easily keep an eye on your company’s compliance. All you need to do is input the various laws you need to follow in your area, and the solution will give you visibility to any problems. This visibility helps reduce your liability and gives you some peace of mind.