Many companies have shifted from working in the office to working remotely or hybrid work environments. Some companies have had to change how they offer their services, shifting online or offering tele-services. Maybe you offer pick-up, take-out, or delivery services where you didn’t before.
All this shifting around has left you rethinking many aspects of your business. One area you may not have thought much about yet is your compensation policy. If you haven’t updated it yet, it’s time to sit down and review. Here’s why your compensation policy needs a second look in the new normal.
The World of Work Has Shifted
The most obvious reason your compensation policy needs review is that the world has changed. Your employees may not be working in the office now. Instead, they might be working from home. Some people may have shifted their hours or be working part-time.
With these shifting work environments, the compensation you once offered might no longer make sense. An example might be offering employees reimbursement for their daily commute. Maybe you offered mileage or assisted with parking passes or transit fees.
Now that your employees aren’t coming in to the office every day, though, they’re not making use of these policies. With the shift to the new normal, this reduced use could be the pattern for a long time to come.
That means your compensation package is now worth less to your employees than it was even a year ago. If that’s the case, it’s time to sit down and adapt your policy to ensure your employees are being fairly compensated.
Demand for Flexibility Is Increasing
Another reason you should review your compensation policies is that your employees are demanding more flexibility. Perhaps your employees have wanted more flexibility in their work hours, scheduling, and even place of work.
Employees want to be seen as individuals with unique needs. They want you to recognize this when they ask for more flexible scheduling. They also want benefits that suit their lifestyles and needs.
Needs have also shifted during the pandemic. Employees who were concerned about travel insurance might be much less concerned about that now. Some team members may want reimbursement for their home office expenses, such as buying new equipment.
Some home office expenses are ongoing, such as monthly phone plans. Others are one-time-only purchases, and your employees won’t need reimbursement for these next year. A program that gives them more flexible spending options can help.
The same is true when it comes to health benefits. Someone might require many prescription medications this year, while next year their concerns will be dental health. Some team members may have put dental needs on hold this year, but they’ll want their funds to be available next year.
The current situation has also spurred more people to start saving. A flexible benefits program could be the answer. A lifestyle spending account can help, as can programs designed to help your team members save more.
Compensation Policy Influences Retention Rates
The job market took a tumble in early 2020, with rising rates of unemployment and few jobs as many employers shut down their operations. Now, as lockdown looks to lift and employers look to get back to the swing of things, the job market is heating up.
In this situation, your employees may decide it’s the perfect time to look to greener pastures. To stay competitive, you need to update your compensation policy. A better compensation policy will help you meet employees’ needs and convince them that sticking with you is the right choice.
If you haven’t made changes to your compensation policy for some time, there’s no better time to look at it than right now. An improved compensation plan could keep both you and your employees satisfied.