It Takes More than Salary to Attract and Retain Talent
With just a few clicks, job seekers can easily access the information they need to negotiate compensation packages with potential employers. It’s common for applicants to walk into an interview already knowing their financial value, the size of the candidate pool, what your competition is offering, and how your reputation stacks up. Organizations, hoping to attract new talent, need to know how salaries are aligned within the industry, by geography, and by roles.
In addition to attracting new talent, trends in workforce mobility have necessitated that employers stay current with salary and benefits offerings to retain valuable talent. With competitive information at their fingertips, current employees are well aware of their worth. Organizations who don’t stay abreast of salary, benefit, and severance trends risk losing valuable talent. Employees who realize their salary and benefits don’t stack up with the competition are likely to walk out the door, contributing to the rising costs of unfilled positions.
In fact, one in three employers is concerned voluntary exits will increase, according to Glassdoor’s Statistical Reference Guide for Recruiters. The concern is warranted, according to the 2017 Salary Guides recently released by our parent company, Randstad. The Guide concludes that, “Lowballing compensation for both new and existing employees may cost you more in the long run. The average cost of an unfilled position as $500 per day.”
The Guide is a compilation of market trends in salary based on experience, industry, and location, as well as information on appropriate compensation and benefits for each unique hiring situation. It offers employers the information they need to attract and retain talent, as well as some advice about how to manage compensation.
Insight #1: Salary and benefits matter
According to the Salary Guide, “salary and benefits” was cited as the most important factor across generations, genders, and education levels when choosing an employer. Don’t be fooled into thinking salary only matters for new hires. Research by Glassdoor found that 35 percent of employees are so unsatisfied with their salary that they’d be willing to go through a new job hunt to improve their compensation packages. It’s important to keep offers of employment, including the salary, appealing to prospective candidates, and compensation for existing employees at, or above, industry standards.
What happens if you offer a salary below the market average or forgo bringing an existing employee’s compensation up to, or above, the industry standard? While you might be saving money in the short term, both of these scenarios could cost you more in the long-run. Don’t waste valuable time interviewing candidates, only to be turned down at the point of offer or put yourself at risk of having your star employees poached by competitors willing to pay market rate, or more. It’s more cost-effective to ensure your compensation and benefits packages are in line with the industry standard, or better, thereby retaining happy employees than to spend the time and resources it takes to recruit, hire, and onboard someone else for the position.
Insight #2: Give candidates a reason to join and stay.
When parts of your organization are going through times of change, retention and employee satisfaction should remain top of mind. We’ve found that when employee salaries are aligned with industry standards, employees are less likely to look elsewhere for another job.
The supply and demand of talent significantly impacts how attractive a compensation package needs to be to draw in top candidates. Randstad’s 2017 Salary Guide emphasizes the small candidate pool many companies are facing when working to hire talented employees. There are currently 5.5 million job openings and only 1.4 unemployed people per job opening. With low unemployment and a skilled labor shortage, passive candidates need a reason to consider new opportunities.
Building a strong company culture and reaching high employee engagement rates are crucial components to achieving success in today’s market, where people are commonly wooed away by better offers. Organizations hoping to retain talent have begun to expand their compensation packages to include services and employee perks in addition to competitive salaries.
Our customers find that offering a structured redeployment program that allows people to seek new opportunities within the company provides incentives for talent to stay. They’ve found that retaining the best talent is one of the best ways to strengthen the employer brand. As an additional benefit, employees transitioning to new opportunities learn new skills and sometimes even change career paths that lead them to greater contributions to the organization. Organizations offering an array of outplacement and redeployment services are building a culture of trust and care, giving employees a reason to stay and speak positively about the brand.
Insight #3: Personalize each unique employment situation
The instant and varied information easily available on the internet has created an environment where today’s job seekers, and existing employees, are more informed than previous generations of workers. Armed with all the information they need to demand competitive compensation packages, employees and job seekers are taking control of the negotiation process.
Whether you’re hiring an employee for the first time, or offering redeployment services to displaced employees following a mass layoff, it pays to take a personalized approach to compensation. Even with information about salary and benefits at their fingertips, candidates are really looking to make a personal connection with their prospective employer. Your brand should shine throughout the recruitment process, and reveal to the candidate why your company is the ideal employment option.
When offering redeployment and career transition services to exiting employees, surround them with a personalized experience. Successful redeployment programs meet employees where they are with customized programs that focus on each employee’s unique needs and desires for growth and change. From start to finish, individualize your redeployment strategy as much as possible to truly care for the employees at your company.
It takes more than a paycheck to keep employees happy. Strong retention and engagement rates are rooted in a company’s culture and brand. Be aware of market data and ensure you’re treating your employee’s fairly with respect to their salary and their benefits - don’t undercut employee salaries. As a business leader, you have the opportunity to pull in the very best talent. It’s more cost-effective to keep high-performing workers and offer compensation packages that attract the best talent, than to pay the cost of employee churn resulting from failing to understand and make conscious decisions around industry trends for salary and benefits. Personalization and fair compensation help a company and its brand perception thrive, ultimately leading to better engagement and retention rates and greater employee happiness.