As an employer, it is essential that you remain competitive in the marketplace, not only with your customers but also with your employees. After all, if you don't have a competitive compensation package, you'll risk losing your best employees to companies that are offering more and better benefits. One of the best ways to ensure that you remain competitive is to create a clear compensation policy. This eliminates the guesswork from determining fair compensation packages. Here are a few of the things to consider as you create this plan.
Do Your Research
Before you can write a thorough compensation plan, you need to do some research and compile some key information. Start by evaluating your current position in the marketplace. You need to know who your current competition is in terms of retaining your best employees. This is vital, because not knowing what your key competition offers can make it hard for you to reasonably compete. Evaluate your competition based on companies in similar industries of similar sizes that are targeting similar customers.
Decide What You Can Offer
Once you know what your competition is offering, it's time to decide where you stand and what your company can provide in a compensation package. Remember that compensation goes beyond just the core salary that you pay for positions. You can enrich your offerings with things like bonuses, incentive payments, commissions, and even stock ownership options. Some companies find that gym memberships and on-site daycare are great incentives for their employees. Think about the general culture of your company and what you can reasonably offer. Don't overextend your resources, because being unable to meet these compensation commitments will jeopardize your credibility with your staff.
Establish a Review Process
Once you have decided what kind of compensation package you can offer and you've adjusted it to maintain some relevance with your competition, you'll also want to think about how you'll review that plan in the future. A competitive plan now may not be competitive in a year. Compensation packages evolve on a regular basis, so you'll want to be sure that you can keep informed of industry changes and expectations so that you can respond accordingly.
Put Everything in Writing
Putting your compensation policy in writing is a key step to give it legitimacy. By putting everything down on paper, you not only have a solid policy to guide your efforts, but you also have the supporting documentation in case your compensation practices are ever called into question. Be as specific as you can about how you will maintain your relevance in the industry and include details about the review process. Finally, make sure you include information about how your employees can validate their compensation package as it applies to your current plan. The more transparent your information, the more valued your employees will feel.
Work with a Compensation Consultant
If you want to make sure that your company is staying at the top of the industry in terms of compensation offerings, you may want to reach out to a compensation consultant. He or she can evaluate your current compensation packages, including fringe benefits and other details, and compare that to the prevailing options in your current industry. Compensation consultants specialize in finding areas where you can improve your offerings or benefits and suggesting perks that you can add at an affordable rate. In fact, an annual assessment with a compensation consultant can help ensure that even your employee reviews and merit raises are done in line with what is expected of your field.
Don't risk losing your best staff to a company that's luring workers with more elaborate benefits. With these tips and some attention to the industry details, you can maintain a compensation package that's sure to help you retain the quality talent you worked so hard to recruit.Share
22 April 2016
There are times in which reaching out to an outside consultant is the best course of action to take for your business. I had been struggling to earn a nice profit with my business for nearly a year before I reached out for help. After getting some help, I have been enjoying a greater level of success and things have picked up quite a bit. What can a consultant do for you? How do they help? My blog will show you why you should invest some money in hiring a consultant to help you improve the position that your business is in.