The marketplace for talent continues to change:
- Workers are feeling more empowered to make moves
- They freely share compensation, benefit packages and opinions of leadership online
- Turnover continues to increase
All of this adds to the growing concern among companies about how to best retain top talent. Companies can no longer afford to give a mere 3% increase across the board. Instead, compensation strategies are often adjusted to:
- Support overall retention
- Recognize high performers
- Maintain competitive position within the market
- Hold onto workers with specific and desirable skillsets
Raises, title changes and increasing benefits are among the top methods organizations plan to enact in order to retain their workers.
While using market data is common practice for determining employee compensation, it is paramount to ensure that you have the best data. While there is a temptation to gravitate to the concept of free online data, this doesn’t provide the most accurate picture of the broader marketplace. Free data can’t take into effect organizational specifics, such as:
- Total reward or compensation philosophy
Free online data also does not enable you to hone in on specific skill sets. To best capture these organizational specifics, government data, industry specific surveys and/or traditional third party surveys are a better option. It is also wise to use a combination of sources to obtain a robust and well-rounded market composite to make compensation decisions.
So what should the CEO be aware of? She or he should know that top performing organizations create compensation strategies to ensure their compensation practices align with the organization’s core values. These include: completing market studies, annual salary range increases, providing more frequent incentive pay (quarterly or bi-annually), as well as budgeting increases higher than the typical three percent. And while higher base pay is valued, top performing companies also recognize the value of promotions and career development opportunities.
Newport Group’s Compensation Consulting Team can help organizations verify the competitiveness of their compensation programs or build them from scratch. To learn more, contact your Newport Group representative.
Newport Group, Inc., and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services.