5 things you can do now
Have you ever heard the phrase “slow down to speed up”? Instead of scrambling at the 11th hour to pull together a lack luster compensation strategy, sometimes the best thing to do is slow down. In today’s complex labor market, having a competitive compensation strategy is imperative, and taking valuable time to strategize will allow you to head into the new year with a strong compensation plan in place.
Determining whether your base pay, salary ranges, benefits, and other direct and indirect compensation offerings are competitive is imperative. However, you first need to define what your organization’s compensation philosophy is.
From there you can create and fine tune your compensation plan annually by following these 5 planning tips from the experts at Mercer.
- Collaborate with key stakeholders
- Evaluate survey usage and data needs
- Create a continuous employee performance analysis strategy
- Identify which job families may needs special attention
- Create a wish list for the new year
1. Collaborate with key stakeholders
Compensation structure and total rewards programs impact your entire business. If you lack an attractive compensation plan, you will have more challenges securing the employees you need. That sets off a chain reaction ultimately preventing the organization from achieving objectives.
Rather than prioritizing downtime in the summer, use these months to collaborate with the business’s stakeholders. This includes everyone from department managers, executive leadership, finance professionals, recruiters and other members of the human resources and compensation management teams.
Consider allotting about 30 to 45 minutes during the slower months to get together and have a meaningful conversation. Since your goal is to discover how best to support the employee you’ll want to be sure to identify:
- What is and isn’t working
- Any specific priorities or concerns
- How you can change to support these priorities
2. Evaluate survey usage and data needs
For HR and Compensation professionals, access to data insights from salary and policy and practice survey results are the name of the game. What happens when those surveys fail to provide the needed insights?
Operational needs, job performance duties, and the nature of the business itself change over time. The surveys that you use to build a desirable and market competitive total compensation package may need to change to provide what your organization needs.
A best practice is to review the salary surveys you are currently using and identify if there are any data gaps. Getting total compensation right is the best way to attract and motivate the employees you need. The salary survey data you use must be reliable and complete.
Need Salary Survey Data?
You can start by using the Mercer Benchmark Database, to evaluate pay and design competitive offerings. With data from over 6,000 positions, you can purchase the entire database – or the module most relevant to your industry.
See how Mercer can help you deliver on this initiative
3. Identify which job families need special attention
Some jobs (or job families) are the problem child of the business. It seems that no matter how you advertise for the role, it fails to attract the best candidates or the ones who will last. To get the most bang for your buck, select those job categories that need some extra care.
Beyond simply comparing benchmark jobs to survey data, it’s a best practice to review your most highly populated job families annually, and put others on a rotation every few years.
Determining factors include jobs that:
- Are paid lower compared to the market
- Have disproportionate turnover rates
- See continuous requests for salary adjustments by current employees
- leave too much space or compression with the salary range (limiting an employee’s growth opportunities)
- Deserve pay increases and the impact that has on the salary ranges of current employees
4. Create a continuous employee performance analysis strategy
It’s not enough to implement a new compensation plan and call it quits for that fiscal year. You won’t know whether you’re on track to hit certain key performance indicators related to your objectives without continuous analysis.
For example, imagine your goal is to hire and retain a new team. This team’s task is to assist a given department in achieving a particular key performance target. To reach your own goal, you’ll need to not only identify the team members, but empower them to remain with the business.
If the year closes and half the members have left, then it’s too late to correct whatever problem caused them to leave. Instead, create an automatic process to check employee engagement and satisfaction at least quarterly.
Bonus tip: don’t limit employee engagement checks to new employees. It’s important to be listening to both new and tenured employees.
5 Create a wish list for the new year
The next year’s planning likely begins a few months after summer ends, or 3-4 months prior to the start of your fiscal year. Make this time more effective by planning for it now.
Start by coordinating with the departments you assist. Based on your one-on-one check-ins, you should have an idea of their needs and how you can support them and their workload.
Budget time and resources now to enable them to be successful. At the same time, commit to timelines with your colleagues while also setting realistic expectations. Then use this information to demonstrate what resources or budget you need for the next fiscal year. By relying upon facts and figures communicated to you by the business’s constituents themselves, you can present a powerful argument to the financial team.
Finally, design an annual calendar that sets you up for success. You’re already aware of numerous activities that recur annually. Schedule these first:
- Annual increase planning
- Administrative tasks
- Incentive compensation processing
- Performance management responsibilities
- Quarterly or annual survey rollouts and processing
Reach your annual compensation goals with Mercer
Mercer’s suite of data-powered products are designed to inform your compensation planning and annual budgeting needs. Products like Mercer’s Salary Surveys will enable you to get the information necessary for constructing logical pay structures and identifying top talent.
Contact us today to get started.