Offering a fair compensation helps to attract, retain, and motivate high-quality talent. In a 2012/2013 workplace report by Kenexa, 85% of respondents agreed that a fair pay significantly impacts personal life satisfaction, and mental/physical health. A further 78% of respondents agreed that their engagement is also significantly impacted.
There’s more to fair compensation than the number on the paycheck, and with that in mind, here are three key considerations for the creation of your compensation strategy:
Do your homework
There are several online resources available to help you establish a benchmark for salary norms. In addition to reports on the average range of salaries for industries, roles and experience levels, you should also ask for your candidate’s salary expectations and history.
A word of caution: data on salary websites needs to be considered carefully, as it could be inaccurate for your particular location and/or industry. To ensure accuracy in your salary review, you may choose to work with a reputable HR firm to conduct a comprehensive compensation survey and report. By reaching out to a third party, you are able to receive up-to-date, accurate, and unbiased salary information to aid in setting compensation structures at your organization.
Get creative with your perks
The key consideration when offering perks is to bear in mind what makes sense for your business and your people. What makes sense to a credit union may not make sense to a tech startup and vice versa, so it’s important to keep it in line with your company's organizational values, goals, and objectives. For example, a fast paced work environment where your employees are working 50+ hour weeks may choose to offer reimbursement for commute costs and provide more than the legally required vacation to start.
By offering meaningful perks, it shows your employees their contributions are appreciated and creates an environment where they feel valued for their commitment.
Understand the psychology of salary negotiation
When you are ready to make an offer to your dream candidate, you should approach the negotiation table with a mind to discuss, not necessarily 'to win.' While some candidates may be willing to settle for a lower salary than they actually want, down the road, this compromise could lead to resentment or even resignation.
When you suggest a salary, you should expect a counteroffer from the candidate. Take time to consider their response. In doing so, you can do your due diligence to ensure your final decision is made in the best interest of both the organization and the individual.