With increasing resignation rates, high inflation and trends like ‘quiet quitting,’ employees are left wondering if their compensation accurately represents their value. HR leaders across industries, who are held accountable for making sure compensation cycles are fair, are all too aware of these trends. We recently sat down with top HR executives to share ideas on how to put an organization’s money where its talent is — and we addressed all things compensation: total rewards, pay transparency, budgets, incentive plans and more. Here’s what they had to say.
Pay Transparency in Action
When attracting talent, new employees may be offered more compensation than longstanding employees in similar roles. As a result, current employees have begun to demand information on their pay. And in some states, pay transparency is no longer just a conversation but is required by law.
Compensation transparency strategies will look different from company to company and state to state, as there are many aspects of pay that HR leaders might choose to disclose (or are required to disclose) to employees. Pay transparency can include the disclosure of salary ranges for specific jobs, salary ranges for categories of jobs, bonuses and the criteria for earning them, pay policies and the criteria for pay raises.
One strategy that organizations are implementing is training managers on how to have conversations about compensation with their direct reports. Other organizations are opting to post salary ranges for all positions nationally – although this gets complicated when employees are spread across differing geographic regions.
As a best practice, executives should regularly assess the pay ranges for all positions against the labor market they recruit in to ensure there are no outliers.
Total Compensation Statements
Some organizations had already been sharing total rewards statements with their entire workforce prior to recent trends. Holding all-staff meetings with the CEO on total rewards following increases, bonuses and equity awards has been highly valued among employees. Other organizations have found success in providing several small or ongoing education sessions around total compensation statements, rather than one annual meeting on the topic. HR leaders might consider a combination of the two approaches, as employees take in information in unique ways.
Remote vs. Hybrid vs. In-person Work
Inevitably, the topic of in-office requirements is still top-of-mind for HR leaders. An organization’s remote work philosophy often goes hand-in-hand with its compensation transparency philosophy because both help build trust between the employer and employees.
The group of executives we spoke with agreed that before making any major decisions about remote, hybrid or in-person work, HR leaders should take a hard look at productivity metrics. Some organizations have seen success with requiring departments to come into the office for a number of consecutive days per month. During these days, organizations can take advantage of the face-to-face time by hosting town hall meetings, trainings, celebrations, and social events to boost morale and team bonding. For other organizations, productivity has skyrocketed in the remote environment, but executives found that employees were missing the social engagement they once had. To address this, some departments can plan for in-person workdays once a month and hold social events to increase face time between teammates.
We know developing compensation strategies is both a science and an art, so companies need to stay current with local, state, and federal laws and be creative when developing or refining compensation plans if they want to attract and retain top talent. As your organization evaluates your compensation philosophies and strategies, don’t hesitate to reach out to our Sikich HR experts to help make them more effective and valued by your employees:
