Compensation Strategies of High-Performing Companies

According to Payscale.com, successful companies are behaving differently in this candidate-driven market to get pay right and drive better business results. A survey of over 7,500 business leaders in North America uncovered a few notable tactics, published in their recent Compensation Best Practices Report.

6 Compensation Strategies of High-Performing Companies

Payscale found that top companies (businesses who are number one in their industry and who exceeded their previous year’s revenue goal) embraced six perspectives that made them outstanding in their industries:

1. They view people as their biggest asset.
2. They give bonuses.
3. They’re increasing their budget for bonuses this year.
4. They’re promoting more transparent communication about compensation.
5. They provide a total rewards statement for compensation.
6. They give team bonuses.

Also, on the average, 84% of industry as a whole gave raises the previous year. Retail and customer service industries exceeded the average with 89%, while 87% of manufacturing companies gave raises. Engineering and science and technology both came in at 85%, with business and marketing just under the average at 83%.

The Chasm Between Employees and Employers

More significantly, the survey revealed that there’s a chasm between employees’ and employers’ perceptions:

• 73% of employers believe that employees are paid fairly, while only 36% of employees believe the same.
• 78% of employers believe that employees are valued at work, while only 45% of employees feel they’re valued.
• 40% of employers feel that their company is transparent about pay, while only 21% of employees believe transparency is promoted.

4 Benefits of Running a Compensation Report

1. To you as an employer, these findings act as a caution to be sure you’re paying your employees the going wage. We highly recommend running an objective Payscale or comparable report every time you open a new position.
2. Learning the market wage for your open job ensures that you don’t overpay, although you should never underestimate the value of paying well for a qualified candidate in this competitive market.
3. A market wage report also communicates to candidates that you know how to value them for their unique contribution to your organization, in a time when qualified candidates are in high demand.
4. If your open job is in the harder-to-fill category, running a compensation report can give you a competitive edge and help determine what other perks you can or need to offer to increase the attractiveness of your open job.

“More than 16 million Americans are unemployed or underemployed, according to the Labor Department, yet there are currently more than five million job openings going unfilled in the U.S.,” said Richard Wahlquist, president and chief executive officer of ASA (American Staffing Association). “Addressing the skills gap must be a top priority for businesses, government, and educators because it is negatively affecting economic growth and the employability of U.S. workers.”

Since the skills gap isn’t going away anytime soon, it’s to your advantage to learn from the compensation strategies of high-performing companies. As shared in a previous post, candidates are rejecting offers about 25% of the time because of money and benefits. Finding out the going wage for your open position is a smart way to begin your next candidate search.

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