Signs You Need a New Compensation Strategy to Attract and Retain the Right Talent

Are you confident that your compensation strategy is attracting the right talent and contributing to a healthy organizational culture? Or are you concerned that your employee compensation plan is contributing to your biggest frustrations and pain points?

Whether you’re confident or uncertain about your compensation strategy, read on to learn more about common signs that might mean your compensation package is causing undesirable business results.

Image of an employer handing a check to their employee.

Is Your HR Compensation Strategy Outdated?

When was the last time you updated your employee compensation plan? The job market has changed significantly over the past several years, so using a compensation strategy you developed at least two years ago may be impacting your company’s performance and culture.

Below are a few signs to look out for that might mean your pay and benefits package needs some fine tuning:

You’re Concerned About Overpaying

It’s necessary to provide valuable employees with higher compensation to attract and retain them. However, if you feel that some employees don’t bring as much value to your company as others, you may need to adjust your strategy. Consider how you can encourage employees to provide more value at a fair price rather than creating a strategy to save money by paying employees less. Developing a new compensation strategy using data-driven variables based on skill set, industry, location, company size, and type gives you guardrails that proportion compensation to value.

You’re Experiencing High Turnover

If money doesn’t talk, valuable employees often walk—especially when they realize there are greener pastures at another company. While high turnover can be tied to a wide range of issues other than pay, like culture fit and employee engagement, unfair compensation is definitely a factor to consider if your company’s turnover rate is high. A strong compensation strategy should show candidates and existing employees that if they can provide enough value to your business, their pay will reflect what they bring to the table and enable them to achieve their desired, fair pay rate in their current role.

Image of a person packing up their work belongings.

Your Employees Don’t Understand Their Pay Structure

When your employees don’t understand how their day-to-day work impacts their paycheck, they can often lose the motivation to work hard and produce results. The most motivated, productive employees have an understanding of how their daily tasks contribute directly to their pay. For example, adjusting your compensation strategy to include pay structure details, like how much closing a sale will increase an employees’ monthly pay or how much their next bonus will be if they resolve a client issue, can help drive hard work and productivity. A strong compensation strategy provides employees with the right pay delivery details to give them an understanding of how their efforts impact their pay, but even a high-level employee compensation plan can miss the mark if it’s not rolled out successfully. If you want your company’s pay delivery details to deliver the results you want, make sure to communicate and explain how your pay details work so that your employees understand it. Being transparent and offering guidance on your business’s pay and benefits is the key to developing a quality compensation strategy.

You’re Not Attracting the Right Talent

Any candidate can look like top talent with the right resume. But you’re looking for the right talent. Candidates with the right talent have a valuable set of skills and experiences that will help you solve your business challenges and drive the results you want.

To recruit the right talent, you need a well-structured compensation strategy that attracts job seekers that have the skills and experiences you’re looking for. When the right talent looks at your job descriptions and employee compensation plan, they want to see a well-structured strategy that tells them that if they work for you, their pay will be sufficient and fair, motivating them to bring their valuable efforts into their day-to-day work.

Your Business Has Changed in the Past Five Years

If your business has experienced growth or shifted focus, it’s important to change your compensation strategy accordingly. As your business grows, it’s important to account for creating more narrow job roles, and if you promote internally, a detailed employee compensation plan will help you retain valuable employees and motivate them to work toward career advancements. If you’ve recently shifted your business goals that require your employees to put in more time or acquire new skills to achieve, your compensation package needs to reflect that.

Understanding common compensation and benefits issues is the first step in overcoming them.

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Providing Retention Strategies for Employers to Keep Valuable Employees

At AAIM Employers’ Association, we provide small to medium-sized businesses with high-quality compensation strategies and design alternatives that help attract and retain valuable people. Our custom recruiting solutions include helping you customize compensation packages and job descriptions to ensure that you’re attracting the right talent using an innovative applicant tracking system. Our system, AAIMTrack, is also an essential tool for showcasing your brand to the right candidates, making them aware of your culture and benefits so you can find the right fit for your company.

At AAIM, we know that low compensation isn’t the only factor causing valuable employees to jump ship and the right talent to look elsewhere—undesirable benefits and poor policies also play a hand in attracting and retaining the right talent. With our employee compensation and benefits benchmarking surveys, you can compare current employee benefits, business practices, and policies to thriving companies in your industry and geographical location to ensure your compensation strategy has the competitive edge it needs to retain employees. AAIM’s benchmarking surveys cover the number of participants by employee size category, industry-focused results, and comprehensive data regarding employee health and welfare benefits, including life insurance, short-term disability options, and paid time off. Contact us today to learn more about how we can help you develop a high-quality compensation strategy for your business.

Signs You Need a New Compensation Strategy to Attract and Retain the Right Talent

Is Your HR Compensation Strategy Outdated?

You’re Concerned About Overpaying

You’re Experiencing High Turnover

Your Employees Don’t Understand Their Pay Structure

You’re Not Attracting the Right Talent

Your Business Has Changed in the Past Five Years

Providing Retention Strategies for Employers to Keep Valuable Employees

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