How do you stay competitive on the salary front without going overboard? Here are a few factors to consider when determining your strategy.
Despite what some employers may think, compensation is still a major reason for employees to leave an organization. How can you use it as a tool to both retain and attract employees? A clear and effectively explained structure and customizable options that enhance the overall compensation package are additional tools that you can put in place.
If you’d like to review your total compensation and achieve the intended results, you must focus on both strategic thinking and a structured change management process.
Before changing your total compensation, clarify the reasons for doing so
Before reviewing a salary structure or employee benefits, your organization could benefit from clarifying the challenges you’d like to address. Are you hoping to:
- catch up to market competitors?
- reduce internal inequity?
- improve employee loyalty?
- better meet your teams’ expectations?
This reflection process will allow you to make the right changes for the right reasons and clearly explain them to your teams.
The retained solution must be tailored to your organization’s circumstances and support its business priorities, culture and employee needs.
This process must go beyond simply attracting new employees. In order to ensure equity, consistency and engagement across your teams, your current employees must be taken into consideration.
Consulting employees and representatives of various groups in advance can also help you to validate needs and identify concerns. These individuals can then act as internal ambassadors and contribute to fostering change by-in.
Implement a fair internal salary structure
Some companies, mainly SMEs, have a limited or no appropriate salary structure. However, determining the value of the jobs within your company, and not only the value of an individual's CV or profile is important. This evaluation, based on objective criteria, will allow you to group jobs with a similar level of responsibility, and then build an appropriate salary scale.
The structure does not have to be complicated. It can simply be a competitive salary scale, tailored for each position. Employees will know their salary can progress over the short, medium and long term. Being able to envision their future within the organization reinforces their loyalty.
Demonstrate transparency
You should be able to explain how your salary scale works. How is it assessed? What are the criteria? Your employees need clear answers to their questions. Ensure that you carefully consider all the aspects before communicating any rules and changes. Bear in mind that your employees frequently discuss salary conditions.
Where required, don't hesitate to offer support or presentations aimed at explaining your salary structure and criteria. This will serve to promote the opportunities offered to employees.
Support the change process and equip your managers
Once you’ve considered and defined the changes, ensure you spend as much time on their implementation. Determine how the changes will be shared, and what messages will be communicated when and to which groups. Anticipate any potential impacts and questions the employees are likely to ask.
Your managers play a central role since they will often be tasked with explaining the changes and addressing their team’s worries. They must understand the rationale of the process, be equipped with clear and consistent messages, and supported with tools and training or preparatory sessions.
Don’t limit your communications to a one-time announcement. Introduce feedback and follow-up systems to document reactions, adjust the approach where required, and support the adoption of new practices over time.
Enhanced benefits and flexible management
In addition to their salary, employees want access to benefits that suit their situation. Total compensation packages allow employers to be creative without going overboard on salaries.
An increasing number of organizations of all sizes offer their employees tailored benefits such as a wellness fund or range of customizable options. For example, this could be a bank of vacation days, an adjusted schedule or an additional contribution to an RRSP rather than a salary increase.
Here are a few ideas of optional and standard benefits that your organization could choose to offer:
- A schedule tailored to the employees' needs (taking equity and the specifics of the job into account);
- Innovative workspaces with collaborative areas and ergonomic desks;
- Working remotely (fairly standard now in most businesses);
- Access to a fitness room, yoga courses or a corporate card to visit a spa;
- Telemedicine consultations and repayment of health and wellbeing expenses;
- A calendar of events of interest to employees of all ages;
- Mass transit cards and free parking;
- A dry-cleaning service to save time;
- Repayment of job-related training programs;
- Fostering an inclusive and diverse work environment where each employee feels valued;
- "Workcations," a mix of work and vacation that allows employees to work from anywhere in the world for a few months every year;
- Access to a cottage so employees can work in a different environment.
Naturally, you shouldn't overlook medical and dental insurance, a pension plan (group RRSP, defined benefit or defined contribution plans, VRSP for SMEs) and an employee assistance program (EAP).
Staying competitive
It is essential to make employees realize, through a total compensation statement, that these benefits are added to their salary and increase its value. For example, an employee earning $60,000 per year may find that they actually earn $72,000 when they add in their benefits.
Inflation should not be the only criterion for a salary increase. It's a matter of balance. If your salaries are too high, it can put your company in a difficult position when it comes time to purchase equipment or during a slow period. An excessive increase may backfire and result in layoffs rather than retaining employees.
Naturally, you need to consider the market. Several public studies and data are available to estimate the competitive salary that should be offered for each position. This applies to operational (labourers, clerks), tactical (supervisors, professionals) and strategic positions (managers, directors) alike. The salary needs to reflect the level of skills required.
Companies that offer profit sharing incentives should make them available equitably to all employees who meet performance objectives.
In order to control these salary increases in the context of a higher cost of living, certain companies are offering two salary revisions per year to react to inflation in real time. Employees appreciate this practice.
Employers need to be aware of the salaries and benefits offered in their business sector to make attractive and creative proposals. However, opportunities for advancement, company values and employee recognition are also part of the total compensation package and are incentives that should not be underestimated.
In order to thoroughly assess your options, get advice from experts. They can help you get on the right track and move forward with your initiative, from strategic reflection to implementation and change management.