Is your compensation and benefits package aligned with your firms goals and designed to attract and retain a winning team? Firms with a mediocre compensation plan are likely to lose potential qualified job candidates and deal with high turnover. Costs involved with employee turnover are high. Retain your team by giving them what they want. Incorporate fundamental components into your compensation package to enhance morale, performance and employee retention.
In addition to salary, an employee benefits package should be standard. It is expected by today’s leading employees. Employees equivolate their value by how you compensate them. They are more productive, focused on common goals of the firm and acquire loyalty.
Most business owners are in denial when it comes to what employees want and what it takes to retain them. A new study by MetLife found that employee loyalty has dropped steadily since 2008, but employers mistakenly believe it’s on the rise.
What employees really want in a compensation package:
Base Salary– Provide a base salary along with a structure of ranges. Employees want and need something to strive for. If they can’t visualize “moving-up” and advancing in the firm, chances are they will find another place where they can excel. No one wants to be in a dead-end career.
Bonuses- Bonus dollars based on performance are a great incentive to increase productivity. Set goals that are measurable and attainable, yet stretch your employee to develop and reach new heights. Performance based bonuses don’t need to be a competition in the work place, use bonuses individually or as an entire group effort.
PTO: Employees need time away. Without it comes burn-out resulting in reduced productivity. Many firms are choosing to offer a Paid Time Off program or PTO. PTO offers a flexible arrangement that give employees a set amount of days off to be used at the employees discretion for vacation, sick leave, personal days, etc.
Health and Wellness– If your firm is not offering a complete health and wellness package, you are going to fall short in attracting and retaining qualified and loyal employees. A total health and wellness package should include health insurance with dental and vision benefits, long and short term disability and life insurance. The good news for employers employees would rather pay for a portion of their benefits rather than not have them at all.
401(k) or Other Retirement Plans– Employers are in the dark when it comes to determining what benefits are key drivers to employee loyalty. As referenced earlier, the study by MetLife revealed more than half (52%) of employees named retirement benefits as a vital payback. Financial insecurity has become more widespread, therefore, employees are looking for ways to plan and enhance their retirement years. Retirement plans give employees a compelling reason to remain loyal.
Flexibility- Offer some flexibility and your employees may be willing to give up some of the other “perks”. Telecommuting’s popularity is on the rise. Working from home has never been easier with the growth of mobile technology. Employees, particularly those raising families, are in desperate need of flexibility. Place trust in your employee and provide flexibility. The trade off could benefit your bottom line by lower costs of “housing” another employee along with increased productivity from your telecommuter.
Your firm’s compensation program will need continual reinforcement. Communication is vital between managers and employees to keep your compensation strategy alive. Plan frequent reviews of your firm’s compensation plan as well as frequent communication with each team member. Talk open and honestly. Encourage feedback and be willing to make changes. As a successful leader, it is important to know in today’s economy you will need to reach and maintain high levels of employee motivation, engagement and contribution.
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