The reality is that compensation goes beyond what a person is paid for his or her role in a company. The complexity of the word and its definition reaches other important HR topics like direct and indirect rewards, benefits and anything else that is given to the employee with the purpose of motivating him or her, and giving them some kind of return for their contribution. Due to the fact that it really does encompass so many sub topics, there is a need to create policies and regulations to standardize and set up the compensation and benefits package that the company offers to its employees. In today’s market, it becomes even more important, because many of the top talents in the world will decide where they work based on the compensations and benefits that the company has to offer. So, this will play a major role in acquiring and retaining talent, which is the best way of managing effectively the most important asset of a company: its employees. As your company begins to create the policies, never forget that every step you make is helping you to determine the organizational culture your company will have, you can read more on this on the Jason Hanold WordPress blog. So the faster your company realizes the importance behind having a compensations package that stands out, the faster you can start participating in the global, national or regional market as a competitive workplace. This will require HR teams becoming quite creative and trying to explore new ways of stretching their limited payroll budget, especially since there is no sign of competitive workplaces disappearing any time soon. The challenge will be to optimize workforce programs that can be attractive to new talent and will help retain current one. The objective will always be to retain and engage talent as much as possible to make a difference between yourself and other companies.
First, it’s important to truly understand what compensation and benefits means. Compensation is basically what the employee gets in return for their work. The exchange that occurs with your employees when you offer and pay them a salary, is compensation. In today’s workplace, employees expect more than just monetary compensation for their contributions, so this is where benefits come in. Some benefits are inherent to their salary, and will not depend on their performance. Although it is said that the compensation and benefits do not hold a direct relationship with an employee’s performance, in today’s world especially, poor benefits or compensation inconsistencies will affect your employees’ level of satisfaction and this will lead to a high turnover. A benefit package may include perks like a cell phone, training and other professional development activities. Having a good compensation and benefits package will have many advantages like a high level of motivation, job satisfaction, low absenteeism, and finally low turnover. Your employee also finds advantages like peace of mind about their financial and personal security, and an increase in confidence.
HR teams have to find different strategies to make sure their compensation and benefits package are prime in their industry, so they can attract the best talent. One trend for this year that HR teams have to be on the lookout for is segmentation and differentiation. By setting up pay differentiation based on roles, you’ll be able to step away from the one size fits all strategy and cater to those who will add value to your company. This way HR teams will be investing money the most on the employees that give the most return. This will take courage, because it is not easy to objectively differentiate salaries and bonuses.
Another consideration is to create incentives for employees that are in for the long haul, not just performance or return. Focusing on flexibility and communication are also trends in 2016. Companies have already begun to move more and more towards telecommuting, unconventional working hours, and any other conditions that offer flexibility to their employees. Openness and transparency will be huge as communication becomes more and more important for employees. HR will need to make sure they know how to communicate to their workforce how and why they have decided to set up their compensation and benefits package. The more they understand the philosophy behind the decisions made, the more motivation it will generate. Another trend is a huge interest in health and wellness. This employee value proposition will be a key factor that some employees look at when deciding on which company to work at. One thing to consider though is that whatever programs are set up can be effective, are sustainable in time and can be successful in their company. Finally, just remember that data is the key to decision-making, so understanding the data of the trends in your workforce and others will help you to make the best possible decisions.