Quick Look: In 2021’s employee-driven job market, there’s a hyperfocus on the lack of employees and job seekers and how it translates to hiring practices for today’s employers. It’s causing companies to transform how they structure their compensation packages to keep up with current workforce trends. Although traditional benefits remain intact, employers must identify what level of investment they’re willing to make to stay competitive.
Employees are quitting jobs in record numbers. Recruiters are scrambling to find interested, let alone qualified, applicants. All of this is a sign of the times in a post-pandemic world. It makes addressing compensation trends head-on essential for employers today.
The rippling effects of the COVID-19 pandemic has shaken up how we do things, from how people recruit and interview candidates to how candidates seek out and apply for jobs. People are leaving their employment options open and seeking more than a competitive salary before committing to a new role and responsibilities.
As a result, employers are seeking guidance from a HR solutions partner to identify these new compensation trends and recalibrate how to attract, incentivize, and retain top talent. Part of these include offering flexibility, freedom, and control over their roles and work-life balance.
Over the past year and a half, with many people working from home, a growing percentage of the population had time to rethink their options and search for better opportunities. And, as offices have begun to reopen, the in-person, 9-5 work structure doesn’t feel as secure as it once did.
Many people have adapted and enjoy the comforts of working remotely and want to bring this flexibility with them into a new role. In a survey asking workers if they’d prefer a permanent work-from-home status over a $30,000 annual raise, 64% of respondents from companies like Amazon, Microsoft, Google, and Salesforce said they would rather stay at home.
This newfound sense of freedom has also led many people to leave their current jobs without another one lined up. For companies, this is an instrumental loss as it could mean years’ worth of institutional knowledge walking out the door. Additionally, the value for candidates needed to replace these abandoned roles could be two times the base wage, possibly more, depending on the position.
Investments Toward Employee Growth Opportunities
Money talks. Salaries are important. However, a salary is not the only form of compensation candidates are factoring into their decision making. Growth opportunity is another important factor candidates are considering in today’s job market. They seek a mutually beneficial investment, a concept requiring both employees and employers to level up on learning and recruiting for new skills.
Due to understaffing as one of the side effects of the pandemic, companies are beginning to build out more roles and responsibilities from a technological standpoint. While it’s helping them to adjust while hiring continues to lag, people aren’t seeking jobs which can be easily replaced by automation. They want roles requiring a higher skill and/or experience level, which ultimately means, higher compensation—and companies must respond accordingly.
Global brands are addressing growth opportunities in various ways. For example, Walmart and Target have recently announced free tuition for their employees. Though tuition reimbursement isn’t a new benefit, it’s a bold offering from both companies. It speaks to inclusivity, as well as an ongoing investment of putting employees in a position to grow and succeed with the hope they’ll receive a return of loyalty and commitment.
However, not all companies can afford this type of benefit. Fortunately, there are various ways businesses of all sizes can invest more fully in their employees. Strategizing what works best is part of the value of benefit services a HR solution partner provides.
Restructured Compensation Based on Relocation
In addition to a proven monetary and time investment, what people expect from their compensation now is far more complex than it was even a year ago. For instance, with remote working as an indefinite solution, many people are relocating to less expensive areas. In addition, employers are giving up their expensive office spaces.
These changes are affecting budgets and salary allocations. Part of the benefit services a HR partner can provide is salary research and inflation trends in cities throughout the country and use data to make decisions regarding these trends. Furthermore, reconsidering compensation because of relocation coincides with the conversation surrounding the idea of equal pay for equal jobs.
With relocation, there may be time zone differences where expectation of a role may be altered. Two jobs at the same level may not be as comparable as before. This is one of several areas where employees are negotiating compensation to fulfill their preferred working conditions.
Money Talks, But Flexibility Is the Future
With so many moving parts shaping today’s workforce, companies must remain open and agile. Each position and employee requires a thoughtful look to weigh all factors playing a part in assigning compensation. It’s not only about money now. Structuring compensation means including a candidate’s freedom, flexibility, and building a future.
The world of recruiting has dramatically shifted and is continuously changing at a rapid pace. Working with a team of experts who understand the importance of building a compensation package with these things in mind is what’s going to help companies recruit and retain their best candidates.
It’s smart for businesses to allocate these types of responsibilities to a HR solution partner like ExtensisHR who can take on a company’s payroll and benefits, maintain compliance, and navigate compensation trends in a personalized way which makes sense for the company. This frees up time for leadership to focus on other areas of operation for the company and ensures they stay current with the changing market.
Investing in people and considering their current needs is only part of what’s shaping today’s workforce. In our latest webinar, our panel dives deeper into the compensation trends brokers should be considering and presenting to their clients as a HR solution partner.
Get valuable insider knowledge and more helpful tips on how to create and customize a successful compensation strategy. >> Tune in to our latest webinar to learn more.