The importance of compensation rates may seem obvious. Sure, we all know that employees who feel underpaid could take their skill set elsewhere. That could be a big problem. You have probably invested time and money to train your employees. Not only should salaries compensate for skills and level of effort, they need to make sense with the job market outside your company.
The reasons that employees might quit a company can be difficult to pin down. We’re all individuals and what is important to one may not be the same for the next employee. Job satisfaction reasons are changing. They now reflect a new generation who places importance on factors beyond salary. We’ve heard about company perks that range from free food to meditation rooms. However, the first thing that helps retention is a competitive salary.
Picture this: You receive quarterly stats on training numbers and realize that new employee training has spiked. That’s a bit of a concern because that training is not cheap. Now, you might look at why the trained employees left. This shows your workers are leaving primarily because the pay is higher somewhere else.
In hard-to-fill skill sets, the job recruiters are actively working to make their commissions. They poke around and find out what could entice someone to move companies. How do you counter that? First and foremost, make sure you understand if your employee compensation exceeds, meets, or lags the regional market.
A regional market comparison can be important because what may be a great wage in one area may not be in another. Occasionally companies set salaries across all their regionally diverse entities. If the wage is not competitive in all those areas, employees might leave and take that new experience elsewhere. Their training and experience increase their value. You would need to figure out what that gap is.
The ability to analyze the company’s compensation could be a key to understanding this problem. Employee Cycle now offers the ability to view your compensation rates right from the dashboard. This includes the ability to view it by categories such as
- Average Compensation
- Compensation by Role
- Compensation per Department
- Average Compensation per Employee
It’s a great place to start to make sure you can monitor all the factors that affect retaining your skilled workforce.