Even if you launched your business a few short years ago, the way your business operates today may look very different than when you first opened for business. Massive changes in the way employees perceive their working lives, rapid technology enhancements, and changing attitudes in general about where work can and should take place all point to the need for businesses to evolve compensation strategies to keep pace with expectations and needs.
The Ever-Changing World of Work
Work environments are always changing, but the last couple of years have been extraordinary when it comes to an evolving business work culture. Remote work, gig economy and freelance employees, and a general shift in the way employees prioritize work in their overall lives means employers must develop compensation strategies that align with evolving work environments.
What Today’s Employees Want (and Demand)
At the top of most employees’ priority lists is flexibility. Having the freedom to balance both professional and personal life is no longer a “nice to have” benefit. Companies that remain tethered to the proverbial time clock have found themselves lacking in applicants willing to work under old-school work conditions. On the other hand, employers willing to accommodate remote work options, hybrid solutions, flexible hours and even compressed work weeks find themselves well ahead when it comes to attracting and retaining top talent.
Total Rewards Mean More than Ever Before (Life is Short)
Although salary or wages are always an important factor of any employees’ compensation package, today’s evolving work environment illustrates just how important other benefits can be to prospective and current employees. We’ve already mentioned flexibility, and you can add to that list things like professional development, a positive work environment, flexible benefits options around healthcare and retirement, and a focus on community giving and volunteerism. Today’s employees demand fair pay and a whole lot more, all with the goal of keeping work and life rewarding, and in the proper balance.
What Gets Measured Gets Managed
Another aspect of today’s working world that continues to evolve is around the importance of collecting and having access to meaningful data to make strategic business decisions. When it comes to compensation strategies, it is no longer adequate to make decisions based on “gut feelings” or previous tendencies. Examining industry benchmarks, tracking current market rates for given roles, and automating the tasks around data collection and management is rapidly becoming a necessary component of today’s successful business strategies.
Working All Across the Map
With remote work and the ability for distributed teams to work anytime from anywhere comes the need to consider geography as a basis for compensation adjustments. For example the cost of living for employees working in Los Angeles will be very different from those based in lower-cost areas. Salary ranges may need to be adjusted based on where an employee lives, not just on the role being performed.
Communication was Important Then, But More Important Now
A monthly employee newsletter may have fit the need a few years ago, but today’s employees need and demand ongoing and transparent communication. Nowhere is this expectation more important than when it comes to their pay and compensation. Clearly communicate your compensation strategy, including how salaries are determined, the components of the total rewards package, and the rationale behind any changes. Transparent communication helps employees understand their worth and motivates them to perform at their best.
One thing that is certain is that today’s work environment isn’t done changing. Your compensation strategy should also not be considered a “set it and forget it” part of your business strategy. Continuing to change to meet employees’ needs and expectations will ensure your business can survive and thrive not just now, but well into the future. Regularly gather employee feedback, stay attuned to market trends, monitor employee retention, gather statistics around recruitment and performance.
Admittedly, it is a lot to keep on top of and the spreadsheets you once relied on to stay informed simply aren’t designed to keep up with the pace of this kind of change. Remember those technology enhancements we mentioned as a part of today’s rapidly changing business environment?
It’s time to take advantage of those technology resources that can help your business thrive in the wake of continual and rapid change. If you are ready to learn more about digital compensation management solutions that provide real-time access to the kind of data that drives strategic growth, CompLogix would welcome your questions. Contact us for a no-obligation demo!