Determining the right employee compensation from top to bottom is a complex equation.
Balancing the cost of human resources against the need to fill positions with the most productive and talented personnel is never simple. Get the calculations right, and you will attract, recruit and retain ideal employees. Get them wrong, and your bottom line will suffer.
Going it alone may not be the ideal way to set compensation levels. Often, calling in your accounting professionals can give you the edge by providing concrete numbers to work with. Here are some of the issues to consider.
- Employee Compensation is a Competitive Area. Even in a recovering economy, job postings bring in a wealth of applicants and resumes. That doesn’t mean that the applicants you see are the best available. If your compensation package is below par, you may not hear from the most qualified and motivated prospects. Being competitive in pay for equivalent positions is essential.
Productivity Is a Crucial Variable. For every position, from the executive suite to line workers, highly productive employees help to balance the cost/benefit equation. Attracting and retaining top talent with proven performance records is the key to maximum productivity. A competitive compensation package plays an important role in bringing in the most qualified candidates.- Compensation Isn’t Just About Salary. While wages and salaries are a primary consideration, other benefits also come into play when positions are open. Highly qualified applicants look closely at the total package and often make their decisions based on benefit package comparisons. Research benefits available from competitors and adjust your offerings as needed.
- Fine-Tune Expectations to Match Actual Needs. Before posting an opening, review the requirements to make sure they are in line with the compensation offered. Applicants make decisions based on what is expected as well as the salary range being offered. Unrealistic expectations for education, experience and other requirements for the offered pay range can limit your choices.
- Intangible Benefits Can Make the Difference. Competition for the best-qualified prospects for any position can be fierce. Your compensation package is just one factor. Real advancement opportunities, a supportive company culture, recognition of life/work balance issues, and other non-financial benefits can give you the edge with prospective hires.
- Take a Holistic Approach to Compensation. Setting pay levels and benefit packages is a complex process. Bring management, production, HR and accounting together to create a balanced compensation strategy. Consult with experts to understand current compensation trends and find creative ways to improve productivity through ideal staffing.
Compensation Packages Should Be Bottom Line Decisions
Few things affect profitability more than employee pay and benefits. Whenever these issues are under consideration, their effect on company financials can’t be understated.
When setting or changing overall or partial compensation levels, analysis and projection of the impact of your decisions are essential. We’d be happy to help you at every stage of this critical process.
