Upward pressure seems to be the inevitable trend when it comes to employee compensation, especially in our current environment where wages have increased 4.5 percent — the fastest pace since 1983. But even historically, after all, the vast majority of employees expected to receive pay raises every year, according to Randstad's research — if not, they'd seek opportunities elsewhere. So the link between compensation and employee turnover is pretty much set in stone at this point, right?
Not so fast. On the one hand, a recent survey of employees who recently left their jobs found that pay was cited lower on the list behind more prominent reasons like work-life balance, well-being and workplace flexibility. On the other, “attractive salary and benefits” remains the number-one reason employees choose to work for a given employer, according to our recent Randstad Employer Brand Research report.
All of which suggests it’s high time to revisit the old compensation conundrum. With salary numbers continually in a state of flux — and so much at stake — here’s how to strategically leverage smart tools that are already at your disposal.
start with up-to-date data
First things first: Employee compensation isn’t a black box. Not every company currently makes data in this area a matter of public knowledge, to be sure, but that hardly means you’re at a loss for resources or insights.
Far from it.
For starters, Randstad’s salary guide covers the majority of key roles in your market and field. It’s the perfect place to start researching competitive employee compensation rates. (Don’t forget about employee perks and benefits, too!)
Beyond that, you can always leverage the latest intel on salary guide data and employee compensation levels — in your industry and in your market — using a free online salary calculator. How to interpret the results?
Easy! Just think of whatever you see as a baseline. Use it as a barometer and adjust your compensation packages accordingly.
But when it comes to employee compensation, as we’ll soon see, it isn’t just the obvious, dollars-and-cents stuff that counts. In fact, related decisions that employers are making right now could heavily influence talent outcomes through year-end 2022 and beyond.
think about the specific preferences of your candidates
What’s your return-to-work plan at this point? Fully onsite? Hybrid? A little bit of both?
Before you answer, take into account the following two surprising findings from recent research into employee preferences — because, clearly, these should inform your approach to talent acquisition as you ramp up for the next normal:
- Interestingly, a significant share of college students and recent grads — roughly 64 percent, that is — say they would prefer working in person and onsite on a full-time basis, according to one poll. Only two percent, by comparison, say they want to work remotely full time.
- How does that compare with the rest of the workforce? Forget about it. Among U.S. employees of all ages, a meager 17 percent say they want to go back to the office full time. That’s a pretty major discrepancy, and one you should absolutely take into account.
The takeaway seems to be obvious: Younger candidates, the best educated among them, are leaning toward more traditional, physically collocated worksites at the moment. Why, exactly, that might be the case remains a matter of speculation for now. But it is worth reflecting on the fact that younger workers are much more likely than older peers to live with roommates (or even with their parents), which increases the likelihood of distractions.
On the other hand, if the candidates you’re currently targeting don’t fit the above mold, you should think about what kinds of alternative work arrangements you can offer them. You might be surprised — doing so just might influence hiring outcomes, as well as your bottom line.
On top of that, of course, offering the latest and greatest employee perks and benefits should be part of your game plan, too.
upskill or reskill for the win
The potential upside of upskilling or reskilling initiatives are almost impossible to overstate. According to a survey from McKinsey, for example, 87 percent of organizations are either experiencing skills gaps right now or expect to experience them in the next few years. What’s more, nearly all respondents in McKinsey’s survey said that closing those skill gaps was a clear priority for their companies.
Be that as it may, however, misalignments around upskilling and reskilling remain endemic, particularly among members of the executive suite. The following stats are a case in point:
- A full 78 percent of employees say that they are capable of — and ready to — rapidly upskill or reskill today. In a similar vein, one survey of 22,000 employees, nearly the same percentage (77%) indicated that they are willing to upskill in order to improve their career opportunities.
- Yet, at the same time, if you ask your average CEO or human capital leader, things look a little bit different. In their minds, the above is true of less than half of the existing workforce. Ouch!
Perhaps what’s most interesting, however, is that misalignments like the above appear to be on the wane. In fact, according to the Randstad Sourceright 2022 Talent Trends report, 75 percent of human capital and C-suite leaders believed reskilling was “very” or “somewhat” effective in mitigating talent scarcity. Given the unprecedented levels of talent mobility we’ve seen of late — together with the phenomenon of employees quitting in droves (what many observers are calling “the great resignation”) — that is indeed welcome news.
Whatever the case may be at your organization, at any rate, it’s clear that upskilling and reskilling initiatives are another area where you can offset any lingering concerns about compensation levels — and even level up your employer brand, to boot.
key takeaways
As we continue to transition into new ways of working — and with so much still in flux — landing today’s top candidates isn’t about to get any easier.
However, you aren’t powerless to move the needle on key hiring outcomes. And while you may be (quite understandably) concerned about ensuring you get employee compensation right, it certainly isn’t the only lever at your disposal. Think about your onboarding and workforce models, together with various upskilling and reskilling opportunities, and you should be well positioned to deliver on your human capital goals.
In the interim, you can head back to Randstad’s Business Insights page for more tips. Or simply let us know how we can help by contacting the experts at Randstad today — someone from our team will be sure to reach out.