7 Ways to Increase Employee Retention: Pay

benefits as an hr retention strategy

In our employee retention series, we’ve talked about flexibility, employee growth, and diversity, equity, and inclusion (DEI). Now, let’s look at another topic that has a massive impact on attracting and retaining top talent: pay!

The Great Resignation and the impacts of an ongoing pandemic have long-lasting effects. As a result, employees are evaluating their personal and work lives and listing their non-negotiables. You’ll find that things like culture, work-life balance, and flexibility are increasingly important. But compensation remains a pivotal factor in choosing whether employees stay at a current job or look for new opportunities with better pay.

“Other outside factors may be at play as well,” said Lindsey Nichols, Nextep’s Vice President of Human Resources. “At Nextep, we’ve seen other companies, often located in high cost-of-living areas, attempt to recruit employees by offering higher salaries than we typically see in our lower cost-of-living location. As a result, this shift has prompted us to fine-tune our compensation strategy as an organization.”

A Pew Research Center study from February 2022 found that 63% of workers who quit a job in 2021 said low pay was why they left. Significantly, an average of 3.98 million workers quit their jobs each month in 2021, and similar trends continue into 2022. Now is therefore the time to take a serious look at your company’s compensation as a key part of your employee retention strategy.

A compensation review is a great retention tool to keep in your company’s tool belt. Let’s take a look at some general tips on how to go about using a compensation review to review employee pay at your company.

Who’s in charge?

Firstly, take the time to establish who will take charge of your company’s compensation review. Depending on the size of your company and how many employees you have, an individual could manage the project. Alternatively, you can put together a committee to handle it. Departments involved with company-wide compensation reviews are typically human resources, business operations, and finance.

Take the pulse of your company

Go right to the source! Ideally, you’re talking to departing employees about their reason(s) for leaving. If compensation factored into their departure, be bold and ask them what their new pay and job title will be. Use this information in conjunction with other data to help you make compensation decisions.

Also, conducting an anonymous employee survey may be part of your regular process. Include a question about employees’ satisfaction with pay. What are they telling you? Use that data to your advantage!

Gather market data

It takes a lot more than gut feelings to set competitive salaries at your company. Getting access to accurate and verified salary data from trusted sources will be critical in your compensation research. It’s crucial to understand precisely where your company falls in terms of pay – businesses conducting salary assessments typically pay labor research firms for access to verified salary information.

For example, Nextep uses Payscale to help us compare our salaries based on job title, experience, and location to ensure we’re offering pay that’s competitive in the current job market.

Since the market changes often, it’s essential to do these assessments regularly, at least annually. We have found that COVID, inflation, current market conditions, The Great Resignation, and the rapidly changing way people work have caused a big shift in salary data and expectations in the past year, for example.

Once you’ve obtained reliable salary data, your next big task is to spend time analyzing the data you’ve gathered. Compare your company’s pay against the verified salary data to identify gaps in employee compensation and use that information to develop salary ranges and benchmarks for each role within your organization.

Put the research into action

Now you have up-to-date salary ranges for your company, it’s time to put the research to good use! Firstly, compare your employees’ current pay against the new salary ranges you’ve created. Then, determine if anyone is underpaid or where you can increase compensation to be more competitive.

From here, you can work on matching employee salaries to market trends. Compare the two to ensure you’re offering the most competitive pay possible for your organization. This step will help you retain employees and stand out to potential candidates in the current job market.

Communicate

To sum up, being compensated fairly and competitively at work can go a long way to make your people feel valued and appreciated! Be transparent with your people. Let your employees know your company is working to monitor trends in the current job market and actively taking steps to ensure pay is as competitive as possible.

Attracting and retaining top talent is something we pride ourselves on at Nextep. We’d love to chat with you about how we can help your business conduct a compensation review! Our goal is to help you bring in the best and brightest talent and keep them around in today’s changing market.

Let’s talk so your company can join The Great Retention!

 

Want to learn more? Check out our other blogs in The Great Retention series!

DEI

Flexibility

Growth

Engagement

Benefits

 

Also on Nextep

Get ready for changes! As of July 1, 2024, a new wave of state laws are set to go into effect across the country. These updates impact everything from worker protections and minimum wage to important regulations for businesses. Whether you’re an employer, employee, or simply a resident staying informed, this article will guide you […]
Read more
A Game Changer for Employers The Federal Trade Commission (FTC) recently made a significant change regarding employers’ use of non-compete agreements. The final rule issued by the FTC prohibits the use of non-compete agreements for many workers, which is a departure from the longstanding practices of many companies. This decision is already facing legal challenges, […]
Read more
Key Points for Employers About the Latest Harassment Guidance The Equal Employment Opportunity Commission (EEOC) has recently updated its guidelines on workplace harassment enforcement. This was the EEOC’s first update in more than 30 years. The updates are intended to clarify and modernize existing standards. These changes take into account recent legal developments and the […]
Read more
What You Need to Know About PWFA The Equal Employment Opportunity Commission (EEOC) recently released the final regulations for the Pregnant Workers Fairness Act (PWFA). These regulations, taking effect on June 18, 2024, update the PWFA rules put into place in 2023 and significantly impact how employers with at least 15 employees accommodate workers with […]
Read more
When Addiction Strikes at Work The issue of addiction in the workplace presents a complex challenge for both employers and employees. The Americans with Disabilities Act (ADA) protects qualified individuals with disabilities, but active addiction itself isn’t necessarily covered. Here’s a breakdown of rights and responsibilities: Employee Rights Under the ADA Generally Not Covered: The […]
Read more
What is Considered “Reasonable”? What happens when an employee with a disability needs an adjustment to perform their job effectively? This is where reasonable accommodations come in. However, the question often arises: what exactly is considered “reasonable” under the Americans with Disabilities Act (ADA)? Striking a Balance The key is to find a balance between […]
Read more
It’s time for an ADA refresher! The Americans with Disabilities Act (ADA) is a cornerstone of civil rights legislation, ensuring equal employment opportunities for people with disabilities. As an employer, understanding your obligations under the ADA is crucial. Here’s a breakdown of the key points: What qualifies as a disability? The ADA defines a person […]
Read more
Forced to listen? Imagine this: Your boss calls a mandatory meeting. Instead of discussing work tasks, they spend the time telling you why you should support a political candidate or a particular religious view. That’s a captive audience meeting, and it’s becoming a hot-button issue. A captive audience meeting is a mandatory work meeting where […]
Read more
At some point during the election cycle, you may encounter employees wanting to display political propaganda at work.  This can range from flags and posters to social media posts and even conversations, and it can create a tense and uncomfortable atmosphere for colleagues with differing viewpoints. So, how do you maintain a respectful workplace while […]
Read more
As a presidential election year unfolds, employers must navigate the complex landscape of voting leave laws to uphold employees’ rights while ensuring compliance with state regulations. While federal law does not mandate time off to vote, many states have enacted specific provisions. Here’s what employers need to know to navigate this terrain effectively. Understanding State […]
Read more
An Employer’s Guide to Politics in the Workplace The current political climate can be divisive, and tension can easily spill over into the workplace. When employees hold vastly different political views, it can lead to arguments, hurt feelings, and a fractured work environment. So, what’s an employer’s responsibility when it comes to politics in the […]
Read more
Unpacking the Buzzword You’ve likely heard the term “quiet quitting,” conjuring images of disengaged workers coasting through their jobs. But before we jump on the bandwagon of criticism, let’s take a closer look at what this phenomenon actually means. At its core, quiet quitting describes employees fulfilling their job requirements without going the extra mile. […]
Read more

Download Our App


Download the Nextep Mobile App in Apple iOS or Google Play