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 the low down on how to handle pay correctly. Should you pay your employees for working during lunch? Yes.  Easy answer! Right? Well, no. Though the simple answer is an emphatic yes, it’s a bit more nuanced.  The topic of lunch and compensable time can be tricky. There are many ways an employee could […]
Read more
An employee’s first day at a new job can set the tone for the working relationship going forward. In fact, according to research by Brandon Hall Group, organizations with a strong onboarding process can improve new hire retention by 82% and productivity by more than 70%. Though the employee may feel stressed or nervous, the […]
Read more
Your company policies and values are only as good as the leaders implementing them. Get your leadership team on board, make sure they’re living out your company values, and support them to ensure they get the help they need to lead well. “Half of workers who quit their jobs say they left because of their […]
Read more
…And what you should ask instead Say you’re recruiting top talent for your company and find a few excellent candidates. When it’s time for the job interview, you smile, shake hands (or wave hello over Zoom), and sit down for a productive conversation. Your first question is a softball to help warm them up: “Have […]
Read more
How often do you get the chance to expand beyond your current retention or recruiting strategies? It’s common for managers to get stuck in the daily work routine and overlook the growth opportunities their employees want. That neglect may mean a greater chance of talented employees leaving in the short run. Around 48% of employees […]
Read more
Could your employee handbook stand up to a lawsuit or EEOC claim? Here are six tricky areas that could mean trouble for your company. Landmine 1: A handbook that’s older than dirt When was the last time you reviewed your company’s employee handbook? If it’s been longer than a year, then it’s been too long.  […]
Read more
We all know the importance of regular physicals and check-ups, but when was the last time you checked in on your mental health? May is Mental Health Awareness month, serving as a good reminder of how crucial a healthy mind is in the overall map of our wellbeing. This list and infographic can get you […]
Read more
If you’ve made it to this blog on leadership training, chances are you’ve spent some time with us the last couple of months as we dove into turning The Great Resignation into The Great Retention.  So far, we’ve covered flexibility, DEI, employee growth, pay, employee engagement, and benefits. While each of these is important, when […]
Read more
It’s no surprise benefits are one of the top reasons for employees staying with a company or going elsewhere. The Society for Human Resource Management (SHRM) study shows that 36% of employees leave for better benefits. Employee retention can be daunting, but we’re here to break it down! Therefore, we’re talking today about benefits. We’ll look […]
Read more
Employee engagement is a crucial piece of the recruiting and retaining top talent puzzle. When it comes to employee engagement, few people in Nextep can speak more authoritatively on the subject than our very own Director of Happiness, Tracey Hixon. To help you get started, Tracey answers some questions about how to retain employees by […]
Read more
Now is the time for employers to carefully review any arbitration or employment agreements they have in place. On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (HR 4445).  In cases of sexual assault or harassment in the workplace, many employers ask employees to sign arbitration […]
Read more
How often do you get the chance to expand beyond your current retention or recruiting strategies? It’s common for managers to get stuck in the daily work routine and overlook the growth opportunities their employees want. That neglect may mean a greater chance of talented employees leaving in the short run. Around 48% of employees […]
Read more

Download Our App