Compensation Strategies To Attract, Retain Talent

03.23.2023
HR & Safety

Solving the labor shortage in Connecticut requires a renewed focus on compensation strategies.

Salary.com solutions consultant Ken Clemens told attendees at CBIA’s 2023 Human Resources Conference that there are some tactics employers used to attract new talent and upskill and retain the current workers.  

Citing a pulse survey from salary.com, Clemens [pictured above] said the amount of employers looking for workers is not decreasing.

“Right now, 63% of companies say it is more difficult to hire new employees, and 20% say they’re really struggling, finding it to be almost impossible,” Clemens said.

Attracting, Retaining Talent

In CBIA’s 2022 Survey of Connecticut Businesses, 85% of employers reported difficulty finding and/or retaining employees, with 39% saying the lack of skilled applicants is the greatest obstacle to growth.

If every unemployed person found a job in Connecticut today, there would still be 21,500 open positions.

“Right now, 63% of companies say it is more difficult to hire new employees, and 20% say they’re really struggling, finding it to be almost impossible.”

Salary.com’s Ken Clemens

Clemens said it is a difficult numbers gap to overcome in general. The challenge is compounded by the skills gap.

“It’s not just about getting people in the door, it’s about getting the right people, making sure they actually have the skills and competencies you need to do the jobs well.”

Reducing workforce training costs is one of CBIA’s 2023 Transform Connecticut policy solutions.

Career Progression

One of the top reasons employees leave jobs is not understanding their career progression, Clemens said.

He recommends giving employees a clear career path when they begin.

“If you have a skill and competency framework in place, this is going to give you that connective tissue, that roadmap from any job to any other job within the organization,” Clemens said.

Clements said employers should identify the specific skills gaps and plan for how to address them both now and in the future. 

“As technology develops, competitive requirements get more advanced, being able to map out and say this specifically is what we’re missing and this specifically is what we need to develop is going to be crucial too,” he said. 

Market Pricing

How do you attract these workers in a competitive market? Effective market pricing is critical to attracting and retaining workers, according to Clemens. 

“Benchmarking, understanding what your competitors and peers are paying for jobs, and understanding who those peers and competitors are,” he said.

While there are multiple ways to purchase compensation data, Clemens said formal compensation surveys have been the “gold standard” for compensation data for decades.

Companies who provide compensation data for these surveys get aggregate data on salaries in their sector in return. 

Companies who provide compensation data for these surveys get aggregate data on salaries in their sector in return. 

Another part of market pricing is understanding your competitors.

The most important information includes competitors’ location, industry, and company size.

Clemens suggests researching where new employees are coming from, where they go if they leave their jobs, and how this varies based on job function.

Remote Work

Clemens offered several strategies for how to pay workers who work in different geographic locations.

One solution is to pay employees the same amount no matter their location.

Another tactic is paying regionally. For example, paying employees who are located in the northeast the same and paying employees in the south the same.

Clemens cautioned that companies using either strategy risk overspending due to variations in average salaries across the country.

Clemens cautioned that companies using either strategy risk overspending due to variations in average salaries across the country.

His recommended strategy is a zoned approach, which targets specific areas—such as cities or rural areas—instead of a generalized region. 

He said the strategy is easier to administer and allows companies to be more targeted in their salaries.

Pay Equity

In a salary.com pulse survey, only one-third of HR professionals said any manager in the company could explain why they pay employees what they do.

“It’s so important to be able to explain to employees why they’re paid what they’re paid,” Clemens said.

“In an ideal situation, they don’t need to come and ask.”

Connecticut employers must disclose the salary range to applicants either upon request or before or at the time they offer the position.

“It’s so important to be able to explain to employees why they’re paid what they’re paid.”

Clemens

Clemens said 64% of organizations are experiencing increased pressure from employees and other job candidates to address pay equity.

“That’s outside of regulations. That’s outside of management mandates,” Clemens said.

“That’s coming from current employees and job candidates, where they’re saying this is a priority that’s been voiced to them too.”

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