When it comes to job retention strategies, pay and compensation make up a key part of the puzzle. Here we explore pay equity and culture.
Keeping your talent is one of the most pressing challenges facing business today, and job retention strategies are often linked to concepts like culture, compensation and talent mobility. We know that there are powerful psychological factors that influence motivation and engagement at work, but there are also "nut and bolt" pieces of compensation policy that make up a firm's strategy for keeping the best people.
Linking Salary and Retention
According to the ADP Research Institute (ADP RI) report, The Evolution of Work 2.0: The Me vs. We Mindset, 46% of the employees surveyed would consider a job at another company even if the job was compensated at the same rate or even slightly less. This boils down to the fact that in today's talent market compensation is just one piece of a much larger recruitment puzzle.
Finance leaders must understand how workers are motivated and ensure that salaries and other factors at least meet the minimum expectation threshold in order to keep top talent. Be transparent about growth and development opportunities, allowing workers to not only understand what's on the horizon in terms of careers, but that there's job security, equitable pay and a good work environment available.
Communicating Relative Pay Equity
Every employee has a different idea of their worth, and many managers are reluctant to have pay discussions with their workers. At the same time, Gallup reports that managers are responsible for a whopping 70 percent of the variance in an employee's engagement levels. Developing a culture that gives managers the tools and opportunities to have open discussions about compensation is a great way to ensure that workers and managers are on the same page about what constitutes a fair wage.
Some employers have gone so far as to publicly list their compensation structures so that anyone in the business can see the relative value of specific skills and competencies. Buffer is a good example of this, offering a bird's eye view into its compensation practices for anyone inside or outside the firm to see. By relying on a standard, public calculation to derive pay instead of more traditional methods like negotiation, each worker can feel like they're getting a fair shake when it comes to pay. This is especially true for minorities and female workers, because tactics like salary negotiation typically punish this group more than their counterparts, as the Harvard Business Review notes.
Employees Are Open to Other Jobs
When it comes down to it, the manager is the linchpin in this discussion. Great employee relations don't happen without managers equipped to have good discussions, whether around salary or development. People are usually open to other job opportunities. According to ADP RI, two-thirds of employees are actively looking, or open to a new job, which means employers need to be on the top of their game to keep these workers connected and engaged.
ADP RI's Evolution of Work 2.0 reports that employees are willing to switch their job for as little as a 16 percent raise. The number varies by region, but in almost every country, employers underestimate the amount of pay increase it would take for employees to consider other job opportunities. For instance, U.S. employees would be willing to accept another job for a 12.6 percent increase, but employers think it would take 14.3 percent to get someone to move. In reality, there's less friction here for making a job transition than employers are aware of, which could factor into the job retention strategies they put in place.
Finance leaders should understand some of the key motivational factors for their workers, have a handle on what global regions might need special attention or circumstances and stay in tune with their workforce's needs. This is best accomplished by partnering with HR on an engagement or satisfaction survey that provides insights into what drives the most value for the employee base. Once the data is in hand, the team can target any turnover or disengagement hot spots and ensure that any job retention strategies deliver value for the employees as well as the employer itself.