Any small or middle market business must attract and retain qualified staff to remain competitive, but hiring and salary planning can be tricky. Here are a few tips to help you to better forecast hiring budgets and develop compensation packages that attract qualified candidates in the current multigenerational workforce.
Find Average Pay Rates
One of the first activities of salary planning is to find the national and regional average salaries for open positions in your business. The national Bureau of Labor Statistics (BLS) website has an Occupational Employment Statistics page that includes links to detailed information on careers arranged by occupation code or title, averages and ranges of career salaries nationally and state-by-state.
Who Works in Your Business?
Currently there are four different generations in the workforce, according to salary comparison and analysis firm Payscale. Take a look at your current employees as well as the potential ages of new hires based on the experience required for the positions you're looking to fill.
The existing and future staff of the American workforce today include the "Traditionalists" born before World War II; Baby boomers born 1946-1964; Generation X workers born 1965-1981; and Generation Y workers (millennials) born 1982-2002, according to Payscale. While there are exceptions, each generation of workers has differences in characteristics, experience and motivations that can impact salary planning for businesses.
Identify Compensation Priorities
What's important to each generation of workers? It's a key consideration. Baby boomers and the older Generation Xers generally are thinking about saving for retirement. They may be interested in a fixed salary, benefits package and flex-time work arrangements to fulfill family obligations or travel opportunities.
Millennials, on the other hand, are focused on how their careers will progress. They want to accumulate the tools, training and mentoring options to help them succeed in the long-term. They may also be more open to a lower fixed salary with a larger variable portion (e.g., bonus structure) tied to performance.
Match Compensation Structure to Roles Based on Cohort Characteristics
Use average regional pay rates as a starting point to set salaries and make adjustments based on the priorities of each generation. Be willing to adapt these generalizations for individuals that you especially want to hire.
Understanding how the multigenerational workforce impacts compensation may increase the accuracy of salary planning. For example, positions requiring extensive experience may attract more candidates in the Generation X or baby boomer generation, who prefer a fixed salary. Knowing this helps businesses forecast salaries and structure a position's compensation package to reflect priorities.
As with many aspects of running a business, salary planning is a fluid activity. However, having an idea of how to proceed may improve the likelihood of attracting suitable candidates for your open positions, and of keeping them for the long-term.
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