Compensation & Benefits Studies

The competitive edge it can bring to you and your company

In a 2010 poll conducted by MSNBC, 50% of people in the workforce plan on looking for new jobs once our nations battered economy recovers. That statistic translates to: half of your company is a passive job seeker. Organizations know all too well about the additional stresses and costs associated with recruitment and hiring, not to mention the training expenses and productivity losses incurred. So, doesnt it make sense to do all we can to retain our quality employees, rather than watch them leave and take their expertise to a competitor? Employees become loyal to an organization for many reasons and their job satisfaction is a critical component. Job satisfaction is the all-encompassing term that we strive to achieve for each and every employee but, more often than not, certain attributes slip through the cracks. Employees, especially the newest group entering the work force, Millenials, are looking for many things. Among these are: work/life balance, a comfortable professional atmosphere, an appealing company culture, rational bosses, friendly coworkers, and a competitive salary and benets package. Armed with an endless list of employee wants, one universal factor that ultimately becomes an important aspect in any job search is a fair and competitive compensation and benets package. How can we ensure this and more importantly, get the employee to see the same light? In short, the answer is a Compensation & Benefits Study. These can come from multiple reputable sources, like your industry association, government agencies, various market research firms, etc. The information uncovered in these studies will be one of your most potent weapons in the constant struggle to hire/retain top talent and quality employees. Keeping current on compensation and benets trends and knowing what your primary competitors are offering will help break down perceptions with cold hard facts. In a 2008 Gallup Poll, 51% of workers felt underpaid, 46% thought their pay was correct, and only 3% admitted to being overpaid. Assuming that the 3% are the Mark Zuckerbergs, Larry Ellissons, and Donald Trumps of this world, lets focus on the 51% feeling underpaid, which correlates nicely to the 50% of the workforce that is constantly considering a move to a new company. Understanding who and why these employees feel this way will ultimately help you reach your goal of retaining these employees and fostering healthy compensation satisfaction levels. Lets take a look at a further breakdown of those surveyed.

Percent Feeling Underpaid

Percent Feeling Underpaid

Paid under $75k

62%

Women

55%

Paid $75k or more

38%

Men

47%

0%

20%

40%

60%

80%

0% 10% 20% 30% 40% 50% 60% 70%

The statistics presented above dont tell you exactly who in your rm is looking to leave but it does give you an idea of which groups to pay a little more attention to. If we could put a little more context into these statistics, like ensuring only employees in your industry respond to the survey, one could see that the charts would be significantly more meaningful to your organization. Information like this, along with specic compensation ranges for employees at various levels, can be uncovered through industry level Compensation and Benets Studies. They answer the questions: How do our competitors compensate specific job titles? What is the normal salary and bonus range for this employee in our region/revenue category/company size? What benets do most companies offer? Are there any new benefits we need to consider adding? What amount is our industry budgeting for salary increases next year? How much are companies contributing to their employees 401k plans? What are the normal hourly wage ranges for specific part-time/hourly staff? What is the average turnover rate for certain positions in our industry? Knowing the answers to these questions and the many others that a Compensation & Benefits study can provide will keep your organization competitive in not only talent but in financial matters as well. Your bottom line is directly affected by the quality of your employees, so keeping them around for the long haul should be a goal that every organization strives to achieve.

Written by: Ian Santo Domingo Sr. Manager Veris Consulting, Inc. September 2011 2