By Claudine Kapel
Signs of economic recovery represent welcome news – unless you’re worried that your top talent will jump ship as job openings become more plentiful.
Recent news reports offer cautious optimism regarding job growth. For example, the latest Bank of Canada’s Business Outlook Survey indicates 49 per cent of respondents expect to add jobs over the next 12 months. And a recent Right Management survey found 27 per cent of respondents were optimistic about increased hiring.
Many employers, however, are emerging from a period where their employment proposition received scant attention – if indeed it did not experience serious erosion through cost-cutting measures.
So now is the time to revisit what your organization has to offer, starting with your compensation programs. These represent the cornerstone of your employment offer and will shape your ability to attract and retain talent going forward.
Without a doubt, many organizations have been through a tough few years. And many have battle-scarred compensation programs that may have lost their way in the storm.
What has been happening with base pay in your organization? When was the last time you compared your pay levels to market practice? Ideally, you should conduct a market review every year, to ensure your internal pay practices align with your desired market positioning. And you should check how your base pay structure has been tracking market as well. If you’re seeing a lot of employees hovering near or at their range maximum, you may need to adjust the structure itself.
Chances are your internal pay levels haven’t drifted too far from market, even if your compensation budgets have been lean over the past few years. Many organizations are in the same boat.
But taking the time to take stock of where you are and where you’re going is critical because it enables you to get your bearings and to determine if any course corrections are required. You may find signs of internal disarray that need attention. Are there any concerns about how employees are positioned in their salary range? How do the pay rates of recent hires compare to those of longer-service employees? Are the any concerns about titling practices?
Pay wasn’t the focus of much discussion during the recent lean years – which for many were characterized by small or no budgets for salary increases and modest to non-existent bonus awards. But the times, they are a-changing.
When it comes to attracting and retaining talent, rocky pay practices won’t position you for success. To paraphrase the Cheshire cat, if you don’t know where you’re going, any road will do. By approaching compensation mindfully, you can help ensure your pay programs continue to deliver value.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com