Question: How can we hire top talent when we aren’t able to pay top dollar?
Answer: Highly talented individuals and people with skills that are highly sought after are generally able to command high salaries and generous benefits packages. However, many organizations find that, for various reasons, they are unable to provide the type of compensation packages necessary to recruit and retain such high flyers.
But that doesn’t necessarily mean top talent will always be out of their league and it isn’t worth trying to recruit such individuals.
Compensation structures in many organizations make it difficult to accommodate highly talented individuals. Organizations may have a total rewards philosophy that lags the market (at least with respect to certain components of the compensation mix), a policy against hiring someone beyond the midpoint of the salary scale or clearly defined salary ranges with maximums that make it difficult to hire top talent or highly experienced individuals.
While organizations should always try to remain externally competitive with respect to total rewards, it can be very difficult to accommodate such employees’ compensation requirements. Many smaller organizations find it difficult to pay top dollar.
Added to that, the pay in certain industries is lower even for the same type of work. For example, a lawyer in private practice is likely to earn considerably more than someone in an in-house counsel position. Similarly, consulting or investment banking tends to pay better than publishing or non-profit organizations.
Employers also need to ensure salary, benefits and bonuses are internally equitable vis-a-vis other positions and individuals within the organization. This is particularly important for pay equity compliance purposes and to avoid causing bad feelings and poor morale among employees. After all, people tend to get very upset if they find out another employee — especially a newcomer — is being paid substantially more to do the same type of work.
That’s not to say employers can’t make exemptions for special situations. For example, pay equity legislation in some jurisdictions allows employers to temporarily pay certain types of workers more to address special market situations.
It is also possible to have a job reclassified with expanded responsibilities or to create a job to accommodate a high-flying candidate.
But assuming it just isn’t possible to match an individual’s salary requirements, an alternative is to stress the other aspects of the employment value proposition that make up for a lower salary.
For example, depending on the industry and the organization in question, a more generous bonus, commission, benefits package or pension plan could help offset a salary shortfall. Similarly, more vacation time, a shorter workweek, the ability to earn paid overtime or work from home, or enhanced work-life balance could form part of the employment value proposition.
It may also be possible to provide specific benefits to an individual in lieu of a higher salary as a way of encouraging her to accept the company’s offer.
Such perks could include a signing bonus, relocation assistance, an additional week of vacation, an expanded job title, a company car or the ability to work on high-profile or interesting projects.
Some organizations, by their very nature, can afford to pay employees a little less just because their employer brand is so good. For example, some people might be willing to work for lower pay if given the chance to work for a highly prestigious company such as Google, Apple, IBM or Procter & Gamble.
Having such companies on a resumé can boost an individual’s career prospects and those organizations are frequently known to provide excellent training and development opportunities to employees.
But even if someone has an impeccable resumé, impressive accomplishments and has earned a high salary elsewhere, it doesn’t necessarily follow that she won’t work at your company for what you’re willing to pay. It could be that she is feeling stressed, burned out or is looking to take her foot off the gas pedal just a bit while her family is still young.
Money isn’t everything and many people would love to work for a company with a greater commitment to work-life balance, flexible hours and a less adversarial culture.
However, recruiters and HR practitioners need to make a compelling case to candidates explaining why they should work for a lower salary. Therefore, employers must clearly articulate the employment value proposition and explain the benefits of working there.
Brian Kreissl is the Toronto-based product development manager for Carswell’s human resources, OH&S, payroll and records retention products and solutions. For more information, visit www.carswell.com.
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