Changes to compensation, flexibility, bonuses among strategies to attract, retain workers
Employers are meeting the challenge of the labour shortage head on by making changes to their work and reward programs as they battle to attract, retain and engage workers, according to a Willis Towers Watson (WTW) report:
- 86 per cent are hiring employees at the higher end of salary ranges.
- 84 per cent are increasing flexibility in where employees work (such as home versus office) and how they work.
- 81 per cent are offering sign-on bonuses to attract talent.
- 65 per cent are using retention bonuses to keep employees, mostly by targeting such bonuses for managers (82 per cent) and professionals (80 per cent).
- 55 per cent are increasing training opportunities.
“Employers are leaving no stones unturned in their battle to find and keep talent,” says Lesli Jennings, North America leader for work, rewards and careers at WTW.
“While making enhancements to compensation programs can support employers’ immediate recruitment and retention efforts, employers recognize they will need to pull levers in addition to compensation and reinforce a connection to the overall employee experience.”
Half (50 per cent) of Canadian employers say they need more employees but lack the capacity to hire, according to a previous report.
Many employers are also looking at making adjustments to their salary budget, finds WTW’s survey of 884 organizations in North America, conducted between May 23 and June 16, 2022:
- 44 per cent are planning or considering boosting their current salary budgets, and 23 per cent already have.
- 46 per cent are planning or considering adjusting salary budgets throughout the year on an as-needed basis, and 22 per cent already have.
- 31 per cent are planning or considering making more frequent salary adjustments throughout the year, and seven per cent already have.
- 46 per cent are planning or considering adjusting salary ranges (such as minimums, midpoints and maximums) more aggressively, and 18 per cent already have.
Looking to 2023, U.S. companies are budgeting an overall average salary increase of 4.1 per cent for 2023, compared with the average actual 4.0 per cent increase in 2022, according to a previous report.
However, employers must act with caution when it comes to making these moves, warns Lori Wisper, leader for work and rewards global solutions, WTW.
“While talent challenges may seem especially acute now, employers must consider the long-term implications of their actions, particularly around the sources of funding for higher compensation and concerns over internal equity between rewards for new hires and rewards for employees of longer standing,” she says.
Salary compression is a real issue for many employers, and this will continue with hiring employees in the higher salary range, she says.
“Employers can take actions to address these concerns, such as refining their overall compensation philosophy, raising salary ranges and reviewing — or rethinking — their strategy on how work gets done and rewarded.”
But there are non-salary-related ways that employers can adapt to the dynamics at play in today's talent market, says Domini Clark, founder and CEO of Blackmere Consulting, in a Forbes article:
- Personalize the candidate experience.
- Cast a wide net and then screen the pool.
- Streamline hiring and onboarding.
- Offer flexibility, compassion and understanding from supervisors, and wellness benefits.
- Build a pool of potential candidates before a need opens.