There was a time when compensation and benefits were relatively simple and straightforward. Companies provided wages in exchange for employee time and effort, and some sweetened the deal with insurance benefits such as health, life, and long-term disability. Over time, the competition to attract and retain a dedicated, productive workforce has driven employers to rethink the perquisites (perks) they offer.
This reevaluation led many to adopt a Total Rewards strategy, and the changes in workforce management in recent years has made the concept of Total Rewards even more relevant.
A company’s culture – who it is and its values – plays a significant role in identifying the Total Rewards components that speak to an organization’s workforce and drive success, for both the business and individuals. Creativity is the key to a cutting edge Total Rewards program.
In this article, we will introduce the idea of Total Rewards and discuss how such a focus can shape and reinforce your culture.
Total Rewards is a Holistic Approach to Employee Recognition
Total Rewards takes a broader and more comprehensive view of compensation, extending beyond wages and health insurance, to address all facets of an employee’s life – work-related as well as personal.
The approach recognizes that employees value more than a paycheck. They appreciate and in many instances expect companies to reward their service in ways that support all aspects of their lives with both direct and indirect compensation. Additionally, more workers are pressing employers to stand up as good corporate citizens and address current challenges facing society. One way many organizations address these concerns is with original Total Rewards designs.
Distinguishing Direct and Indirect Compensation
Total Rewards programs encompass both direct and indirect forms of compensation. Direct compensation refers to the cash paid to employees for the work they perform. Direct compensation seems straight forward, but there is more to this category than just base pay. Bonuses, commissions, stock options, profit sharing, and other monetary earnings fall into this category.
Indirect compensation is everything else.This broad concept is limited only by legal parameters, corporate budget, and the levers that drive an organization’s overall compensation strategy. Some standard perks that fall under this umbrella include health insurance, paid time off, and retirement plans (pension and 401(k)), but any non-monetary “extra” conferred is an indirect benefit.
The Flexibility of Indirect Benefits
In recent years, we have seen an explosion in the innovative ways companies attract, retain, and recognize their employees. In the most effective programs, Total Rewards offerings mirror the company’s values, mission, and overall culture.
A company’s catalog of indirect benefits speaks volumes about who they are, where they are going, and how they want to get there. They inform applicants prior to the interview stage, thus attracting candidates who value the culture and direction of the organization. Once on board, indirect benefits greatly impact employee commitment and morale.
Examples of indirect benefits that extend beyond paid time off and insurance coverages include:
Flexible work schedules
Compressed workweeks (i.e., 4-day workweek)
Employee assistance programs supporting mental health needs
Wellness benefits, such as gym memberships
Child and elder care
Sabbaticals to pursue work and non-work related interests
Student loan repayment
This list could go on and on. Each organization needs to reflect on their unique situation and devise a comprehensive Total Rewards strategy that dovetails with their business goals and the characteristics of their employee population.
Building a Total Rewards Program Aligned with Your Company Goals, Culture, and Workforce
Whether updating your current program or migrating to a Total Rewards model, how you decide to appreciate and recognize your employees should tie back to your organization’s mission and values – what the company aims to accomplish in the world at large and how it appreciates and recognizes the people who help get it there.
By reflecting on these big picture themes, companies can then distill those drivers into actionable items. By identifying meaningful formal and informal offerings, employers can craft tangible Total Rewards strategies that support those goals and evidence their corporate cultures.
Balancing Corporate Interests and Employee Expectations
The better an organization understands who it is (or wants to be) and the traits that make its workforce unique, the more effectively it can integrate that knowledge into a dynamic Total Rewards design. To be successful, Total Rewards components must always align with corporate objectives and budgets, but they must also match the specific makeup of a company’s workforce.
What motivates manufacturing facility employees may not be successful in an office setting. Similarly, younger workforces may be focused on career pathing, education and development opportunities, wealth accumulation, and childcare alternatives, while seasoned workforces may be looking for assistance with elder care, college preparation for their high school aged children, and retirement planning and transitioning.
Synergies with Other Human Resources Initiatives
Total Rewards factors into a number of Human Resources policies, with indirect benefits being the backbone of many initiatives. Recruitment, performance management, recognition programs, and diversity, equity and inclusion are only a few of the HR programs that a strong Total Rewards approach enhances.
Here are some examples where Total Rewards adds value:
In addition to a competitive salary and bonus, unique and broader thinking indirect benefits may help with talent recruitment by differentiating your company from the competition
Targeted, indirect benefits, such as company cars for field sales representatives, may improve engagement and productivity as part of innovative recognition programs
Performance management programs utilizing unique and specific incentives may increase employee productivity and engagement by focusing on what motivates particular groups or individual employees
Ensuring equitable distribution and access to benefits reinforces a company’s commitment to value all employees equally and create a welcoming, comfortable, and innovative work environment
Flexible work arrangements, such as remote options or work sharing, may result in higher retention and engagement rates
While wages are always the starting point for compensation discussions, today, applicants and employees require broad rewards packages that recognize their financial needs, personal interests, and address important societal issues. This expectation places a value on indirect compensation as never before seen, and it is through an inventive application of indirect compensation that a company’s culture and values can shine through – not only to employees but the greater marketplace.
If you need assistance reviewing your existing compensation strategy and designing an effective Total Rewards program, we encourage you to contact us at RealHR. We welcome the opportunity to discuss your needs and help you reach your desired goals.
We are facing an interesting time in compensation. The events of 2020 and 2021 have left a mark on how both employers and employees view work. Many have changed course on what they believe is most important, resulting in chain of events: record breaking employee turnover and a scramble by leadership to curtail the surging storm of The Great Resignation. In this Astronology® we will review some of the factors in play with the current compensation upheaval. We also will discuss three suggestions employers can consider in order to successfully steer through these challenges.
The Current Global State
We must acknowledge that there is a lot happening in the world right now. Currently, the world is moving into a “new normal” where COVID-19 isn’t directly impacting our daily lives as much as in 2020. We are learning to “live with COVID.” Additionally, we are facing high inflation rates – the highest we’ve seen since 1981. With these high inflation rates comes the whispers of an incoming recession – a whisper that seems to be getting louder recently.
We also are in the midst of The Great Resignation – 4.3 million people quit their jobs in January 2022 alone. What are the biggest factors in why so many are leaving their jobs? According to a 2022 Ceridian Pulse survey, “Nearly half (46%) of those who reported looking for new employment said it was because they wanted better compensation, including higher salary and benefits, while another 33% seek more flexibility, such as remote work and flexible hours.”
We also must acknowledge the ongoing Eastern European conflict with Ukraine and Russia. Aside from the natural anxiety and stress from watching the news on this topic, both employees and employers are concerned about the global effects this conflict could have long-term.
In these turbulent times, it is important for employers to develop a plan to guide their organization through the storm.
Navigating Compensation Challenges in 2022: Three Tips
Focus on retaining current employees. As mentioned in our “Employee Recruitment and Retention” guide, before scavenging the talent pool for new people, be sure to take care of the current people within your organization! There’s no point in recruiting new team members if you can’t keep your current ones. In the big picture of organizational success, employee retention is important. Try to improve how you recognize your employees for their contributions. You can start by surveying them to see how you can optimize your total rewards offerings to better compensate them.
Offer more training and professional development opportunities to better leverage current talent. As mentioned in our“How to Create an Effective Performance Management Process” guide, providing improvement feedback through performance reviews is not enough. Employees are more willing to stay if they see your organization as a place where they have opportunities to build on their skills. Show your staff you really care about their professional growth by investing in training and professional development opportunities. Allocating a small portion of your budget to offer learning opportunities can help your current employees level up their skills, which can result in their ability to take on new responsibilities and / or move into management roles.
Embrace indirect compensation. Yes, proper and fair cash compensation will always be preferred. However, including moments of indirect compensation or employee recognition can have a positive impact. A blog post from Payscale explains, “A 2019 study found the average turnover rate for organizations with no benefits plan is 157 percent, while organizations that offer benefits (including standard health benefits, vision or dental insurance and life insurance, to name a few) saw a 138 percent decrease in turnover. Indirect compensation, when done thoughtfully and intentionally, benefits all employees, regardless of seniority, age, title or tenure.”
Some forms of indirect compensation to consider incorporating include the following:
Featuring Our Guest Speakers: Ed Probst, Jennifer Loftus, & Matthew Thompson
We have put together a panel of experts to help you navigate the issues you are facing regarding obtaining and keeping talent.
This panel discussion will cover:
– How you can become an Employer of choice
– How to ensure your pay rates are retaining employees and not driving them away
– Benchmarking benefits to become more competitive in your recruiting efforts
By: Susan KreegerI didn’t mean to upset or offend anyone!
These and similar retorts are frequent responses when someone is the focus of a discrimination or harassment complaint. Sometimes, the individual in question does not understand what they did wrong, and attempt to defend their actions by explaining that others misconstrued what took place.
Although the employee may be describing their state of mind accurately, that is not the measure of whether unlawful conduct occurred. Simply accepting this explanation does not address the complaining employee’s concerns nor fulfill the company’s obligations.
In this blog, we explore the following topics to help you understand these concepts and how they affect your workplace and HR initiatives:
Intent lies within the mind of the actor. It is solely from their point of view and may or may not be apparent to anyone but that person. Impact focuses on the feelings and reactions of those present when a person utters certain words or engages in particular conduct. How others receive a message is the impact – the effect of those actions.
Often intent and impact do not align.The individual speaking or acting may have the best intentions but that does not necessarily translate to those around them. In some instances, unconscious biases can lead good intentions to go awry.
If the message does not come across as planned or is misinterpreted, conflict can result. The reality is that someone may feel offended, degraded, or harassed. When an employee feels this way, they may believe they are the target of unlawful discrimination or harassment.
For example, a supervisor makes a point of explaining everything in detail to an employee for whom English is not their primary language. The supervisor just wants to help and make sure the employee is not at a disadvantage. However, the employee does not need the added explanation and views the supervisor’s actions as condescending and demeaning. They report the supervisor to HR.
How your organization responds when someone raises questionable behavior will inform employees about your level of commitment to maintaining a welcoming, positive workplace and set the stage for any legal action that may follow.
The Injured Party’s Perception Is What Matters
Many individuals accused of discrimination or harassment do not see themselves as malicious or trying to mistreat others, but their opinion of the situation does not determine when improper conduct occurred. Bad intent is not required if the end result is a hostile work environment or adverse employment action.
The law does apply a reasonable person standard when assessing if conduct rises to the level of legally actionable, but that does not mean that the recipient needs to accept unwelcome conduct just because others do. As long as the individual’s reaction to the comment or behavior is within reason, unlawful conduct may have taken place, warranting a company response.We were all just joking around!
Addressing Discrimination and Harassment in Your Workplace
Everyone perceives the world differently based on their unique backgrounds and experiences. To avoid miscommunication, we must sensitize ourselves to how others approach the world and understand that our actions have consequences – some positive, some negative.
Setting the Ground Rules
As an employer, you need to send the message that harassment, discrimination, and retaliation are not accepted in your workplace. Implementing thoughtful, well-designed policies and procedures is an important first step. Consistent application of your policies shows that the company will do the right thing and take corrective action if employees raise concerns.
Getting Employees Up to Speed
Communication, training, and modeling are critical to understanding and embracing anti-discrimination and harassment policies. Incorporating policies into your handbook, reviewing them when onboarding new hires, and periodically disseminating them company-wide are good practices. However, engaging, interactive training sessions may be the best way to reinforce this information. In fact, this type of training is required in certain states.
Whether or not mandated by the state or locality in which your organization has operations, a comprehensive engaging program is highly recommended. Effective training sessions focus not only on the legal implications of discriminatory conduct, but also the benefits of creating and maintaining a work environment that appreciates and values every employee’s contribution and unique talents. Modules that focus on unconscious bias are often incorporated when discussing these topics. No one looked upset!
Taking Action After an Incident
Even with all the right policies, programs, and training in place, situations will arise that need addressing. In addition to having a legal obligation to investigate these matters, it is the right thing for employers to do – for employee engagement, betterment of the organizational climate, and overall business success.
The procedures you have in place should provide employees, managers, and HR representatives with a clear roadmap for handling complaints. The key to reaching a fair and satisfactory resolution is a thorough and objective review process. Every employee involved must be treated with respect and have an opportunity to share their version of the events as well as any concerns they may have without fear of reprisals or retaliation.
Some employers have the resources within their organizations to conduct investigations, but many hire outside counsel or consulting firms. When you engage a third-party, you have the benefit of an objective, outsider’s view of the incident. Oh, c’mon. They are being overly sensitive!
How RealHR Solutions Can Help You Commit to a Welcoming Work Environment
If you are looking for ways to enhance your culture, improve employee communications, and avoid the problems that may arise when employee intent does not match the impact, RealHR has solutions. Our team of HR professionals has decades of combined HR expertise and experience developing policies, training programs, and conducting workplace investigations. Our goal is to help our clients create a positive, welcoming and productive workplace, but if complaints arise, we can help to address them promptly and fairly.
We do not market off-the-shelf solutions. Instead, we assess each company’s particular needs and design HR strategies and initiatives to address those exact concerns. When meeting with our HR professionals, we review your current situation and help you determine what makes sense for your business.
How loyal are your employees to your organization? As you consider this question, a few employees might stand out in your mind for their dedication to your nonprofit’s cause or their above-and-beyond contributions to a recent project for your business. But in reality, employee loyalty is a difficult thing to measure and quantify.
That isn’t to say there haven’t been attempts to measure employee loyalty. In 2018, management and consulting firm West Monroe found that 82 percent of employees have a high sense of loyalty to their employers. However, they also found the following:
45% of employees have applied to new jobs after a bad day at work
59% of employees would leave if they got a better offer from another organization
What does this all mean? Employee loyalty is volatile. Similar to a tropical plant that requires exact amounts of water, careful fertilization, specific stretches of time in the sunlight, and consistent pruning, employee loyalty is something you have to carefully nurture.
One current, large-scale threat to employee loyalty is a new trend called “The Great Resignation.” This refers to the massive amount of turnover the U.S. is currently seeing. According to the U.S. Bureau of Labor Statistics, 4.4 million employees quit their jobs in September 2021 alone. And The Great Resignation isn’t likely to end soon. Astron Solutions national director Jennifer Loftus recently discussed this topic with other HR experts in a Cerini and Associates webinar, predicting that The Great Resignation will likely continue for the nexttwo years.
A variety of things could be causing so many people to leave their jobs, including burnout from the pandemic and a realigning of personal priorities. But instead of deciphering the causes of The Great Resignation, your organization should focus on mitigating its effects by increasing long-term loyalty among your employees.
In this article, we’ll give you the information you need to understand what employee loyalty is and how to create it in your workplace. We’ll cover the following:
Are you ready to start taking action to improve your employees’ loyalty to your organization and its work? Let’s jump right in!
Employee Loyalty: FAQs
A number of questions can arise when discussing employee loyalty. Let’s tackle a few of these to help you cultivate loyalty among your workers.What is employee loyalty?
Employee loyalty is the idea that employees at your organization are genuinely invested in your organization and its work because they believe in it and want to see it move forward. Loyal employees view your organization as the best place for them to work.Why is employee loyalty important?
Employee loyalty is important because it affects overall employee satisfaction and retention. If an employee is loyal to your organization and is satisfied with their job and compensation, they will be much more likely to continue working at your organization in the long run.What does a loyal employee look like?
There is no comprehensive checklist for determining whether an individual employee is loyal to your organization or not. But loyal employees do have some key qualities, many of which are easy to identify. They come to work on time, complete their work, and participate in company culture. But there are also some characteristics that make a loyal employee stand out from the crowd.
A loyal employee is truly invested in your organization’s work. You may have heard these employees described as “engaged.” They see the bigger picture of your work or mission, instead of just focusing on the day-to-day. This is often reflected in their efforts to improve themselves in their current roles or take advantage of career development opportunities. A loyal employee helps brainstorm ideas that will benefit your organization as a whole and gives honest feedback about their experience because they want to make your organization a better place to work. They also accept final decisions that come from the top and run with them.
Loyal employees also have boundaries. They don’t sacrifice their health, personal endeavors, or time with loved ones for your organization. They take their vacation time, use their sick days, and are better workers because of it.
How do you improve employee loyalty?
You can’t improve loyalty at your organization overnight. Much like a relationship with a donor or client, loyalty has to be cultivated over time, and that effort can take many different forms. In the sections below, we’ll give you actionable strategies for improving employee loyalty.
What employee loyalty means and looks like will vary from organization to organization. Loyalty is a complex idea to define and measure, but there are some effective ways to make positive changes in your organization so you can foster loyalty among your workers. It all starts with what we call “the secret sauce.”
Employee Loyalty: The Secret Sauce
The reality of employee loyalty is that most organizations try to get their employees to truly care about the organization and their work and end up missing the mark. Why?
Because they aren’t applying the “secret sauce.”
This secret sauce comes from an idea David Turt and Todd Nordstrom shared in a 2019 Forbes article called “The Truth About Employee Loyalty, And 5 Things Every Leader Should Know”:
You, as the leader, can only control your loyalty to them. We’ve personally seen so many managers get wrapped up in trying to ‘fix’ employee behavior. That seems like the job of a boss. But, it’s not. As a leader your job is to focus on what you can do to bring the best out of people. If it’s not working, keep focusing on what you could do differently.
-David Turt and Todd Nordstrom
This is the secret sauce: realizing that you can’t control your employees’ feelings about their jobs or your organization. The only thing within your control is your ability to create a work environment in which employees thrive in their roles, causing them to feel loyal to your organization and you as a leader.
Organization leaders who realize they can’t force loyalty look at their employees and their organization differently. They see their employees as assets who need to be treated fairly and compensated in a way that communicates appreciation. These employers do everything in their power to ensure employees enjoy their jobs and have opportunities to learn and grow professionally. Then in return, employers like these get the dedication and investment they want to see from loyal employees.
Now that you know about the secret sauce of employee loyalty, you may be wondering what changes you need to make to your approach to apply the secret sauce and create an environment where employee loyalty can grow.
Employee Loyalty: 15 Tips for Positive Change
What do your employees need from you right now that can help them develop loyalty toward your organization? Check out these 15 tips for creating a workplace that employees will want to stay and thrive in.
Note that some of these tips may need to be modified depending on what your workplace currently looks like during the COVID-19 pandemic. Be sure to follow state and local guidelines and to modify these tips as needed.
1. Work with an HR consultant.
Does your organization have the human resources policies and processes in place to encourage employee engagement and long-term retention? In order for your employees to buy into your organization and its work, you may need to work with an HR consulting firm that can provide an objective third-party evaluation of your current strategies and help you to improve them.
To select an HR consultant for your organization, follow these steps:
Define your needs. Identify what you need from an HR consultant. This might include streamlining your performance management process, changing your approach to compensation, or improving how you find and hire job candidates. Your needs will help guide your search for a consultant.
Discuss with key stakeholders. Before you commit to any engagement with a consultant, make sure your team is on board with the idea of hiring outside help. This will be especially important if you’re working with a strict budget.
Outline your guidelines. Set your expectations for working with an HR consultant. Consider the budget you have, the expected start date, and the timeframe for the engagement.
Begin your research. Search the internet for candidates or reach out to professional connections for recommendations. Remember to consider whether or not you’re willing to work with someone remotely and to filter your options accordingly.
Draft an RFP. An RFP, or request for proposal, will detail your organization’s needs and expectations. When you submit an RFP to a consultant, they can use that context to draft a strategy for your organization, which will help you decide whether or not you want to work with them.
Compare the candidates. Once you’ve submitted your RFP to your chosen candidates and received their proposals, review the proposals and candidates with your leadership team.
Make your pick. After researching your top candidate and reviewing their references, reach out to them and start working together.
HR consultants can help you see the blind spots in your strategy for cultivating employee loyalty at your organization and help you determine what you need to change as an employer. Be open to your consultant’s ideas, but don’t be afraid to push back on or workshop the strategies they bring to the table, too.
2. Equip your employees with the best tools for their work.
Do your employees have the best tools available for their roles? For example, an employee might suggest that Slack or Trello could enhance workplace communication and project management. How do you respond? If you’re willing to try it out, this shows your employees that you care about their ideas to improve how they work.
Providing your employees with the best tools can require investing in technology or other resources you may be unfamiliar with. But letting your employees have more of a say in how they complete their work helps communicate your loyalty to them and receive their loyalty in return.
Plus, never underestimate the effect purchasing up-to-date tools and equipment (like new computer monitors or desk chairs) can have on morale!
3. Discuss retention openly.
Your efforts to retain your employees don’t have to be a secret. In fact, communicating to your employees that you want them to continue working for you can actually help your retention efforts. This will not only make them feel valued, but will also help both you and your employees speak up about what you need to change or keep doing to continue working together.
One of the best spaces for discussing retention is one-on-one meetings between managers and their direct reports. Because managers are in the best position to get to know their direct reports and be involved in their work, they are also in a great position to discuss potential retention risks. Here are some questions that can help guide managers when talking about retention:
What do you like about your job?
What do you dislike about your job?
Do you feel like your work is meaningful?
Do you feel you’re able to develop new skills and take advantage of professional development opportunities in your role?
Questions like these can help you proactively extinguish potential employee turnovers before they even have a chance to spark. You can also use retention surveys to gauge new employees’ first impressions of your organization, reasons that star employees stick around, and why employees leave, all of which can inform your strategy for cultivating employee loyalty.
4. Take a total rewards approach to compensation.
According to our guide to total rewards compensation, “a total rewards approach to compensation is the most viable method of keeping your employees satisfied, increasing retention rates, and growing your organization sustainably.”
This approach encourages employers to view compensation more holistically, offering not only direct compensation and benefits, but also things like:
Scheduling flexibility and PTO usage
Career development opportunities such as continuing education courses, professional association memberships, and relicensing or recertification opportunities
A total rewards approach to compensation can help you create the kind of internal culture where employees thrive and want to stay. This will encourage them to strive for constant improvement in their roles, boosting retention and loyalty all around.
5. Be transparent about everything.
Transparency is key to building trust and loyalty with your employees. Transparency ensures that both your and your employees’ expectations are clear and can be met. Whether you’re open about compensation or an upcoming merger, employees will appreciate it when you make an effort to keep them updated and involve them in big-picture organizational moves.
It’s also important to be transparent about the negatives. If your nonprofit loses a major source of funding or a client’s relationship with your company sours, employees will want to know. Instead of scaring them away, you’ll show them that your organization has high ethical standards and wants to collaborate with everyone to improve and move forward.
6. Set up an employee recognition program.
According to an Apollo Technical article on employee recognition, an employee who receives recognition for their work is 63% more likely to stay at their current job for the next three to six months. What does this mean for you? Frequent and thoughtful recognition is key for ensuring your employees are happy and productive in their roles, which can increase their feelings of loyalty toward your organization.
Here are a number of ways to recognize your employees:
Set up an incentive plan, encouraging individuals or teams to meet certain goals to earn a reward, like a gift card or an extra day of PTO.
Write thank-you notes for employees that go above and beyond.
Give star employees shoutouts in staff meetings or newsletters.
Select an employee of the month and give that employee extra perks for the month, like a reserved parking spot.
Throw parties or host special lunches or dinners for teams who go above and beyond.
Remember, employee recognition doesn’t have to break the bank. According to our article on low-cost employee recognition, “the point of employee recognition is to make the employee feel valued by the organization.” No matter your budget, you can find a way to incorporate recognition into your strategy for cultivating employee loyalty.
7. Provide management training.
Management training can help your employees—from those in entry-level positions all the way to those in top-level management roles—learn more about how your organization works and what it means to be a good boss. These opportunities can help employees who aspire to be in a management role and provide insight for others interested in learning more about why their boss makes the decisions they do.
Offer management training sessions to your employees in which you discuss how you run your organization and how managers fit into the organization’s hierarchy. Create spaces for open discussions about good management techniques, like active listening and providing feedback, so that both managers and their direct reports can get more out of their relationships with management.
Remember, teaching your employees what it means to be a great manager won’t mean much if you don’t live by what you talk about in training. Actively apply the advice you give in training to show your employees how to put it into action themselves.
8. Promote employee health.
Employees will feel more connected to your organization when your organization promotes healthy ways of living. Why? Because employees want to know that you see them as people, not just parts of an always-working machine. There are a variety of ways you can promote healthy living, including:
Offer a mental health stipend.
Hold daily or weekly workplace yoga, meditation, or stretching sessions.
Keep your breakroom stocked with fresh fruits, vegetables, and caffeine-free beverages.
Encourage teams to take walking meetings.
Enter teams of interested employees in fun runs or walk-a-thons.
Install standing or cycling desks.
Invite a sleep expert to present to your employees about getting the rest they need.
Host challenges to see which department can walk the most steps or drink the recommended amount of water every day for a certain period of time.
Show your employees that you care about them and their well-being by incorporating more health initiatives into their day-to-day tasks. They’ll be more satisfied and happy with their jobs, as they’ll feel like your organization is a place where they can both develop professionally and maintain or improve their mental, physical, and emotional health.
9. Facilitate social events.
Employees need friends at work to enjoy their jobs and want to stay with your organization. To create an environment where friendships can grow, host social events. These events can be big or small. For example, you might organize an after-work happy hour, take the office out for lunch, host a holiday party, or even set up an employee trip to an amusement park.
Ask your employees for suggestions and be sure to listen. They’ll let you know what social opportunities are the best fit for them, and they’ll love the chance to meet people from other departments and develop memories outside of their day-to-day work with each other.
10. Provide career development opportunities.
Another great way to increase your employees’ loyalty to your organization is to offer them career development opportunities. Career development opportunities are likely already part of your organization’s talent management process. But also thinking about them as something that employees want and need to feel more invested in their work can help your efforts to increase loyalty.
Here are some popular opportunities you can offer your employees:
Stretch Assignments: These are out-of-the-ordinary assignments that require employees to learn and develop a new skill.
Cross-Functional Teamwork: This gives employees the opportunity to work with a team or department they usually don’t get to interact with in the scope of their daily duties.
Continuing Ed Courses: Continuing education courses, especially those that offer continuing education credits, can give your employees the chance to learn from experts in their field.
Recertification/Relicensing Opportunities: If your industry requires employees to recertify or relicense, your organization can provide study materials and pay for the relicensing exams to encourage employees to keep their skills sharp.
Conferences and Webinars: Provide your employees with opportunities to network and mingle with people in their field, allowing them to develop professional relationships and keep up with new industry knowledge.
Association Memberships: Associations create a community of professionals within the same field and provide opportunities like networking, conferences, workshops, and social events to help your employees grow their professional networks.
Management Training: In-house management training can help your employees develop a stronger understanding of how your organization works, how they can get the most out of their relationships with their managers, and how they can work toward a management position.
No matter where your employees are in their professional lives, it’s always a good idea to promote continuous learning and improvement. Providing career development opportunities like these can help you develop a great reputation with your employees as you encourage them to learn and grow within your organization.
11. Focus on diversity and inclusion.
According to Glassdoor, 76% of employees and job seekers report that diversity is an important factor when they evaluate companies and jobs. Work with your organization’s top leaders to evaluate your Diversity, Equity, and Inclusion (DEI) efforts. You might need to take action to adopt fairer hiring practices or to revise your compensation approach.
Remember, it’s not enough to just talk about DEI. Your employees want to see you making real, positive changes in the workplace.
12. Empower employees to give back.
Employees love to see opportunities from their employers to give back to the community. Opportunities to donate or volunteer enrich employees’ lives, and they also boost your reputation in your local area. Here are some opportunities you might consider offering:
Donation Matching: One of the most popular ways for employees to give back is to donate to causes they care about. Try offering gift matching to help employees increase their donations’ impact. To learn more about the good that gift matching can do, check out 360MatchPro’s article on corporate giving and philanthropy.
Volunteer Grants:Volunteer grants are donations organizations make to nonprofits where their employees regularly volunteer. These grants encourage employees to volunteer more and can be a great boon to nonprofits.
Corporate Volunteer Days: When you organize a corporate volunteer day, you’re arranging for all of your employees to participate in a nonprofit’s cause for the day. Whether you’re building a new playground or tutoring school kids, your employees will find fulfillment in lending a helping hand on these designated days.
If giving back is something that your organization values, providing opportunities for employees to do the same communicates to them that your organization is consistent and has a genuine desire to do good. As you look for ways to help your employees make a difference in your community, you’ll likely notice an increase in dedication to your organization.
13. Show appreciation for the little things.
When it comes to recognizing your employees or communicating how appreciated they are, remember to thank them for the little things. An employee might clean the coffee pot, water the office plants, or take notes in a meeting without being asked. Be sure to tell them “thank you.” Those two words can go a long way in making your employee feel like they belong at your organization.
14. Change up the routine.
Sometimes the best thing you can do for your employees is to shake things up. A change in routine can be a lot of fun, relieve stress, and reset your team to be more productive. Try out one of these ideas:
Hosting a work retreat
Surprising your employees with catered breakfast or lunch
Bringing in therapy dogs for employees to interact with for an afternoon
Hosting meetings in different locations, like outside of your office building
Switching out office chairs for exercise balls for a day
Monotony can turn into a retention risk. By demonstrating that your organization works hard to make each day fresh and new, you can make a positive impression on your employees.
15. Listen to your employees’ feedback.
To feel invested in their work and loyal to your organization, employees need to know that when they give their managers feedback, suggestions, or ideas, they are being heard. Surveys are a great tool for getting feedback from your employees. When employees can remain anonymous, there’s less pressure to keep their ideas to themselves and more encouragement to share what’s on their minds.
To learn more about surveys and to choose survey questions that will help you get actionable feedback, we suggest working with an HR consultant. A consultant can help you design a survey, administer it, understand the survey responses, and implement positive changes to make your organization a better place to work.
Employee loyalty is complex, and your employees’ feelings about your organization can change on a regular basis. However, when you apply the “secret sauce” and work to demonstrate your loyalty to your employees by applying the tips we’ve discussed in this article, you’ll start to see more dedication to and investment in your organization’s work.
To get expert help with your efforts to cultivate employee loyalty, reach out to an HR consulting firm like Astron Solutions. Astron Solutions can provide you with the services and solutions you need to improve your employer brand and keep your organization moving forward.
Interested in learning more? Check out these additional resources:
Employee retention has never been as great a concern for employers as it is today.
Although retaining your talent has always been an important investment of time and resources, the unprecedented external conditions stemming from the COVID-19 pandemic have only amplified the challenges of retaining talent and highlighted the need to look at retention with a critical eye. If you want to improve your organization’s employee retention efforts, knowing how and where to get started is key.
How can you best position your organization to engage and retain employees in 2022 and beyond?
This guide will cover the essentials and our recommended steps for building a well-developed retention strategy.
Defining the Essentials: What is employee retention?
Employee retention refers to an organization’s ability to retain its employees over time and minimize employee turnover, whether voluntary or involuntary.
Your employee retention rate, which compares the number of retained employees at the start of a specific time period to how many of those original employees are still there at the end of the period, can be calculated with this formula:
(# of individual employees who remained employed for entire measurement period
# of employees at start of measurement period)
Calculating the turnover rate will complement the retention rate by showing the percentage of separations in the same period. Turnover rate is often defined as the number of separations divided by the average number of employees during that same time period, and it can be calculated as follows:
(# of separations during the measurement period
average # of employees during the measurement period)
Best practice would be to track on an annual basis your organization’s retention rate and turnover rate, and the reasons behind them, so that you can accurately measure progress as part of your retention plan.
Employee Retention Strategies: 5 Key Areas to Prioritize
What elements of an organization’s operations contribute to retention? What specific strategies can you use to deepen relationships with employees and reduce turnover? We break them down into five key categories:
1. Recruitment and Onboarding
Hiring and onboarding practices are your first opportunities to set the tone for your relationships with new employees, so they play an immediate role in driving retention.
Review and improve your employee recruitment, hiring, and onboarding practices to provide enriching experiences. New hires should feel that your organization is thoughtful, welcoming, and caring.
Eliminate bias from your recruiting process.
Live your values through the recruiting, hiring, and onboarding process to allow candidates to experience your organization and its culture.
Ensure that training is available and that the content is relevant and helps new hires get up to speed as quickly as is possible.
2. Employee Compensation
There is much discussion around the role of compensation in shaping the employer-employee relationship and impacting retention. While intangibles like your culture, management philosophy, and an immediate supervisor’s management style have an increasingly large impact on retention, compensation and benefits still also play important roles.
Offer salaries and wages at rates as competitive as possible for your organization.
Take a total rewards approach to compensation. This entails breaking compensation down into its direct components (salaries and bonuses) and indirect components (benefits, culture, work-life flexibility, management styles, etc.) so that you can take a more holistic view of your strategy as a whole.
Ensure pay equity across your organization. Work with compensation experts as needed to conduct pay equity audits, benchmark your strategies, and develop other compensation improvements. Show employees the steps you are taking to review, adjust, and manage your compensation strategies over time.
Help employees understand the steps you are taking over time to review, adjust, and manage your compensation strategies. Consider whether compensation will be tied to performance. This can be determined based on a number of factors.
Offer benefits packages that meet the needs of your employees, offer flexibility, and provide the greatest value, while at the same time watching employer and employee costs. Consider flexible spending accounts to meet the needs of the greatest number of employees.
Set reasonable expectations around workload and hours. Consider offering benefits related to mental health and/or PTO for personal days.
Genuinely recognize and express appreciation for employee accomplishments. Consider creating systems for leadership and peers to submit “bravos,” offering spot bonuses or prizes for major contributions, and building in recognition as an ongoing part of employee-manager conversations.
Offer learning and development opportunities, and regularly discuss career growth with employees. Only 29% of organizations have concrete development plans in place, but 68% of workers are willing to retrain and learn new skills.
Set individualized goals and plans of action during your performance management process, and support employees with the tools they need to achieve them.
4. Company Culture
Your organization’s culture and the workplace environment you foster can play major roles in employee engagement, well-being, and ultimately retention.
Actively foster a flexible, diverse, and inclusive culture. Encourage employees to get to know one another and understand each other’s roles and responsibilities.
Create open lines of communication across the organization. Provide transparency into the reasoning behind leadership decisions that impact employees.
Develop and communicate your diversity management efforts to reflect your commitment to diversity, equity, and inclusion (DEI) and to creating a culture of respect, equity, and belonging.
Offer flexible work arrangements to whatever degree you are able. The ability to work remotely full-time or on a hybrid schedule has become a significant driver for many employees seeking new jobs.
5. Organization and Management
How your organization structures its teams and manages employees can also directly impact its ability to retain talent. These elements should be periodically reviewed to ensure they are still delivering maximum value for the organization and employees.
Keep job descriptions up to date to accurately reflect your organization’s positions
Consider broadening your concept of employees’ roles by creating a matrix model that taps into employees’ skills rather than the jobs themselves. This has many advantages—it offers greater flexibility and learning opportunities to the employees and also provides many benefits to the employer.
Empower managers by offering the training needed to support your organization’s retention plan.
Emphasize goal-setting across all levels of your organization. Communicate organizational, team, and individual goals, track your progress, and celebrate wins.
Consider conducting an HR Assessment to review and evaluate the ways in which your HR practices may (or may not) be supporting your retention goals.
How to Improve Employee Retention: 7 Steps
To begin strategically improving your employee retention rate, we recommend following these core steps:
Calculate your current employee retention rate.
This will give you a starting point on which to build your plan. Refer back to the top of this article to review the retention formula.
Analyze and benchmark your retention data.
Review the current state of your retention efforts. For example, who specifically is leaving? Do most employees who resign do so within a particular amount of time/common tenure? When you conduct exit interviews, an important tool for understanding and managing retention, what if any trends emerge in their reasons for leaving?
Consider working with an HR consultant to benchmark your own retention data against that of other organizations in your industry.
Conduct an employee retention survey.
Work with your team and/or an HR consultant to create and administer an employee survey asking questions related to retention. Do employees feel engaged at work? Do they understand why certain decisions are made? Do they feel fairly compensated?
Next, review survey results. Do employee survey responses reveal particular areas that seem to be driving turnover? For instance, you may identify compensation, inclusion, and career development as key pain points for your employees. These areas of focus will anchor your strategy going forward.
Audit your current practices in relevant areas.
Conduct in-depth audits of your practices in the areas of focus that you identified. Consultants and other specialized partners can conduct thorough, impartial audits of your HR practices, compensation strategies, diversity initiatives, and more.
Use your employee survey data to help inform areas of focus for your audit.
The results of an effective audit will point you towards specific gaps and shortcomings that can be addressed to drive stronger retention results.
Set employee retention goals.
Based on exit interviews, the employee survey, and the results of your audit, set your employee retention goals and create a plan for accomplishing your goals. Plan for incremental changes to your retention rate and build in various deadlines to evaluate success. This will include creating improvement plans.
Develop improvement roadmaps and assign ownership.
Lay out plans for addressing the identified issues. Outline specific changes, how they will be developed and implemented, who will own which elements of the plan, timeframes, and any other necessary details.
Make sure that involved team members understand why and how their help will support the broader retention plan and goal.
Actively track and review progress.
Regularly check in with your teams as they progress through the improvement roadmaps. Have a plan in place for measuring the impact of all individual improvements and the broader retention initiative as a whole. As the pieces of your plan come together, remember to recognize and celebrate your teams’ achievements!
Why does employee retention matter?
There are a number of reasons why employee retention should be a priority for your organization. An effective retention strategy will result in:
Reduced turnover and associated costs.
Turnover drains your organization of talent, institutional knowledge, and money. Gartner estimates that a single departing employee costs an average organization $18,591, with recruiting and onboarding being costly expenditures of your organization’s time and resources.
Increased engagement and employee growth over time.
When employees stay engaged with your organization, they are more likely to grow into new roles, contribute to your culture, and drive greater results for your business.
An improved employer brand, which can help with recruitment.
Being known as an organization whose employees enjoy their work and stick around for the long-term is a major asset and can create a helpful flywheel effect in which your employee-focused brand helps attract and retain top talent over time.
Overall improvements to your bottomline.
Taken together, the benefits listed above result in better overall financial health and resilience for your organization. Money saved by reducing turnover can be more effectively allocated to push the business forward and drive even higher retention.
Employee Retention and the Great Resignation
It is difficult to ignore the massive impacts of what has been termed the “Great Resignation” on employee retention. This unprecedented surge in voluntary turnover is reshaping the U.S. labor landscape. A record 4.3 million Americans quit their jobs in August of 2021, followed by 4.4 million in September.
The pandemic’s immediate effects have in part catalyzed this turnover increase. However, it is crucial to note that the Great Resignation seems to be driven by a complex mix of economic, social, political, and demographic forces, not all of which are directly attributable to the pandemic:
Rising wages and employee expectations.Salaries and wages have been rising. Coupled with the current impact of inflation on take-home pay and the general atmosphere of the labor environment, many workers are looking for more flexible and higher-paying jobs.
Pandemic burnout. The pandemic has been a difficult time for employees, especially frontline workers and those whose work could not easily be taken online. Many employees are reevaluating their personal and professional priorities and are exploring new career options.
A perceived labor shortage driving competition for talent. With 10.4 million job openings recorded at the start of October 2021, recruitment is currently a challenge. This is for a complex range of reasons, but a perceived labor shortage is driving employers to compete more aggressively for talent.
Socioeconomic and educational factors. The Great Resignation has revealed what some consider to be another emerging labor crisis in the United States: gaps in workers’ technological skills that are necessary for many jobs in a digital economy. High and rising costs of higher education will likely exacerbate this issue over time.
Additionally, the Employee Retention Tax Credit that was instituted to help struggling businesses retain employees in 2020, has ended earlier than expected with the passage of the Infrastructure Investment and Jobs Act. Organizations taking advantage of this credit may now face additional challenges making up for the lost support.
Clearly, the Great Resignation is complex. The factors listed above mean that retaining employees is more important than ever before for the immediate and long-term health of organizations today.
Want to take a deeper dive? How can organizations respond to the Great Resignation? What actions can HR leaders take to more effectively manage change in a turbulent environment? Jill Krumholz, Co-Owner and Managing Director here at RealHR Solutions, discusses the topic with our friends Jennifer Loftus of Astron Solutions and Ken Cerini of Cerini & Associates in this free webinar:
Employee retention is driven by a complex range of factors but has never been as important for organizations, in all sectors and of all sizes, as it is today. Understanding these factors, the current labor landscape, and how it all comes into play in the unique context of your own organization are important and also can be very challenging.
HR experts can be invaluable partners as you work to improve your employee retention rate. RealHR Solutions is a leading provider of HR consultation and outsourced services. Our experience spans a wide set of HR practices that impact retention, including recruitment, employee coaching, compensation and benefits planning, and more. We can help your organization develop a comprehensive retention plan of action or dig deeper into the specific areas that need improvement through benchmarking and HR assessments.
Get in touch today to discuss your organization’s retention goals and needs. We will be happy to help!
And to learn more about driving results for your business through strategic internal improvements, keep exploring with these resources:
The cyber-attacks that make headlines are often aimed at large corporations and financial institutions with household names. The sad truth, however, is that no one is safe from cyber activity, including today’s nonprofit. In fact, a growing number of charitable organizations that engage in online fundraising and giving campaigns have discovered the hard way that cyber criminals don’t discriminate when targeting victims.
While ransomware and phishing pose a growing threat to all organizations, the following tips can help protect your agency or association from cyber-attacks, cybercrime, and online fraud.
Plan for Worst Case Scenarios
If someone orchestrates a cyber-attack against your nonprofit, it is important to be able to respond quickly. All organizations should have cyber protocols and testing in place. You should be systematically testing your business for cyber weaknesses and entry points, and if a hack or mistake shuts down a vital system, have a plan B. Find a workaround that allows you to keep as much of your business running as possible.
Assess Your Vulnerabilities
You might not always know the risks you and your employees are taking. Bringing in an independent contractor to audit your technology systems and processes is one way to get ahead of those risks. A contractor can uncover hidden dangers such as unpatched software, insecure processes, or compromised systems.
Be Mindful of Emails
Research has found that more than 90 percent of detected malware arrived via email. This is due to the number of ways email can be manipulated.
An employee might receive a seemingly innocent email attachment, only to discover it carries malicious software, known as malware. This malware could take down a single computer or your entire network. Emails can also contain links leading users to websites that automatically download malicious code onto their computers. This type of code cannot always be prevented using traditional antivirus software alone. If an employee’s email account gets broken into, a hacker can pose as a trusted sender and dupe you into sharing valuable information.
Train Your Employees to Detect Threats
Another reason email is such an effective way into an organization is that employees don’t always know what to look for and are not fully aware of the risks they are taking when they check their messages.
Phishing emails, which are messages sent by someone posing as a reputable sender, often have small details changed or contain odd phrasing. With good training, employees will know to ask questions, double-check procedures, and verify requests via other sources. One effective technique is to send test emails that can track whether employees click links or follow a direction contained in a message. If they do, then the system can display educational materials or you can follow up to make sure they understand their mistake.
Require Strong Procedures for Payments
When COVID-19 first emerged, many of the usual processes and procedures had to be reimagined. This created new opportunities for invoice fraud.
For example, after COVID-19 started, businesses and nonprofits saw an increased number of invoices sent via spoofed, disguised, or hacked email addresses. Cyber attackers who spent time observing workers were able to imitate language and processes perfectly. Due to this, it is recommended that employees be skeptical of all invoices and to have client, vendor, and bank phone numbers readily available in order to easily verify any payment or bank charge.
Use Strong Passwords
Passwords should be complex, but they don’t need to be hard to remember. Rather than pasting your passwords into a spreadsheet or writing them down, consider using a password manager with strong encryption. Password managers can assist with password protection, giving the ability to store encrypted passwords for multiple sites in a secure vault. These high-tech tools can keep hundreds of passwords safe and are easy to use.
While no system is foolproof, following the above cyber tips will go a long way towards safeguarding your nonprofit. If you experience any unusual requests or think you might be a victim of fraud, contact me at email@example.com or call me directly at 516-719-8759.
Michael Fleischer is Senior Vice President at SterlingRisk, one of the nation’s largest privately held insurance brokers. He brings over 35 years of insurance and risk management experience to his clients at SterlingRisk. Michael’s understanding of cyber insurance, claims, risk management, complex coverage issues, and carrier relationships enables him to develop and implement complete and comprehensive solutions to his clients’ exposures. To learn more about SterlingRisk, visit www.sterlingrisk.com.
As a direct result of the ongoing COVID-19 pandemic, 2022 finds us facing high inflation rates. We’ve seen prices rise 7% – in everything from cars and housing, to gas, food, and furniture. It is the largest 12 – month increase in inflation that we’ve seen in 40 years.According to CNBC, “Employers had it easy over the past decade. Inflation has lingered between 1% and 2%, while pay raises have increased between 2% and 3% during the same time.” This means employers have to adjust their compensation strategy in response. Additionally, while attempting to counteract the current inflation rates, we are still facing “The Great Resignation.” 4.3 million people quit their jobs in December 2021 alone.
How much will rising inflation and the Great Resignation influence compensation this year? How can employers balance employee expectations with employer interests and fiscal sustainability? Lastly, what strategies can employers use to create meaningful compensation packages? These questions are answered in this week’s Astronology®.
Inflation and The Great Resignation – Balancing Employee Expectations and Employer Interests
Like inflation, employee expectations are at an all-time high. The COVID-19 pandemic created a shift in priorities for most people. Employees want lots of things, including higher pay, more job flexibility, and better child care. Employers are responding to these priorities by reviewing and adjusting benefit options – specifically, including or adjusting remote work features.
In order to remain competitive in a hot market and to account for inflation, Willis Towers Watson anticipates employers paying an average 3.4% raise to their employees this year. Despite this expected increase in wages, inflation is still taking a toll on an employees’ “take – home pay.”
Recognizing this, employers need to focus on a total rewards strategy when deciding to use variable compensation to reward employees. Doing so will help an organization balance employees’ needs and expectations with the organization’s interests, budget, and plans for growth. The Society for Human Resources Management (SHRM) explains in a December 2021 article, “Variable-pay incentive bonuses, which are one-time cash payouts that do not affect base pay, are projected to significantly increase compared to last year, with 1 in 4 employers saying they will have an overall bonus pool more than 10 percent higher than last year…While the current labor market is driving some increases in pay, employers are concerned about economic uncertainty and therefore are looking to other vehicles such as incentive pay to reward and retain workers in this tight labor market.”
Sounds good. But is that all? What other strategies can employers take?
Four Strategies to Consider
Along with some form of variable compensation, here are four strategies that employers can consider to create an overall compensation strategy with a focus on total rewards:
Take a Segmented Approach: In order to address gaps in competitiveness, consider a segmented approach. Offer higher wages to both new staff and high – performing current employees in critical business segments. Another group to consider are those whose pay levels are below market rates. Now would be a great time to consider bringing their pay rates to the proper market rate (or even slightly above). In fact, an overall review of your organization’s compensation structure can elp you identify such weak areas. Astron Solutions has 23 years of experience helping organizations identify and address such issues. Why not request more information today?
Consider the Overall Employee Experience: Employees are burnt out and exhausted from the pandemic. As an employer or leader in employee experience now is the time to examine reasonable and impactful ways to support staff’s unmet needs. Adding resources that could help employees navigate pandemic – related burnout can be considered indirect compensation, contributing to an employee’s total rewards.
Be Transparent in Communicating Your Pay Strategy with Employees: In addition to providing supplemental benefits to round out an employee’s total rewards, equally important is communicating the total value of their employment. Aon noted in one of their blog posts, “Communicating total rewards is important; employees can be tempted to leave their employer for very little increase in actual salary and sometimes what you find is that they don’t appreciate the wider picture of how much their benefits are truly worth.” Employees that have access to a total reward statement have a transparent view of their overall package and thus will be motivated to stay. Move beyond traditional “boring” benefit communications and find ways to share the full reward.
When it comes to employee compensation, there are rarely any easy answers. This is true for organizations of all shapes and sizes—whether you’re scaling up your operations and experiencing employee retention issues or simply auditing and re-evaluating what you offer your employees.
The difficulty lies in the fact that compensation needs are ever-changing. In order to stay competitive and hire the best talent (and retain those employees), you have to keep an eye on the economy and the job market for similar positions. Plus, compensation needs can change over time. For example, schedule flexibility has become a top priority for employees due to the COVID-19 pandemic, and employers have had to adjust their compensation strategies to respond to that priority.
For many organizations, the best solution to compensation issues is to turn to the advice of a third-party expert—a compensation consultant. Investing in compensation consulting services can result in a stronger, more sustainable compensation strategy for your organization that can help you recruit and retain the best employees. But how do you get started?
In this guide to compensation consulting, we’ll answer this question by delving into the following:
Before investing in compensation consulting services, it’s critical that you explore your options. If you’re ready to learn more about what compensation consultants do and to begin researching various firms, this is the article for you! Let’s begin.
Why Your Approach To Employee Compensation Matters
Developing a clear strategy for how team members are compensated for their contributions is essential. It lays concrete groundwork for growth and reflects your organization’s values, mission, vision, and priorities in a more tangible way than just a mission statement. A strong compensation strategy gives your employees insight into why their contributions are valued, not just how much they’re valued.
This is even more important during times of uncertainty and crisis. With a global pandemic and mass social movements affecting your employees’ everyday lives, it’s worth it to take a closer look at how you compensate them for their contributions.
After all, the United States has seen a recent surge in turnover so historic it’s been termed “The Great Resignation.” According to SHRM, 4.5 million people resigned in November 2021 alone. Navigating The Great Resignation isn’t easy, but refreshing your approach to compensation is an effective way to strengthen your retention strategy during this time. Let’s explore the role that compensation consulting can play as you improve your compensation approach.
Compensation Consulting: What Does a Consultant Do?
Some organizations may hesitate to seek valuable assistance from a compensation consultant simply because they are unsure if a compensation consultant can provide value to their operations. The core role of a compensation consultant is to evaluate an organization’s current approach to compensation and suggest actionable and sustainable changes that can increase employee satisfaction and improve retention, all while helping the organization to remain as efficient as possible with its money.
There are a number of services a compensation consultant might provide to fulfill this role, including:
Evaluation and Development of Compensation Strategy and Policies: A compensation consultant will meet you where you’re at. They’ll take a look at how your organization has handled compensation so far and then help you design a strategy that will ensure compensation packages and policies are aligned with your larger organizational aims and strategies.
Job Evaluation Plan: Compensation consulting involves looking at individual roles as part of the organization as a whole. With a job evaluation plan, a compensation consultant can help you address each role’s relative value at your organization to ensure that every employee is compensated fairly.
External Market Analysis: Some organizations struggle to offer competitive pay when hiring, while others end up overspending on compensation. Through external market analysis, a consultant can help you find the middle-of-the-road solution that will get the top talent applying to your organization and keep you within your budget.
Creation of Incentive/Variable Compensation Programs: If employees at your organization receive commissions on sales or bonuses after a successful quarter, your compensation consultant can help you weave these more complex compensation methods into your larger strategy and create sustainable programs.
Performance Management: Organizations increasingly base compensation on performance. When you work with a compensation consultant, they can assist you in establishing performance-based pay and the policies associated with it.
Executive Compensation: With multiple elements to monitor and maintain (base salary, short-term and long-term incentives, perquisites, etc.) executive compensation is complex and, at times, controversial. Consultants help organizations take an approach to executive compensation that will satisfy your executives, employees, and other stakeholders.
Employee Communication: Employees value transparency, especially when it comes to compensation. The best compensation consultants will ensure you clearly lay out your new and improved strategy and create a plan to field questions and concerns.
We also recommend looking for a compensation consultant who can see beyond the hard numbers and take a total rewards approach to compensation. A total rewards approach means viewing how your organization compensates its employeescomprehensively.
This includes direct financial compensation and traditional benefits like insurance and retirement funds and also encompasses indirect compensation elements like flexibility, performance recognition, career development opportunities, and even internal culture. This holistic approach can lead to better employee performance and productivity and help your organization stand out to job candidates.
A total rewards approach and the services listed above are the strategies a compensation consultant can bring to the table to help you improve how your organization handles compensation. When hiring a compensation consultant, make sure you carefully consider the specific strategies they offer and how those strategies suit your specific needs.
Compensation Consulting: How to Hire a Consultant
Finding the right compensation consultant is more of a marathon than a sprint. There are a few steps you’ll need to take to make sure you’re getting the best assistance for your organization’s specific needs. These steps are:
Review your needs. The first thing you need to do once you’ve decided you want to work with a compensation consultant is to identify what you need help with. Does your organization need help with designing competitive executive compensation packages? Are you interested in offering new non-financial benefits to entry-level employees?
Discuss with your organization’s leaders. Your business or nonprofit leaders, HR team, and other top-level management should all be on the same page before you hire a consultant. This will not only help ensure you’re working within an agreed upon budget, but will also prepare everyone to work with your consultant to get the most out of your partnership with them.
Outline some guidelines. Your guidelines for your consultant should include a general budget, an estimated time frame for the partnership, and an estimated start date.
Begin your research. Don’t just go with the first compensation consultant you find on Google. You’ll need to thoroughly research your options! This can include getting recommendations from professional colleagues, reading through online lists of the top recommended firms (like the one below!), and checking out different consultants’ work experience.
Draft an RFP. RFP stands for request for proposal. When looking for a compensation consultant, you need to communicate your needs and guidelines to your consultant with this written document. This will give the consultant the information they need to decide if your organization could truly benefit from their services and give them material to build a proposal. Make sure you review this document with your organization’s leadership.
Compare the candidates. After doing thorough research, narrow down your potential consultants to a short list. Reach out to them, introduce yourself, and submit your RFP. Don’t forget to choose a date for them to submit their proposal to you.
Make your pick. Once you receive the completed proposals from your candidates, review them with your team. Then, you can pick your consultant and start working together!
Hiring a fundraising consultant requires due diligence. But like any big investment, the process of choosing the right compensation consulting expert will pay off in the end when you partner with the right person or firm. For a more comprehensive look at this process, check out our guide to hiring a compensation consultant.
Compensation Consulting: 14 Top Firms For Any Sector
Now that you’re familiar with the services a compensation consultant can provide to your organization and how to go about hiring one, it’s time to take a look at the top compensation consulting firms. Our list highlights experts who specialize in particular sectors or niches:
In each section, we’ll provide an overview of the firm’s compensation consulting services as well as more information on what makes them stand out in their space.
No matter what sector you’re in, there’s a compensation consulting firm that can bring relevant experience to your organization and help you develop the best possible strategy for long-term growth and retention. Let’s get started!
1. Astron Solutions – Best Full-Service Compensation Consulting Firm
Overview of Astron Solutions
Astron Solutions is a full-service human resources and employee compensation consulting firm that’s been helping businesses and nonprofit organizations for over 20 years.
We believe that simplifying compensation and human resources processes is the best way to keep your organization’s big picture goals in focus. Our fully customized approach has guided a wide range of organizations, helping them boost employee engagement and retention with optimized compensation strategies that address all of their employees’ and executives’ priorities.
Astron Solutions’ Top Employee Compensation Services
As a full-service compensation consulting firm, Astron Solutions has experience providing a wide range of employee compensation services for businesses and nonprofits. These include:
Total rewards consulting for base compensation strategy. We believe that a total rewards approach to compensation is the most effective way to create sustainable improvements for organizations. This is true if you’re rethinking your strategy for any reason, whether it’s due to the direct effects of recent disruptions or you want to combat ongoing retention and engagement issues.
Custom surveys that provide actionable information about total rewards needs in your organization. With customized surveys, we can collect and analyze data about industry trends and what your employees need and want from their compensation packages. Plus, you can rest assured that the collected data is secure, as we value confidentiality and ensure that our surveys meet legal antitrust requirements.
Specialized strategy development for executive and sales-based compensation. Executive and sales-based compensation can be particularly complex pieces of your broader strategies. Astron Solutions can walk you through developing and updating these programs, making sure to cater to the unique needs of your employees and culture.
Incentive and variable compensation program development to address specific goals. We can help you develop incentive and variable compensation plans that drive engagement for organizations of any size. By working closely with your team, we can create custom strategies tailored to your specific goals and constraints.
Policy development guidance to help HR departments effectively administer their new compensation programs. Once you’re done designing the best compensation strategy for your organization, you then have to implement it. When you partner with us, you receive guidance from professionals to ensure the new programs are successfully implemented and that all team members are on the same page now and down the line.
Why This Compensation Consulting Firm Stands Out
Few compensation consulting firms offer as wide a range of services to as wide a range of organizations as Astron Solutions.Astron Solutions is a leader in compensation consulting for small to mid-sized businesses and nonprofits. Oftentimes compensation consulting services (and their price tags) are targeted only towards large businesses, whereas Astron Solutions is equipped to help no matter your size.
Our customized approach is well-suited to tackling today’s unprecedented challenges, as well. From COVID-19-related challenges to internal cultural shifts and employee engagement issues, compensation strategy plays a significant role in shaping how your organization can adapt to change. We’ll help you focus on big picture goals while also adapting to the real-time challenges you face.
2. RealHR Solutions – Best Compensation Consulting Firm for Organizations Who Are Scaling Up
Overview of RealHR Solutions
RealHR Solutions was created in 2005 with the primary objective of helping organizations (both nonprofit and for-profit) meet their business goals.
This firm understands the growing pains that come when organizations scale up their operations and prioritizes efficiency and positive internal culture to help your organization become more competitive in the marketplace.
RealHR Solutions’ Top Services
RealHR Solutions offers a wide variety of solutions for growing organizations. Specific to compensation, they offer the following:
Compensation philosophy development
Compensation structure and practice design
Benchmarking for current external market compensation and benefits offerings
Why This Compensation Consulting Firm Stands Out
RealHR Solutions knows that there isn’t a one-size-fits-all solution for issues related to scaling up your organization’s operations. They emphasize understanding your starting point and providing solutions that truly fit your organization’s needs, whether that means taking a business partner role or helping with one-off projects.
This focus on unique, sustainable solutions catered to your organization helps RealHR Solutions stand out from the crowd as the compensation consulting firm for growing businesses and nonprofits.
They focus on offering independent and expert advice tailored to the needs of complex organizations, with an emphasis on analytics and strong standards of corporate governance. Compensation Advisory Partners works side-by-side with boards and management teams to develop custom strategies that fit within the large-scale internal structures that already exist in large businesses.
Compensation Advisory Partners’ Top Services
Compensation Advisory Partners offers a range of consulting services for corporations looking to refine their compensation strategies. Their top services include:
Compensation strategy development
Competitive market research and comparisons
Annual and long-term incentive plan design
Compensation committee organization and support
Why This Compensation Consulting Firm Stands Out
Compensation Advisory Partners’ focus on providing real-time and data-driven insights is particularly well-suited to the needs of large corporations. They regularly conduct proprietary studies on pay and design best practices, helping them better understand their clients’ spaces and emerging best practices.
These insights, coupled with their years of experience in the field, makes them a leader for large-scale businesses and multinational corporations that need to update their compensation programs.
4. FW Cook -Best Consulting for Executive Compensation Strategy
Overview of FW Cook
FW Cook is an executive compensation consulting firm that was founded in 1973. Their long history in the space gives them a real advantage when it comes to aligning compensation strategies with a client’s long-term goals.
Focused solely on executive compensation, the firm provides expert insights to the compensation committees, boards of directors, and management teams of large businesses.
FW Cook’s Top Employee Compensation Services
Although FW Cook only provides consultation for executive compensation, their offerings within this category are fairly broad. They include:
Executive compensation strategy development
Incentive and equity plan design
Non-employee board member compensation strategy
Executive severance and transaction assistance
Why This Compensation Consulting Firm Stands Out
FW Cook takes their role as a legacy leader in the space of executive compensation consulting seriously. They emphasize taking a fully independent and compliant approach while working cooperatively with large organizations to design programs that will address all their big-picture goals.
Their guidance has helped countless businesses refine their compensation strategies and adapt to changing economic environments for decades.
5. Johnson Associates – Best Financial Sector Compensation Consulting
Overview of Johnson Associates
With over 20 years of experience in its space, Johnson Associates is a leading compensation consulting firm for large and multi-national financial services firms.
Their deep knowledge of the financial sector gives this firm an edge in providing up-to-date recommendations tailored to the specific needs and cultures of their clients. They provide custom-designed compensation programs for a constantly changing industry.
Johnson Associates’ Top Employee Compensation Services
Johnson Associates offers a range of typical compensation consulting services in addition to more finance-centric offerings. These include:
Executive compensation program design and feedback
Emerging market trends and issues analysis
Annual, sales-based, and long-term incentive development
Stock option valuation and transaction oversight
Why This Compensation Consulting Firm Stands Out
There are plenty of top compensation consultants who provide expert advice and strategy recommendations to large businesses, but Johnson Associates have proven themselves a leader in a particularly fast-paced niche.
Their deep institutional knowledge of the financial sector, up-to-date insights into new trends and regulations, and sensitivity to market cycles make them a top choice for firms in this space.
6. Semler Brossy – Best Compensation Consulting for Transitional Periods
Overview of Semler Brossy
Semler Brossy is a leading consulting firm founded in 2001. Although they focus on executive compensation consulting, Semler Brossy offers a number of other business consulting services for larger businesses across a wide range of industries.
Semler Brossy’s services are particularly effective for organizations undergoing significant transitional periods, including mergers, acquisitions, IPOs, and executive successions. Their team’s guiding principle is “creating clarity from complexity,” meaning their insights can really shine during your most complicated times.
Semler Brossy’s Top Employee Compensation Services
Semler Brossy provides a wide range of consulting services for large businesses, including executive compensation guidance. These services include:
Full compensation strategy development
Compensation strategy for transaction and turnaround periods
Strategy development for CEO and executive successions
Specialized incentive design for key employee populations during transitions
Why This Compensation Consulting Firm Stands Out
Semler Brossy stands out among the crowded field of executive compensation consulting because their expertise is perfectly suited to help businesses through some of the most difficult periods they experience.
Plus, this consulting firm prioritizes building lasting relationships with their clients. With yearly check-ins and regularly-scheduled program assessments, Semler Brossy can support your organization through a complex transition and then actively help you stay prepared for the next one, too.
7. NFP Compensation Consulting – Best Compensation Consultants for Corporate Benefits
Overview of NFP Compensation Consulting
NFP is an insurance broker and consulting firm. Their consultants specialize in creating tailor-made benefit plans for employees and executives. They prioritize people first and stick to a high ethical standard.
Keeping your bottom line in mind, NFP has the experience that can help you with everything from designing retirement plans to staying on top of legal compliance.
NFP Compensation Consulting’s Top Services
NFP knows that managing all of the moving parts of HR is a huge challenge for many corporations. This is why they offer a wide variety of services, including:
Compensation market benchmarking and strategy design
Job description development, recruiting, and interviewing
Workplace compliance management
Call center services to field employees’ benefits questions and concerns
Why This Compensation Consulting Firm Stands Out
NFP Compensation Consulting stands out as a firm that can help your organization fill its HR gaps. If your in-house team is stretched thin, NFP can step in and help you keep moving forward.
With years of experience establishing best practices for organizations in a variety of industries, NFP can offer sound insights for clients working in any space.
8. Mercer – Best Compensation Consulting Firm for Global Executives
Overview of Mercer
Mercer is a global consulting firm that helps clients all over the world better manage their employees and streamline operations.
Global executive compensation can be tricky, as it involves salary, benefits, bonus programs, equity options, and much, much more. Mercer aims to ease those challenges. With expertise and connections to national and international resources, Mercer can help you plan an executive compensation strategy that is fair, motivating, and grows as your business does.
Mercer’s Top Employee Compensation Services
Mercer’s compensation consulting offerings are fairly comprehensive, with a variety of services for organizations and businesses of any size. Here are some of Mercer’s services:
Plans to attract, retain, and motivate executive employees
Alignment of executive pay with your organization’s unique strategic needs
Maintenance of compliance with regulatory and shareholder guidelines
Why This Compensation Consulting Firm Stands Out
Mercer stands out as a compensation consultant firm because they have special services dedicated to global benefits management. Compensating your executives can already be difficult to navigate, and when they’re all over the world, it’s that much harder.
By partnering with Mercer, you have access to their dedicated team of 9,000 experts specialized in executive compensation and the complexities of the global economy.
9. Alliant – Best For Health Benefits Design Consulting
Overview of Alliant
Alliant is a group made up of creative and experienced professionals who want to help other organizations and businesses navigate the current economic climate.
Alliant consultants know that benefits play an especially important role in driving retention and engagement, especially during times of change. They’ll assist your compensation efforts every step of the way, providing resources and technology to help you create and implement the best plans for your team.
Alliant’s Top Employee Compensation Services
Alliant understands that a compensation strategy with fully fleshed-out employee benefits generates long-term value for organizations of all sizes. That’s why they offer the following variety of consulting services:
Health and productivity program guidance and development
Benefits program administration
Industry benefits benchmarking
Why This Compensation Consulting Firm Stands Out
If your organization is struggling with designing your employee health benefits program, Alliant is the consultant firm to go to. Alliant understands that cultures that promote healthy lifestyles drive long-term employee value.
This firm will work with you to create customized health benefit programs based on your employees, culture, and budget. With Alliant’s highly experienced team of clinicians and wellness consultants on your side, designing your health benefits will be a breeze.
10. Pearl Meyer & Partners – Best Compensation Consultants for High-Growth Startups
Overview of Pearl Meyer & Partners
Equipped with over 30 years of experience, Pearl Meyer & Partners has helped thousands of clients improve and optimize their employee compensation strategies.
Pearl Meyer & Partners has positioned itself as a thought leader for growing organizations, like high-growth startups. With their consulting services, your organization can create a compensation plan that thrives in today’s fast-paced environment.
Pearl Meyer & Partners Top Employee Compensation Services
Pearl Meyer & Partners know that there’s no “one size fits all” best practice when it comes to developing your own compensation strategy. Instead, they aim to develop partnerships with clients in order to best understand their needs. Pearl Meyer has the following services:
Executive and employee compensation plan creation and feedback
Communication guidelines for announcing compensation programs (and future updates) to both internal and external audiences
Checklists for pre-IPO companies considering an audit
Why This Compensation Consulting Firm Stands Out
High-growth startups experience typical compensation challenges but at a much larger scale and faster pace than many young companies. Pearl Meyer’s consultants have years of experience with early-stage companies in various periods of growth and will be able to help you address any concerns you have.
Further, Pearl Meyer has worked with both public and private companies. This consulting firm has the insight to help any organization apply a long-term lens to its compensation strategy. With this expertise and guidance, you know your organization is set up for success.
11. HR Works – Best Compensation Consultant for Affirmative Action Plans
Overview of HR Works
HR Works is made up of human resources professionals who have served all types of clients for 28 years. HR Works aims to help your business or organization minimize HR risks and increase employee productivity through a variety of compensation consulting services.
One of HR Works’ primary focuses is affirmative action compliance. While not all organizations require an affirmative action plan, it is highly recommended. It’s especially important when it comes to your organization’s inclusion and diversity policy, an essential component of your compensation strategy. With years of experience and 100% technical compliance in OFCCP audits, HR Works closely works with you to develop your own affirmative action plan.
HR Works’ Top Employee Compensation Services
HR Works knows how important a healthy company culture is to the wellbeing of your business, especially when it comes to affirmative action. Here are some of the top services they offer:
Affirmative action plan preparation
OFCCP audit support
Consultation and affirmative action plan implementation
Federal reporting assistance
Why This Compensation Consulting Firm Stands Out
It’s crucial that your organization has a solid affirmative action plan in place, especially for your internal work culture and employee wellbeing.
HR Works provides affirmative action outsourcing services for whatever needs you have, from determining if you even need a set plan to implementing best practices for your own organization. With this dedicated support, HR Works ensures that every facet of your compensation strategies are sound and approved.
12. Compensation Resources – Best for Board Equity Compensation Consulting
Overview of Compensation Resources
With over 25 years of experience, Compensation Resources specializes in providing emerging and mid-sized organizations with comprehensive compensation and human resources consulting services.
Often working with the boards of organizations and businesses alike, Compensation Resources can help your organization come up with creative and pragmatic solutions to any of your board compensation issues.
Compensation Resources’ Top Employee Compensation Services
Compensation Resources has earned a reputation for providing sound business advice and consulting services to a number of their clients. Here are some of their top services:
Board member compensation plan review and design
Executive compensation evaluations
Stock option and board equity strategies
Why This Compensation Consulting Firm Stands Out
A pain point many larger organizations might have is determining how to compensate and engage their board members. Compensation Resources has specific abilities that aim to support programs focused on board member pay, retainers, and equity compensation.
Compensation Resources aims to provide thoughtful, independent counsel to ensure that your board is fully engaged and invested in your organization’s growth.
13. Brio Benefit Consulting – Best for Benefits-Focused Consulting Needs
Overview of Brio Benefit Consulting
Brio Benefit Consulting was founded in 2004 to help combat two pain points: the frustrating reactive approach to employee benefits and the lack of education that employees receive about their benefits.
Brio helps nonprofits and businesses alike identify the holes in their benefits strategies and creates sustainable solutions that help employers offer great plans to their employees.
Brio Benefit Consulting’s Top Services
Brio Benefit Consulting has a unique and streamlined process that is focused on helping organizations satisfy their employees’ benefits needs. Their top services include:
Discovery meetings to gain a deep understanding of the organization’s needs and culture
Customized blueprints built for each organization that serves as a road map for their strategy
Software that helps organizations track their progress
Why This Compensation Consulting Firm Stands Out
Brio is all about benefits. Plus, their unique process reflects their belief that you don’t have to sacrifice your budget to offer great benefits your employees want. They track and measure eight KPIs to help maintain this balance.
Because of their emphasis on keeping up with current benefits trends and employee wants and needs, Brio Benefit Consulting stands out as a top compensation consulting firm that organizations can look to for real solutions.
14. The VisionLink Advisory Group – Best for Variable Compensation Plan Design Consulting
Overview of The VisionLink Advisory Group
Created in 1996, The VisionLink Advisory Group is a pay design company that helps private employers design performance-based compensation strategies that satisfy employees and promote growth.
They specialize in designing variable compensation plans and offer consulting support and software for managing your strategy.
The VisionLink Advisory Group’s Top Services
VisionLink’s approach to compensation plan design centers on performance and aligning employee and employer values. Their offerings include:
Incentive plan design geared toward rewarding annual and long-term performance
Total rewards audits and structuring to help you compete for top talent
BonusRight, a tool that helps you create, communicate, and manage your company’s bonus plan
Why This Compensation Consulting Firm Stands Out
VisionLink wants you and your employees to be on the same page. This firm believes in helping you create variable compensation plans that will empower you to find and retain employees who are truly invested in the success of your business.
VisionLink made our list because they believe that above all, value-sharing between employers and employees can drive sustainable growth, which is reflected in their services.
Compensation strategy is vitally important for businesses and nonprofits of every size and industry. Remember, employee compensation programs and practices should reflect an organization’s long-term goals and priorities.
While developing an employee compensation program that addresses everything can be a challenge, compensation consulting firms are always available to guide your team through the process.
Look for partners with plenty of experience and a wide range of services in your specific space. Most importantly, look for a compensation consultant who understands that your strategy and program must lay a foundation for sustainable growth.
Interested in finding more resources on compensation consulting and human resources best practices? Continue your research with these articles:
The Department of Labor (DOL) published the annual adjustments for 2022 that increase certain penalties applicable to employee benefit plans.
Annual Penalty Adjustments for 2022
The following updated penalties are applicable to health and welfare plans subject to ERISA. Description
Private employers, including non-profits, should ensure employees receive required notices timely (SBC, CHIP, SPD, etc.) to prevent civil penalty assessments. In addition, employers should ensure Form 5500s are properly and timely filed, if applicable. Finally, employers facing document requests from EBSA should ensure documents are provided timely, as requested.
For more information: Ed Probst | (516) 872-2017 | firstname.lastname@example.org