This article relates to the Compensation and Benefits competency, commonly evaluated in employee satisfaction surveys. It tells the story of a company that needed to attract new employees and discovered how a competitive wage and benefits package was integral to this process. The Compensation and Benefits competency focuses in detail on how your employees feel regarding their compensation and benefits packages. The questions included in this competency will help your organization determine whether your employees feel they are fairly paid for the work they perform when compared to a similar job at a different company. This competency also queries their feelings regarding the adequacy and quality of their benefits package. A fair and attractive compensation package is critical for hiring and retaining quality employees. A high satisfaction level in this competency requires that your compensation structure and benefits package be fair, balanced, and understood by your present employees. This short story, The Importance of a Competitive Wage and Benefit Package, is part of AlphaMeasure's compilation, Tales From the Corporate Frontlines. It illustrates how one company discovered the importance of evaluating its wage and benefits package and adjusting it to stay competitive and attract new employees. Anonymous Submission The Importance of a Competitive Wage and Benefit Package My business partner and I recently took control of a small company that provides products and services to a very specific and narrow market segment. One of our first tasks was to fill a number of open positions in various departments. Most of the employees were long term, but we learned that the open positions had been filled and vacated several times over the past year. We wondered why it was so difficult to attract and retain qualified people with the specialized skills we needed. In a discussion with some friends, an executive for a manufacturing firm asked if the compensation and benefits package had been evaluated lately. He told us that if it's been a long time, low salaries and/or benefits might be the obstacle we needed to remove. In fact, it was. In our first weeks at the company, we launched an employee satisfaction survey that showed us how many employees felt that they were not being paid competitive wages when compared to people doing similar jobs at other companies. Further analysis of the results convinced us that we needed to reevaluate and adjust the salary and benefits structure in order to attract and retain the caliber of skilled employee needed to operate the company profitably. First, we gathered detailed information from a number of Internet databases on salary structures. Then we compared our structure and saw that we were on the lowest fringe of the salary range. Unable to manage large-scale increases all at once, we developed a plan to phase in the increases over a period of time, and broke each position down into ranges according to expertise and experience. We offered a hiring bonus, and developed a competitive bonus plan based on performance, staggering the payments over several quarters to encourage employee retention. Then we examined the fringe benefits portion of the package. We also added an optional long-term disability insurance plan, with employees paying a portion of the premium. Our company achieved the desired results by making these changes. As it turned out, the timing was perfect - long time employees would have moved on if we had taken no action. Next time, we'll be sure to make it a priority to reevaluate and adjust our compensation and benefits package on a regular basis. 2005 AlphaMeasure, Inc. - All Rights Reserved This article may be reprinted, provided it is published in its entirety, includes the author bio information, and all links remain active. |
