Improving Employee Retention
Retaining top talent and employee retention is critical.
Investing in growth: Invest to retain talent. Cash is still king. People want to have their work rewarded today and not paid out over time. Their future is uncertain and while cash increases the probability of retention long term it does address the shorter-term risks.
Work location: Employers are conceding that some people will not relocate to join a company or take a new job. Hybrid working arrangements of in-office and work from home are becoming the norms in most companies and they are thinking through what the future of work looks like when back in the office. It can’t be about conference calls over Zoom, Microsoft Teams, or WebEx.
Are you being paid what you’re worth?
This is a common concern among employees and job seekers. One way to address that concern is to benchmark your current or expected compensation against independent data. Fortunately, it’s easier than ever to do your own research. Using publicly available information from sites such as Salary.com and GlassDoor.com as well as job-specific surveys by publications like Chief Executive, you can gather pay ranges for your targeted position.
While many people focus on the median salary, I recommend carefully considering the entire range so you can negotiate from an informed position. For example, if you’re an experienced IT leader with in-depth knowledge of a hot new technology that’s in demand by many employers, you can probably command far more than the median salary.
But the salary range is just the starting point. The real wealth-building opportunity is in variable compensation, particularly long-term incentive awards. Those areas also tend to offer the most flexibility in negotiations if the company really wants you.
That last point—the company really wanting you—is the key. Your best chance at leverage in discussing pay is to ensure that you are the best match for the position being discussed, from the company’s perspective as well as your own. Carefully consider the job description the company has laid out. Ideally, you can learn enough about its needs to potentially modify that role into something that enhances what they are looking for and plays to your strengths.
Nothing enhances your credibility better than a “been-there-done-that” situation. But if you can demonstrate a track record for getting things done, and are willing to go to school on the company you are targeting, you can also get paid well for stretching out into a new direction.
The type of employer you are considering will impact your pay structure. In general, a well-established, publicly-traded company will have pre-determined ranges for every pay element at every level of management. On the other hand, there tends to be more wiggle room at well-capitalized private companies.
Regardless of the type of firm, higher pay will go to those with the greatest impact on the company, especially at the more senior levels. If its bottleneck to growth is sales and you have a history of driving revenue growth, or its bottleneck is technology and you have a history of leading successful product development, the company will often go a long way toward offering a pay package designed to bring you in and reward you well for achieving what you promise.
Every employer or investor will try to keep as much of the value you create for itself or its shareholders. But as you prove yourself, you begin to gain the upper hand in that deal. The more consistent your performance, the greater your position with regard to pay. Ultimately, companies will pay for value creation.
This brings me back to where I began – helping you understand if you are being paid what you are worth. Public salary benchmarks are a good starting point, but the ranges are wide for a reason. Part of it is due to the differentiating factors I have described above, but part of it is due to the quality of the data itself.
For all the experience we have with surveys, they remain a highly imperfect tool of a messy science. If you are pursuing a fairly standard job in an industry where that job is common, you can put more stock in the ranges you find, and figure out how to position yourself in that range. The more tailored your role or specialized the company, the better chance you have to carve out a tailored compensation package, or to be a valued member of a senior team working together to build something great, and be paid accordingly.
As a compensation expert with more than 25 years of experience, this is the best advice I can give you: Carefully research the companies you’re considering applying to and the critical needs that they have. The better you can match your skills to their needs, the more attractive you will be to them, and the more bargaining power you’re going to have.
Marc Hodak is an expert for Crenshaw Associates in Executive Compensation Benchmarking. He is a Partner at Farient Advisors.