Recently the headlines of HR blogs everywhere have been flooded with the idea that employees want company culture above all else. They want work-life balance and corporate philanthropy. Even the latest stats from a Horizon Media study show 81% of Millennials expect companies to make a public commitment to good corporate citizenship. But, does that mean that the modern worker doesn’t care about salary or compensation? Absolutely not!
While all of these culture findings may be true, compensation isn’t out the window. In an era of a constantly shifting economy and mountains of student loan debt, compensation may matter now more than ever. And, the payments given to employees (whether permanent or not) will affect everything from productivity to retention. Here’s why:
Even if other factors outweigh the need and want of more money, how much an individual gets paid still plays a part in things like happiness, performance, and satisfaction. A survey by Princeton University revealed emotional well-being rises with income. However, it also showed that there was no further progression of well being once survey participants earned beyond an annual income of ~$75,000. Still, for the everyday worker and laborer, this amount of compensation is a huge deal. Money has always been an influence and conveyor of value towards the job at hand. The hard truth is, even if an employee loves everything about their job, if they are not making what they feel they should be it’s cause to move on. This is especially important to note in the field of contingent workers where competition for skilled individuals is always aggressive. Paying them adequate market rate is one of the best ways to ensure that they choose your company over everyone else.
Tip: Look at market data and keep track of rates. What does your industry look like as far as salary? Are you paying too much or too little? Looking at this type of real-time data will help decide where you stand and where improvements need to be made when it comes to how workers are compensated.
It’s no secret that more and more people are leaving their jobs. But, why? Does money have anything to do with it? Of course! The reason so many people have been constantly leaving is that they plan to in the first place. A study by Jobvite showed 50% of employed job seekers see their current position as a placeholder. Employees and other workers want to move on. They want new opportunities, experience, and, most of all, better pay. The study also revealed that of these workers, 61% rank compensation as “the biggest impact on [their] decision to take a new job.” This is especially true with younger generations who are entering the workforce. They want those better opportunities with the higher pay to help with rent, debt, and starting families.
Tip: Work with management to ensure that there are growth opportunities in play. This would include raises, promotions, etc. When a new employee joins the team there should already be a plan together as to how they can work to move up, when they will receive their first raise, and what they can do to work towards that corner office. This involves scheduling out compensation changes and knowing what an employee will make and when.
What the company has to offer candidates, employees, and contingent workers says a lot about the company culture. And, refusing to negotiate on salary or give that raise an employee deserves shows just how consistent and fair the policies really are. Whatever the decision is, it can either diminish or strengthen the trust that employees have towards their leaders, managers, and the company in general. So, even if the pay is not the key factor in the leave of some individuals, demeanor, attitude, and leadership roles towards compensation endeavors could very well be - giving employees more than enough reason to leave for another company that is willing to provide them with proper compensation while also having a trustworthy, caring attitude about it.
Tip: This is where culture and compensation really come hand in hand. Not allowing for certain advancements can cause a bad reputation all around. Instead, use industry trends and workloads to estimate possible increases while forming a compensation budget. This will give management an opportunity to make changes when needed so the right employees receive the compensation they deserve.
It’s time to stop thinking that money doesn’t play a big part in the satisfaction and performance of contingent workers and employees. Although culture, branding, and engagement are also important, providing the right compensation can aid in efforts of employee retention and acquisition. To the modern workforce and the new generation of job seekers, compensation DOES matter - a lot. So, don’t put salary efforts at the wayside thinking they can be taken care of later. Focus on market and pay rates today! And, use our Private Labor Index as a way to help your company get started down the right path of employee and contingent labor compensation.
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