By Susan Hanold
In our ever-changing world, flexibility is of the utmost importance. As people learn to navigate the new world of work, this flexibility applies to compensation planning as well. Whether that means getting creative with flexible work arrangements or realigning compensation goals, compensation must start with a strategy to drive productivity and engagement and to retain top talent.
For many businesses, keeping employees on the payroll has been difficult. In other industries that saw an increase in demand in the face of a global health event, some businesses have actually experienced a need for additional workers. Both issues impact compensation planning for 2020 and beyond.
To address these challenges, some companies are pushing or delaying their formal compensation cycles and determining how to structure their full compensation packages.
Here are three strategies as you look to adapt your workforce to your current and changing needs.
- Review your current compensation plans
It’s critical to understand the current state of your compensation system and related pay practices as you begin to bring employees back to the workplace. Some employees might be returning to work at a pay rate that is less than what they were making on expanded unemployment compensation. Also, some employers might have offered premium pay (e.g., hazard or appreciation pay differentials) to employees who are working on the front lines during the pandemic. Consider how long you will do this and how you will communicate with employees if or when you pull back the premium pay, remaining sensitive to the impact that might have.
Based on your situation, you may decide to conduct only manager check-ins or remove the performance evaluation completely from the compensation planning process on a temporary basis. In this process, look to leverage your technology product experts to understand all the features and flexibility that your compensation solution may have.
2. Share market information and explain your process.
The next level is to provide employees with market studies and information on your compensation process. By publishing market studies, you can raise employee understanding of compensation ranges and market impacts on those ranges. In this way, you can demonstrate to employees that compensation is thoughtfully and carefully planned. You can also stay informed on market adjustments to ensure your compenstation packages remain competitive.
One of the things you may consider if you are using a performance management tool as well is that you may want to have those discussions at the same time you review the evaluation with the employee first.
3. Train managers to talk about compensation
In addition to providing valuable context, compensation teams can support interactions between managers and employees. As the first-line resource for employees, managers often field questions and hold discussions around compensation. It’s important to provide clear communications that are simple for employees to understand and to be able to find the latest version of your compensation policies and practices. Having a sound compensation strategy in place is critical in navigating periods of uncertainty and retaining talent.
Susan Hanold
ADP
Vice President
Strategic Advisory Services