Attracting, hiring, and retaining top talent is critical to a company’s success. As the tight labor market continues to affect businesses in our industry, it’s more important than ever that you offer a competitive compensation package. People who are potentially looking for jobs know this. Highly skilled candidates are in high demand, and they are aware they can command higher compensation. Now, when a company contacts someone about an opportunity, the first question frequently asked by the candidate is, “How much does it pay?”
If you scroll job boards like Indeed, you’ll notice more companies are listing a compensation range at the top of their ads. This is now considered a best practice. The reason? Candidates spend roughly fifteen seconds reading each ad; they’ll read the content at the top and skim the rest. A compensation range placed at the top of your ad helps candidates save time – they learn immediately whether your company is offering what they’re looking for, pay-wise.
So how do you know you’re paying competitively? Well, one of the best things about job ads now listing compensation is that you, as an employer, can do a little market research on your own. If you’re having a hard time attracting CSRs, parts runners, and apprentices, look at what your competition is offering in their ads. For that matter, you may want to look at other entry-level job openings in your community. For example, fast food companies are paying a lot more than they ever have. As a home service contractor, you absolutely want to pay better than fast food companies!
But while doing your own research can be a useful tactic to benchmark your compensation range, it’s also a good idea to get more intentional with your compensation studies. You can hire compensation consulting companies to find the data for you and help you understand it. They’ll show you whether your positions pay within the 25th percentile, 50th percentile, or 75th percentile in your market. Nexstar recommends you compensate your employees on the higher end of the 75th percentile. (Highly skilled and experienced people command that level of payment, and Nexstar members strive to be employers of choice in their respective markets.)
Is compensation everything? No. If people are miserable in their jobs, are treated poorly by leadership, and have poor work-life balance, they will leave, regardless of how well you pay them. They’ll stick it out for a while for the nice paycheck, but another company will come knocking eventually and scoop them up. That’s why you should take a holistic approach to compensation, in the form of total rewards.
Total rewards is a concept that outlines multiple factors that contribute to high levels of employee engagement. In other words, total rewards are more than just compensation. They include benefits such as health insurance, paid time off, retirement plans, and other fringe benefits. Total rewards also encompass employee well-being, leadership effectiveness and support, community involvement, and learning and development. And what about the physical work environment? Is it clean, organized, and comfortable? This also counts towards total rewards.
Now, if, after evaluating your total rewards, you feel good about them, but you still have people who are unhappy and leaving, there might be something being lost in translation. You may want to evaluate your communication with your team. Are your people getting what they actually want? You may need to tweak your total rewards to align better with your employees’ needs.
How do you hire and keep great people? Ensure your compensation is competitive. If you want the best and brightest, you have to pay for it. Fortunately, there are a lot of resources out there to help you.
If you’d like to better understand how Nexstar approaches a total rewards recruitment and retention strategy, we invite you to schedule a call with us today. We’d love to help.