The rising costs of consumer goods and a tight labor market have led to increased wage pressure for employers.
Individuals are leaving their jobs at historically high rates as they pursue a career change and/or re-evaluate what they want to be doing in general. Workers are more empowered to no longer accept wages and working conditions that have been deemed acceptable in the not-so-distant past.
Employers can no longer entice potential employees with salary alone. Recruiting – and even retention of existing employees – also has to incorporate the employee experience.
In part two of our series detailing creative recruiting strategies for overcoming hiring challenges in 2022, we take a deeper look at how employers can deal with wage pressure.
Businesses are taking a hard look at whether their wages are competitive in the market. While that can be done independently, businesses increasingly seeking the help of third-party providers to assist in conducting an unbiased wage analysis. It’s one of the most common requests that Syndeo, an outsourced human resources service provider, is getting from its clients.
A wage analysis often involves determining whether a company’s base pay is within an acceptable range for the conditions of a market and making adjustments accordingly. Wage analyses could also take the form of re-evaluating a salary that is being offered for highly specialized or otherwise hard-to-fill positions. A wage analysis should also be conducted for non-exempt employees.
Consider, too, whether adding performance-based incentives may help with recruiting and retention.
These types of pay-structure assessments may have to be made more frequently as markets change and wage pressures intensify.
Employers are increasing their base pay, often in conjunction with offering sign-on bonuses, in hopes of attracting more job candidates. While that is perfectly acceptable, don’t lose sight of the retention piece of this equation. Hiring managers say employers should also apply a similar diligence to evaluating the pay of existing employees.
“Yes, you will be attracting new talent, but you will not be retaining your current talent if all you’re doing is increasing the wage you are offering new employees,” says Connor Cross, Director of HR for Syndeo. “What I would suggest is find an acceptable balance between budgeting for new hires and budgeting for retention activities.”
A big change to your company’s salary structure may take time to fully implement, and it may require making cuts in other areas of your organization.
“In the end, people always are the most important asset and cutting back in other areas needs to come first,” says Todd Matheny, Chief Financial Officer at Syndeo.
Wage pressure and budget constraints
Sure, conducting a wage analysis and adjusting rates seems easy enough, but keeping up with wage demands is not always that simple or even feasible, particularly when dealing with a limited budget and continued cost increases.
This is where the employee experience pieces of your business can come into play.
Those aspects could serve as a trade-off in instances where budget constraints may limit changes to the pay structure. That could be incorporating more flexible scheduling and hours or making improvements to your company’s culture and working conditions.
The fact is wage pressures aren’t going away: Plan and act accordingly.
As the Heartland’s leading employer services company, Syndeo partners with local business owners to help them minimize risk, improve efficiency and maximize profitability allowing them the freedom to focus on growth and fulfilling their mission. Syndeo fulfills its mission by taking on all of the HR responsibilities for our clients’ workforce, including employee relations, benefits, risk management and payroll.
~Josh Heck is Syndeo’s marketing manager. He can be reached at firstname.lastname@example.org or (316) 440-9940