With today’s competitive talent market compounded by economic factors like high inflation, people leaders face enormous pressure to create a competitive compensation strategy. Click here to see Recruitment Agency in Karachi.
Most employees want more from work than just a paycheck: they want community, purpose, career growth, and professional development. They also want fairness and equity, both in how they are treated and how they are compensated.
Common Compensation Strategy Challenges
To learn more about the real challenges HR professionals face when creating comprehensive, fair, and competitive compensation strategies, we turned to our community of HR superstars for insights.
Read on for five of the biggest challenges that came up in our community time and time again.
Limited access to reliable benchmarks
Problems finding accurate and useful compensation benchmark data were quite often mentioned by members of our community.
Here is what some of our community members had to say:
“[The biggest challenge is] getting reliable benchmark data to ensure we are competitive.” – Scott Johnson
“In our niche market with limited data and specialized job descriptions, it’s hard to find comparable data.” –Karen Blakely
“Figuring out how to compare positions that are unusual or a hybrid of multiple roles [is a challenge].” – Lauren Schlicker
Ensuring fairness and equity of compensation
There has never been more focus on making fair decisions when it comes to compensation. But putting fair pay into practice comes with its own set of challenges, especially when fairness has historically not been a priority in the organization.
Fortunately, today there are fantastic HR leaders driving the conversation and pushing for more equitable compensation practices.
Here’s what some of our community members had to say about this particular challenge:
“Maintaining pay equity across our company while also competing at market rates while also retaining our superstars [is a challenge].” – Sim’s key
“It is a challenge to have transparent conversations about compensation in general. This is not specific to my organization; We need better language to communicate on pay and equity issues!” –Evelyn Kwong
Link compensation to performance
Another common challenge is figuring out how to properly link pay to employee performance.
If compensation is to be based on performance, evaluations must be conducted fairly and consistently, and companies need the right performance management processes and technology to manage them.
This is what we heard in the community:
“If compensation is to be related to performance, [the challenge is] how often to do performance reviews and how to have competitive benefits packages for a high-turnover industry.” – Jill Warzoneck
Achieving Leadership Alignment and Buy-In
Getting company executives to align on a compensation strategy is a sticking point for many HR leaders. Compensation packages must be competitive to retain and attract great people, but many HR teams face pushback from their leaders, often over budget concerns.
But as most HR professionals know, today’s employees are more informed than ever and demand fairness and transparency from their leaders. Elise said it best:
Stay competitive amid changing market factors
It is no secret that the last few years have been convulsive for all of us.
Get the 15 Five Compensation Strategy Book
Creating a compensation strategy in today’s talent market is no easy task. That’s why we created the Compensation Playbook: a comprehensive guide to developing a compensation strategy that attracts and retains top talent. Click here also HR consultancy Abu Dhabi.
The Playbook guides you through the considerations and questions you’ll face when designing or improving your employee compensation strategy.