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Published on Nov 19
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A compensation plan refers to all the components of your compensation package, including wages, benefits, incentives, potential bonuses, and future salary increases. To attract and retain the top talent in your industry, you need a competitive compensation package. The best way to ensure that your business stays competitive with recruitment and retention is to develop a compensation plan that reflects the true value of your employees. Read on to learn more about how a well-structured compensation plan can help your business grow and succeed, maintain a stable workforce, and attract new talent – giving you a competitive edge in your industry.
Compensation planning
Taking the time to engage in compensation planning allows you to truly evaluate the goals and needs of your company and employees. Take this time to ensure that your compensation plan complies with your company’s mission, culture, business plan, and human resources strategies. A formal, structured compensation plan allows you to create transparency and fairness across your pay structure and helps you pay employees what they’re worth – boosting morale, engagement and retention.
Review your annual payroll and compensation budget annually and list all of the roles and positions within your company. Take time to research the compensation levels of each of these roles within your industry. Then you can create a breakdown of the pay for each role, ensuring that your pay aligns with industry and employee expectations, while supporting your mission and business needs.
Philosophy and strategy
Top performing companies have a formal compensation strategy in place. Your compensation strategy should include all of the elements of your compensation package, including base pay, incentives, benefits, bonuses, and takes into account future salary increases.
When considering benefits, if you can only afford to offer one employee benefit, health insurance for your employees and their families is your best bet. Often available from your health insurance carrier, dental insurance plans are designed to cover the costs of preventative and emergency procedures for your employees. Vision insurance is often an optional addition to your health policy and helps cover the costs of regular vision exams and a percentage of the cost of corrective lenses. For more on benefits, read our article on Selecting the Best Benefits for Your Organization.
Pay for value
A competitive compensation plan can help you retain your current employees and position you to recruit from a pool of top talent. Your compensation packages should reflect the expected pay for each position in your market, while also reflecting the contributions that your employees are making toward your company’s strategic priorities.
Conducting a market review of salaries of each role in your company at least every two years can ensure that your company remains current and relevant in pay structures. If your compensation is out of whack with the rest of the marketplace, it may be a good time to reevaluate your pay distribution and payroll budgets.
Sheakley’s compensation experts are here to help
Employee compensation is an investment in your business, and you should look for ways to maximize that investment. Planning your strategy and developing the proper budget for compensation is essential to recruiting and retaining the kind of talent you need to grow your business. As a professional employment organization, Sheakley’s experts have knowledge and expertise from multiple industries, enabling us to help you create a meaningful compensation program that meets the expectations of the talent in your industry.
Schedule your free consultation with a Sheakley PEO professional today. For more in-depth information about PEOs, download our What is a PEO e-book today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.
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