What does it take to be an employer of choice and best place to work in today’s full-employment economy? Across most industries in California, the answers are surprisingly similar based on MMA’s work with small- to mid-tier employers. The challenge for many is meeting the increasingly higher bar due to competitive pressures to attract and retain the best employees.
The following is an overview of winning compensation and benefit strategies in today’s marketplace.
COMPENSATION THAT IS GOOD – VERY GOOD.
Attractive pay is the attention-grabber that motivates candidates to look more closely at your firm. What is “attractive” compensation? Firms that tend to pay above market median in total compensation do the best. A company’s approach to salary increases can also make a decisive difference. Over the past decade, salary increase budgets have been relatively constant at 3% to 3.5%. At the same time, annual turnover has been consistent at 14% to 18%. Having a good process to identify and reward the top-performing employees can go a long way to retaining your most valuable people.
EMPLOYEE HEALTH AND BENEFITS THAT COVER ALL THE BASES, BUT AREN’T TOO ONEROUS IN TERMS OF CO-PAYS.
Due to the rising cost of health care, employees are placing a high priority on coverage. That means medical, dental and vision plans that cover themselves and their dependents.
RETIREMENT BENEFITS THAT HELP EMPLOYEES GET AHEAD.
With defined pension plans a thing of the past, employees are drawn to organizations with employer-funded retirement programs, such as 401k or 403b plans. Those organizations with an employer contribution, which are increasingly common have a better chance at recruiting employees.
EQUITY PARTICIPATION TO BENEFIT FROM THE COMPANY’S SUCCESS.
Stock options, restricted stock awards and employee stock purchase programs are some of the reasons why so many people head to technology and biotech firms. They can offer opportunities to generate wealth. Companies that offer equity ownership in some form have a greater opportunity to win the hearts and minds of younger and more seasoned professionals.
A WELL-DEFINED CAREER PATH.
Increasingly, employees are looking for a clear career path that includes professional development, training and mentorship. Top performers have many options to go elsewhere. Forward-thinking employers are making a commitment to their best employees to preempt them from looking elsewhere.
A POSITIVE AND INCLUSIVE COMPANY CULTURE/BRAND.
Younger professionals in particular want work-life balance and prefer employers that are trying to solve the world’s problems. They want to be part of the solution, not the problem. Employees also want to work for employers who respect gender and racial diversity and demonstrate it in their hiring practices.
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