Compensation is about more than just a paycheck.
If you want to drive retention, you need to sell more than just salary.
Total compensation includes salary, equity, and benefits. And companies should design their benefits package in a way that supports their employees’ development and wellness inside and outside of work.
Pave recently launched a new ebook called, Competitive Compensation: How to Build a Compensation Strategy That Attracts, Rewards & Retains Top Talent.
Inside, we teach you how to build a compensation strategy that attracts, rewards and retains top talent. Building off of that topic, we wanted to share a few additional ideas to get you started:
What do they like? What might they not care for? Don’t be afraid of asking your team what is and isn’t working from a total compensation perspective. Understanding the demographics of your employee base can also help you decide what’s worth investing in.
For example, if most of your employees are parents, you might consider a childcare benefit like longer than average parental leave. Or if most of your employees work from home, you might entertain the possibility of reimbursing your employees for their internet costs, or offer a home office stipend.
From there, you can expand your search by reaching out to other human resources professionals in your network and find out what competitive benefits they offer that resonate most with their employees.
Some companies will offer their employees a monthly house cleaning service to uphold their commitment to saving them time and striking a better work life balance. Nonprofits or mission driven organizations might also focus more on benefits that give back to key communities, such as quarterly employee days of service, or donations to charitable organizations.
Several of Pave’s customers are healthcare companies whose competitive compensation includes underwriting their team members’ annual licensing costs and continuing learning credits. This tactic of offering benefits and perks that both save time and effort can be as important a currency as salary. It all starts by looking at the company values, and offering benefits that match or add to them.
When our customers launch Pave’s software platform, our implementation specialists often help them get aligned on their compensation philosophy. One recommendation we make to compensation committees is to streamline and standardize employee communication of merit cycle outcomes.
If your company wants to accomplish the same, it’s critical that every email, offer letter and rewards letter reflects the dialogue you want to have with candidates and employees. If you haven’t read our most popular post of all time, The Startup Equity Glossary, check it out and think about how your people operations team might write one of your own for internal use to keep all employees on the same page.
Most of the time, employees think of their benefits as medical or retirement based options. But there are so many more that should be communicated to retain them. Consider commuter benefits, remote work stipends, health and wellness classes, and other perks.
And don’t forget home office budgets for remote workers, mobile phone reimbursements and the like. Today’s employees value these kinds of benefits as much as their annual salary, so why not quantify them? Take a common total reward like food. If your company caters team lunches three days a week, calculate how much that nets out per employee.
Yahoo famously defended their annual $150 million budget on employee food, which nets out across their ten thousand person workforce as $15,000 per team member. Talk about competitive compensation!
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Ultimately, the vast majority of people aren’t joining (and sticking around) at high growth strictly in pursuit of the highest salary on the market.
While it’s important to pay above or at the market, remember that total compensation (including salary, equity, and benefits) makes for the most compelling package.
If your company creates and communicates it with transparency, fairness and accuracy, then your team will remain engaged for the long term.
Whether you’re a founder who’s just starting to build out your team, or an HR leader committed to creating a compensation strategy for your whole company, we wrote a guide to help you put the comp at the center of your competitive edge.
Download your copy now! Competitive Compensation: How to Build a Compensation Strategy That Attracts, Rewards & Retains Top Talent