Employee Turnover Issues: How to Leverage Compensation to Attract and Retain Talent

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How can companies make their compensation plans more attractive to their ideal job candidates and current employees? Often, the missing link to employee recruitment and employee retention challenges is a solid compensation plan. Here are some ideas that can make your plan more attractive.

Make salaries competitive: Research the typical wages for similar jobs in your industry and local markets. If your offers aren’t at or above the industry standard, expect to get the leftover applicants your competitors do not want.

Offer performance-based pay: Be sure to consider offering bonuses, commissions, or variable compensation incentives tied to specific goals or outcomes.

Offer equity or stock options: Offering equity or stock options can attract and motivate applicants. These are powerful incentives. In startups and fast-growth companies, talented applicants realize the upside can be significant.

Provide comprehensive benefits packages: Companies that fail to provide complete benefits packages (health insurance, retirement plans, vacation time, etc.) should expect to lose talent to companies that do.

Communicate the value of the compensation plan: If applicants and employees don’t understand the benefits, they can’t value them. Make sure you communicate the value of your offering and do so in a way that applicants and employees can easily understand.

Offer flexible work schedules: Flexible and remote work arrangements can be very attractive to talented applicants and employees seeking work-life balance, hate traffic or live far away.

Suppose your company prepares and communicates your compensation plans with these guidelines in mind. In that case, attracting and retaining top talent should be easier. If you don’t, prepare to lose talented applicants and employees to your rivals who do.

These tips will likely help you attract and retain many more of your ideal applicants. Once you have a pipeline of quality applicants, your next challenge is simply to pick the best and avoid the worst.

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