Total compensation has always been an essential component of a company’s strategy. It is gaining importance now, as people re-evaluate their individual situations. Work and life have truly become integrated elements in people’s lives through the pandemic, as many were forced to work from home while caring for children or parents.
In addition, many factors compound to contribute to labour shortages, not the least of which has been voluntary attrition rates. In some organizations, these departures are sudden, and are higher than ever, costing thousands in hiring and training, not to mention knowledge transfer and productivity losses.
The truth is, the pandemic exacerbated what has been a slow but steady shift in how people think about work, its purpose and its necessity. The result is that corporate strategy development and implementation are impacted when this thought process results in employees feeling disengaged from a company.
The good news is that whole and holistic human resource practices can counter some of that disengagement and be a competitive advantage for companies. Many companies I collaborate with offer compensation that includes a salary, some bonus, and standard benefits. Many in recent years have been creating chic office spaces and a “cool” team vibe. During the pandemic, those were largely lost, and scores of employees were left re-evaluating what really mattered to them.
The attached article prepared by Strategy & Business Magazine, summarizes research done over several years that points to the need for companies to consider total compensation packages that reflect individual needs. It sounds complicated but is actually very simple. Know (really know) what people value, and develop compensation that gives them that. An espresso machine in the office or a gym membership does nothing for someone who does not value these things.
Interesting quotes from the article:
“…the relative importance of financial compensation has declined by 11% over the past decade. The importance of other types of benefits—medical, dental, vision, and life insurance; wellness and supplemental health benefits; and child care—has doubled. Work–life balance options and training and career development have tripled in importance…”
“…engagement surveys provide little or no meaningful insight into reward strategies because they focus on a point-in-time sentiment rather than a gauge of employee preferences.”
Human resource strategy is closely linked to corporate strategy. Without people who care about the purpose, there’s not much that can be achieved.
Written by Lesley Antoun
Lesley Antoun creates crystal clear strategies with leaders, with their teams and with their organizations. Her consulting firm has offered advisory services and strategic planning expertise to small privately-held companies, large publicly traded corporations, Crown corporations, Universities and First Nations organizations.