Don't Neglect Compensation from your 2017 Planning Process

It's 2017 and as with all new year beginnings companies are making plans and setting goals to ensure they have a successful year. However, some companies neglect to make compensation planning a part of their strategic planning process.

Compensation is changing, but how many people focus on getting it right?  Odds are, not enough leaders do.  The days of paying employees a blanket wage or salary are diminishing.  Companies will struggle with employee retention if they only offer two to three percent raises.  They may also anticipate challenges with recruiting good talent if their compensation plans are not competitive.

Candidates now have access to salary information with sites like GlassDoor, PayScale, and more.  Employees are sharing and comparing their wages with their colleagues (no you cannot threaten to fire them for this - review the National Labor Relations Act for more information).  Every business should make sure they get compensation right.

Get ahead of the game and strategically plan how you will compensate your employees. Participate in market studies or utilize market data or HR consultants to obtain current pay data needed to develop a sound compensation strategy.

Let's face it, labor costs are typically a company's largest expense.  According to the Bureau of Labor Statistics, as of September 2016, wages and salaries accounted for more than 63% percent of compensation costs (https://www.bls.gov/news.release/ecec.nr0.htm).  

Ensure you have a compensation plan that supports your business objectives. Get an analysis of your compensation programs.  Start 2017 off on the right foot by including compensation in your planning process.