It isn't About the Money, Until It Is
Created 2 years 148 days ago
by
RitaP
Management
Views: 981
by Julie Tuggle-Nguyen
As a Human Resources professional or hiring manager, you may have lived this scenario recently. Even in this tight job market, you have found an ideal candidate. You have put together an offer that incorporates flexibility and a comprehensive benefits package. It now comes down to one thing — salary.
Where do we begin these all-important discussions? How do we ensure that we are competitive? Here are a few ways to get started:
- Review multiple job descriptions
- Ground yourself in the facts through reliable market data
- Think in terms of total compensation
What’s in a Title?
Titles like Vice President, Director, and Senior Manager mean different things in different industries. Such terminology can be highly inflated and misleading. A VP in a global company who is responsible for 30,000 employees has vastly more responsibilities than someone with the same title who is responsible for 300 people.
Dig deeper than job title to ensure your offer reflects the actual work and responsibilities of the job. Make sure that the job description and job title match the work you are expecting the candidate to do. Having clear job descriptions allows you to level set within your own organization and with your competitors to ensure you are having apples-to-apples conversations around compensation.
Seek Reliable Data
Websites that provide self-reported, unverified salary information contribute to confusion and ambiguity. When an employee or new hire comes in with a big number based on a homegrown compensation analysis, your best defense is a good offense.
Ground yourself in reliable market data. Depending on your budget, you may choose to engage a compensation consultant. Because compensation is so important, it is worth considering an investment there. Consulting companies range in size and focus, with many of the larger companies having groups that focus on a specific industry. Understand what you need, then fill that need with the consultant. The cost can range from a couple of hundred to thousands of dollars, depending on the level of information and detail you need. Consultants often will offer a discount if you agree to participate in their survey.
Be aware that participating in a compensation survey is quite an undertaking. You are expected to provide a list of titles, job descriptions, compensation levels, benefits packages, bonus packages, and all the different elements and factors that go into comprehensive compensation numbers.
In addition to formal compensation consultants, you can tap other sources of reliable information. For example, industry associations often conduct annual salary surveys that are relevant and available to association members. The only drawback is their information may lag, depending on how often they update the survey. Additionally, recruiting firms and headhunters have a pulse on the market and can offer valuable direction.
Show Me the Money
Remember: When you’re preparing an offer, focus on (and speak to) the total compensation package, not simply salary. If you haven’t thought about the subject this way before, here are a few key elements to quantify and include: base salary, bonuses, benefits, paid time off, holidays, and long-term incentives such as stock grants. Real dollar amounts can be tagged to each of these items, and it’s important to itemize those dollars to provide a full picture of what you are offering the candidate. You also should present a total dollar figure that represents the overall compensation package. That number can be very compelling. Helping candidates see that salary is just one component of the total compensation package will help you attract — and retain — top talent.
Julie Tuggle-Nguyen is EVP of Human Resources, Midwest BankCentre.