As summer begins to wane, you may be hunkering down to start your compensation planning for 2020. Perhaps it is something you put on auto pilot, just the annual routine of plugging in an increase and you call it done. I can tell you that employers who are winning the current talent wars are paying at or above market base pay, have variable pay opportunities which keep top talent engaged, and have leadership and cultures which are engaged and loyal.
How does that compare with your compensation planning?
Tight Labor Market, Flat Wages
The World at Work 2019/2020 Salary Budget Survey Top-Level Results indicates projected salary increases on average, across industries across the United States, will be 3.3% in 2020. This percentage is up from 3.2% in 2019 and 3.1% in 2018.
Why worry about a few tenths of a percent difference in salary budgets year over year? What is important to note is the fact that we still have historically tight labor markets, and yet wages are not rising in notable ways in tandem with that fact.
While it is important to remain competitive with projected base pay increases year over year, it is imperative to:
Make the most of variable pay. Well-designed incentive and bonus plans reward the right results and have a positive impact on your company’s bottom line.
Take care of your super-stars. For those very few consistent super-stars you really don’t want to lose to your competition, you need to let them know their value and contribution to your company’s success. You don’t have to treat everyone the same, you have to treat everyone fairly.
Clearly communicate your entire employee value proposition to potential and current employees. Your culture and leadership need to be at the top of this list. If they aren’t, there’s work to be done.
Need Help Doing Your Compensation Planning the Right Way?
Take a new look at how you plan and implement your compensation plan. Conover Consulting has worked with companies to create and refine compensation and bonus structures designed to motivate employees and align a culture. Get a compensation check-up or find out how you can motivate your employees with a bonus plan. Learn More.