How to win at hiring and employee retention in the COVID-era job market
If there is only one lesson to be learned about hiring and employee retention in this COVID-era job market, it’s that “being competitive” isn’t enough. Gone forever (hopefully) are the days when you could successful manage pay by opening up a survey report and looking for middle-of-the-road numbers.
There is a Great Resignation happening right now. After a year and a half of making it through COVID, people are realizing they don’t have to settle anymore, and they are demanding more from their employers. As a result, executives and leaders, particularly in the health field, need to re-think the way they are paying employees.
Pay planning and execution must become strategic and individualized.
A strategic pay program is one that is designed to achieve a particular result (retaining good employees), based on a set of principles. Sure, you’ll still need those surveys, but they can’t be the be-all, end-all. Rather, pay surveys are just one tool in an executive’s compensation tool box.
Want to win at hiring and employee retention? Take these steps:
Become aware of how effective each individual person is. Run an evaluation on how much each job, and each person, contributes to your organization. Start by assigning simple “stoplight” categories to each: green for highly effective, yellow for moderately effective, and red for ineffective. (This is a simple version of the approach ElementOne takes). You will become aware of the value you receive from each employees’ efforts, and that will help ensure that you’re paying your team equitably and fairly (you wouldn’t want to pay a green-light the same as a yellow-light, for example). People who are paid fairly are more likely to stay.
Be honest about the level of talent you need for the jobs you have (and will have). In an effectively zero unemployment setting for many skill sets, paying the median of the competitive market is just the starting point. If you need top talent you have to be aware of not just what others are paying, but what you have to pay to get the specific people you need to move your organization forward.
Stabilize your workforce with appropriate compensation. Become aware of what level of turnover and reduced capacity you can afford. Your strategy should be to establish pay targets that support a stable workforce, aid recruiting and retention efforts, reduce turnover, and minimize the time openings take to be filled.
Most importantly, recognize that in this new “employee-driven” market, the old method of “asking Finance how much we can afford to pay” will no longer work – to be effective, we must find out how much our workforce will cost, and then figure out how to pay for it.
Make your team feel valued, in the most important way. How do you want to be perceived by your staff? Let’s be honest, you aren’t an “employer of choice” if it’s easy for employees to choose someplace else to work. If you aren’t paying enough for your employees to support themselves and their families, and be compensated based on the value they provide you, don’t expect employees to be dedicated to you.
In short, now is the time to get strategic about the way you pay your team if you want to attract and keep them.
The fundamental paradigm shift needed in the post-COVID world will be to determine your pay strategy first, and then figure out how you’re going to pay for it. A properly compensated, high-skilled, low-turnover workforce is more effective and efficient. A strategic pay program will pay for itself. Get started today, and let us know if we can help.
Post authored by Edmund B. Ura, compensation strategist & ElementOne president.