Higher pay, more frequent salary boosts and increased training opportunities represent three main changes North American employers are making to ease talent concerns and attract, retain and engage workers, according to a survey from Willis Towers Watson.
Nearly 9 out of 10 (86%) of employers are hiring candidates at the higher end of salary ranges, the survey found. Thirty-one percent are considering or planning to adjust employee salaries more frequently. And 55% are increasing training opportunities.
With ongoing inflation and continued labor shortages, this is the moment for employers to adjust their overall compensation plans and rethink strategies “on how work gets done and rewarded,” Lori Wisper, WTW’s leader of work and rewards global solutions, said in a release.
Money is clearly part of the equation. A Pew Research Center study released in March found that 63% of people who left a job said low pay numbered among the reasons they quit. By switching jobs, many appeared to get the pay they wanted.
But adjusting compensation philosophies to meet long-term concerns is a challenge. Inflation and COVID-19 have made forecasting the cost of employee health care claims more difficult, according to a Mercer actuary who participated in a recent webinar. Employers may need to reforecast claims multiple times, the actuary said.
Factoring inflation into a pay strategy is tricky and not typically done, a Mercer partner noted. Employers are instead relying on bonuses and incentives, and the current approach has led to larger increases in wages than if they were indexed to the consumer price index, the partner said.
Salary compression is another issue, with employees being hired at salaries in the higher range, according to WTW leaders. This brings up concerns over internal equity between rewards for new hires and rewards for longer-standing employees.
To address competitive pay issues, some employers have turned to strategies such as “off-cycle” increases to prevent needed talent from leaving. Deloitte performed an additional compensation market analysis that effectively gave many employees a pay increase halfway through the annual cycle.
Compensation isn’t the whole picture. Anxious for career growth they feel was delayed by COVID-19, Gen Zers are demanding upskilling on the job and more opportunities to practice what they learn.
Employee well-being is another retention issue, and employers are working to address it: 84% of the survey’s respondents said they’re increasing flexibility in where and how employees work. “Employers recognize they will need to pull levers in addition to compensation and reinforce a connection to the overall employee experience,” according to WTW researchers.
Learning & development may enhance this connection. Through interactive courses, L&D can provide an engine for community building and create meaningful engagement between corporate leaders and learners. It can also provide flexible learning to strengthen employee well-being through mental health courses, such as those that help employees identify stress triggers.