What the Right Compensation Specialist Can Do for Your Business
As of 2023, it costs the average business approximately $4,000 to hire an employee. This number can vary drastically depending on the role. Unfortunately, this cost can quickly add up if you don't advertise the right information.
One of the most important attributes to convey is a proper compensation structure. Working with a compensation specialist goes a long way toward acquiring top talent.
Not everyone understands how these professionals can help, though. Let's explore the key information you need to keep in mind.
Attract and Retain Talent
Having the right compensation plan will help you generate interest in open positions. It will also keep employees around after you've hired them.
The compensation consultant you work with can establish an industry-standard structure for your new hires. This ensures that you neither pay more nor less than you should. If your company offers bonuses or commission payments, your specialist can help you configure them.
Businesses often arbitrarily choose amounts for these payments. This could lead to offers being unattractive or overbudgeting for a position.
Incentivize High Performance
People work best when they feel they're getting paid sufficiently. For example, let's assume that someone was making $40,000 per year in a role that normally makes $60,000 per year.
It's not unlikely for their performance and morale to fall short of your needs. Imagine how much better their performance would be if they were making $65,000+ in their role. There's a good chance they would be more enthusiastic about their responsibilities.
The professional you hire can fine-tune your compensation amounts to keep your employees motivated. This also elicits more respect from your workers. Professionals don't take companies seriously if it's obvious they cut corners when budgeting for compensation.
You don't always have to hire new employees at your organization. You can reconfigure your compensation structure to make existing workers more efficient.
As previously mentioned, acquiring new talent is an expensive process. It shouldn't be your first option when aiming to improve performance.
By working with a consultant, you can avoid expensive onboarding costs and employee salaries. This easily saves your business tens of thousands of dollars per year.
Evaluate Program Performance
A compensation specialist will regularly monitor your program's performance. They'll help you emphasize strategies that work and modify those that don't. For example, industry trends change over time.
There's a chance the average salary for a role could increase substantially over a few years. This often occurs when demand rises.
Your consultant will assess how you compare to the market and modify your structure accordingly. They can also examine pay equity at your organization. You should avoid situations where some employees are paid more than others for the same role.
This could cause resentment and lead to poor performance/resignation. Your specialist can analyze your company's incentive programs, as well.
They'll investigate how your incentives and bonuses motivate your workers. If the programs aren't hitting the mark, you can reevaluate them.
One of the most important attributes of a good consultant is objectivity. They have no stake in your company, so they won't have bias when making their decisions. Instead, they'll provide expert insight that aims to get the best possible results.
Keep this in mind, as many entrepreneurs find it difficult to establish payment structures on their own. Objective results also make analysis easier, as everything is quantifiable.
Access to Quality Benchmarking Data
Consultants have access to high-quality survey data. This helps them strengthen their compensation analysis. It also seamlessly provides you access to this information.
It could take substantial time and money to acquire this data on your own. Small businesses often don't have the necessary resources.
Benchmarking data is especially useful in large industries. There are likely dozens of competitors that you don't have time to research on your own.
Peace of Mind
You won't have to worry about this burden when you hire a consultant. You can focus on other areas of your company instead. This helps improve your business as a whole.
It can also lead to lower stress. Consider a scenario where you barely have time to respond to new applicants. Imagine how difficult it would be to find time to rework your payment structure for new employees.
Consulting is a continuous process. You'll have access to key information when you need it. Depending on your agreement, you could receive guidance shortly after you contact them.
Think of compensation specialists as a resource you can tap into. This serves as a great way to supplement your company's in-house talent.
Finding a Compensation Specialist
Finding the right professional is easier than it seems. Check their past reputation to see what other clients have to say.
Only work with compensation specialists who have strong positive feedback. You should also ask about their pricing structure.
Not all specialists are created equal, and you often get what you pay for. It's not recommended to choose professionals on the lower end of the price range.
Are they easy to get in touch with? If you have difficulty communicating with them, it's best to look elsewhere.
Consider how often they work with companies like yours. Prioritize consultants who understand your industry and businesses of your size.
Always ask about their deliverables before you hire them. They should have no trouble providing insight into what you'll receive at the end of the project. For example, some consultants only offer concepts.
Others provide finished materials, such as documents and formulas. There shouldn't be any confusion about what you'll get before signing an agreement. With enough due diligence, you'll find the ideal choice for your needs.
Get Started Today
The right compensation specialist can help streamline your talent acquisition. This helps streamline finding the right employees and keeping them around. From here, you can take your company to new heights.
Kinitro offers a flexible platform that can help you automate your company's incentive payouts. This increases transparency for your employees and consolidates information in one place. Request a demo today to learn more about how we can help.