20 May 3 Enterprise Compensation Management Trends to Watch For
In recent years, dramatic shifts have taken place across the economy, and these changes have caused ripple effects in the ways we’re paying employees. While factors like low unemployment support the economy overall, securing talent becomes more difficult. Some interesting enterprise compensation management trends are therefore emerging as employers aim to keep up with these changes. Here are some of the most noteworthy shifts to watch for.
1 Adjusting Budgets in a Low Unemployment Rate
The US unemployment rate recently reached its lowest point in nearly 50 years, which has prompted many employers to raise salaries and wages in an attempt to attract in-demand talent. Top performers will be expecting a large pay raise, and according to Mercer’s research, employers anticipate salaries to rise by 3.4% through the coming year.
2 Tackling High Turnover
With low unemployment comes high voluntary turnover. The tight job market has brought voluntary turnover to a 10-year high, but it isn’t just base pay alone employees look for as a reason to stay. Factors like great healthcare benefits, retirement planning, work/life balance, growth and development opportunities, and strong leadership can also influence an employee’s desire to remain with the company.
3 Attracting Top Talent
Of course, low unemployment also means workers can be more selective when it comes to career options. This is especially true for in-demand talent with unique specialties. It’s therefore no surprise that this is the top factor influencing compensation decisions today. To secure high-value talent critical to supporting business outcomes, many organizations are becoming increasingly competitive, instead of simply playing defense with compensation. Actively seeking out employees from struggling competitors is an aggressive, yet sometimes necessary, means of recruitment needed to succeed in the talent wars.
However, when structuring compensation, it’s important to remember that what qualifies as a hot job today may not the same just a few years from now. Employers should therefore be mindful not to come in with offers that are too high to maintain as the market changes.
HRsoft is the trusted global leader in compensation management software whose COMPview solution is proven to control and simplify the full process and allocation of merit, bonus and equity awards to drive manager and employee engagement.