Compensation & Benefits Strategy – Top 10 design considerations

If you want to attract and retain high calibre talent in today’s competitive labour market, your Compensation & Benefits Program will need to be competitive with other companies operating in the same labour markets. It will need to be consistent with your business strategy and competitive on an industry wide and geograpical basis.

To meet these high aspirations you will need to consider all or most of the following, when designing and establishing the program elements & detail. It will need to:

  1. Have the ability to attract, motivate and retain both prospective and current employees
  2. Be flexible to adapt as the business grows, develops and meets new challenges
  3. Reward both Individual and Team Performance
  4. Reward skill development
  5. Reward flexibility, initiative and creativity
  6. Be easy to understand and communicate
  7. Be cost effective and affordable to the business
  8. Be simple and easy to administer
  9. Be straightforward to benchmark against your Industry norms and your competition for similar talent
  10. Compliment your Employer branding

Easier said than done. Worth the effort though. How does your company’s C&B model rate against the above best practice design criteria?

Reshaping & Realigning HR

Like all professions HR is constantly evolving and redefining itself as a profession. This is as it should be, the business world demands it. The key to the ongoing success of this evolution is to ensure that the profession remains up to date, current and directly aligned to the business goals it supports. Better still to be one step ahead and anticipating future needs and trends. Unfortunately, past experience suggests HR has not always stepped up to the plate when asked to contribute and frustrates business leaders who feel compelled to demand more from their HR Teams.

In this brief article I would like to outline current HR trends, list key HR competencies professionals in this field should seek to display, reference emerging challenges for HR and finally suggest what Business Leaders really want of their HR support colleagues.

HR trends

Over the last decade or so, the following trends and strategic intent have emerged in respect of the HR profession, as I see it.

(a) Significant outsourcing of HR activity

(b) Reduced size and layering of HR functions

(c) Reduced number of HR Generalists on HR Teams

(d) Increased number of Individual Contributors and HR Specialists

(e) Much stronger focus on use of Technology to drive HR efficiency & effectiveness

(f) Exciting emergence of HR Data Analytics in an effort to build more robust decision-making

(g) As a direct result of (f), closer liaison between HR and IT

Modern Day HR Competency Profile

To succeed and grow within HR, some key competencies are now rising to the top and are being demanded, but are also enabling HR widen and deepen its influence. They focus on:

(a) Strong and trusted Business ally to senior leadership

(b) Effective Organisational structure designer

(c) Comfortable with and aware of Technology

(d) The guardian of Organisation Culture

(e) Champion of change enablement

(f) Talent minder & nurturer

(g) Proactive operational action taker

Today’s HR Challenges

Today’s HR challenges haven’t changed that much over the last decade or so. They reflect the reality of globalisation and the never ending search for greater business effectiveness. The list includes:

(a) Winning the talent war through finding, developing, engaging and retaining resources

(b) Becoming more strategically aware and being accepted as a Business Partner

(c) Building a unique Employer brand, in an effort to become the employer of choice

(d) Embedding agility, flexibility and adaptability into the Organisation psyche

(e) Embracing the use of Technology

(f) Recognising the employee population as an asset, but an asset that has to generate and deliver a measureable return.

So what do Business Leaders demand of HR

Taking all of the above into account and distilling it into real helpful meaning for Business Leaders, sees them demand the following of their HR Teams.

(a) Maintaining a strong, full Leadership Pipeline

(b) Growing and developing Talent at all levels

(c) Making more use of new Technology to help teams collaborate & share

(d) Keeping the Organisation change capable

(e) Ensuring the Organisation Structure is fit for purpose at all times and remodelled to suit changing needs

(f) Moulding an Organisation culture that supports the Organisations Strategy

(g) Supporting decision-making through better use of workforce analytics

Asking and demanding a lot I know, but HR can deliver and position itself to become a trusted ally of & to the Business and its senior leaders. Doing so will earn the right to be seen as one of them.

The Right people are more important than The Right Strategy

Jack Welch the retired ex-CEO of General Electric (GE) said, “getting the right people in the right jobs is a lot more important than developing a strategy”. He may well be right, and I would suggest that finding the right talent and developing their full potential should actually be a key part of your overall business strategy. Recruiting new talent is likely to be a €1m investment decision. It is not to be taken lightly and requires a robust process. You should approach it like any other business investment decision and seek to minimise poor decision-making and eliminate as much risk as possible from the outcome. If you are investing a €1m+ over an average career tenure, you need to be sure you are making a good investment and will see a good return on your investment. So how can you increase the likelihood of success? By following a disciplined step by step focussed recruitment & selection process. Best practice will utilise most or all of the following stages, typically in this order;

The hiring process stages

Role Justification (title/level/salary/role summary/why now needed/consequences of not hiring). Normally completed by the hiring manager and passed up the Organisation for approval.

Job Description (fulltime/part-time/permanent/temporary/contract/detail role duties & responsibilities/reporting lines). Hiring manager normally develops this.

Person Specification (education/experience/competencies). Responsibility of the hiring manager to complete with the job description, both used to create job adverts.

Role advertising (recruitment agencies/social media/radio/newspapers/trade journals/employee referrals/company website/career open days)

Selection Process (screening/interviewing/testing/competency profiling/assessment centres/personality traits insights)

Interviewing (competency/motivational fit/behavioural based questioning techniques)

Candidate Vetting (reference checks/pre-employment medical/drug screening/qualification verification/permit validating)

Job Offer Process

New employee on-boarding Process

Induction Training

Probationary Period Management

Conclusion

Quite a detailed process and often time consuming, which doesn’t help in the current skill gap shortage economies we work in. However take shortcuts at your peril. As someone once said, “if you think it’s expensive to hire a professional, try hiring an amateur”.