Your organization has duly decided to revisit its overall compensation plan. And for good reason: the workforce landscape has changed substantially and continues to evolve. Nobody knows for sure where it’ll end up. What is for sure, for the near term, at least, is that employees and potential employees have more of an upper hand. With dubious thanks to the pandemic, they seem to be collectively exploring their options and reexamining where and how they want to work.
In that light, you’ve also decided to take things to another level, and get outside help with your compensation re-do. This is also a good idea since compensation consultants are experts in their area. But first, you want to understand just what compensation consultants do. Read on for that — and more.
Exactly What is Compensation?
Let’s start there. Compensation refers to the total payments, both cash and non-cash, that you give a staffer in exchange for the work they perform for your organization.
Such compensation includes salary or wages plus any perquisites or incentives provided. More specifically, compensation typically includes an annual salary or hourly wage, any raises, a retirement plan, bonuses and incentives, and health benefits.
Why is Compensation Important?
Before you offer up a big DUH, we do need to establish that an attractive compensation plan is essential to luring and retaining top talent — folks who are particularly important to your bottom line. And that was BEFORE the pandemic. Now that COVID-19 has tossed a monkey wrench into business and workplace models, it’s more important than ever that you get your compensation plan right. But you also don’t want to give up the bank, either. That’s where consultants come in.
What are Compensation Consultants?
Compensation consultants are authorities in the design and implementation of compensation programs, with the aim of establishing just the right incentives for the employee performance you desire. In addition, these experts apprise organizations of trends or news regarding compensation, as well as what the industry is generally paying at any given time.
What Areas Should Compensation Consultants Help With?
Basically, compensation consultants should be able to: assist your enterprise with crafting a compensation strategy, make sure that what your business is paying is competitive, align your organization’s compensation strategy with Total Rewards, and put together a pay-for-performance plan.
How Can I Be Sure I Get a Good Consultant?
First, let’s establish that making a poor decision here can be expensive both time and money-wise. Knowing the right questions to ask prospective consultants can save you a lot of grief. The following are some questions you can pose:
- Are you certified in compensation or are you a Total Rewards pro?
- What kind of data do you use for your approach?
- What are the top handful of issues you factor in when seeking appropriate market data?
- Do you have any experience with my kind of company? If you deem that irrelevant, why?
- Specifically, what will you deliver and how often should we expect you to report back?
- Who specifically will conduct the work? How experienced are they?
- Once the engagement ends, can you provide ongoing support?
- How do you stand out in a field of compensation consultants? What makes you special?
Now that you know what compensation consultants do, and how to find the right one, you can move forward with confidence knowing that you’re taking the best step toward getting your compensation plan right. We do recommend that you go with the firm Mercer for its years of experience, expertise, and data-driven approach.