During this pandemic and beyond, managers must balance the company’s financial health with employee satisfaction. As a result, many stay awake at night wrestling with salary issues and how they can attract and keep great people with tight budgets.
Money is on everyone’s minds these days as unexpected expenses, salary cuts, and mandatory unpaid days off have come with the pandemic. According to new data, managers are thinking a great deal about paychecks during this difficult time. Nearly half (47%) say they are “very concerned” about their organization’s ability to retain valued staff, and 41% are “somewhat concerned.” About a third (39%) attribute their concerns to plans for pay reductions or salary freezes.
However, it’s not all doom and gloom. Nearly half (44%) of managers say they’ve made no changes –including reductions – to starting salaries; and one-fourth (28%) say they actually have increased beginning pay for new hires since the pandemic started. At the same time, 36% of managers report that they are more likely to negotiate salary with new hires than they were a year ago.
Managers with the greatest salary-related concerns are in Minneapolis (52%), Tampa (50%), and Portland (49%). Those most likely to negotiate pay are in Austin (51%), Raleigh (48%), and Charlotte (45%).
According to another report, 66% of employers report that retention is a major concern; and they say that compensation planning is a big part of their overall retention strategy. The vast majority (85%) plan to give base pay increases throughout this year; this is up 3% from 2019. Employers also report a variety of tactics designed to attract new talent. These include merit-based pay (60%), learning and development (57%), discretionary bonuses (34%), and more perks (26%).
Employers say they are revisiting benefits to determine what offerings will have the biggest bang for the buck. Among the most popular are:
- Employer-paid medical, dental, vision, etc.
- Accrued or granted paid time off
- Accrued or granted vacation
- 401K or 403B
- Accrued or granted sick leave
- Paid family leave
- Education or tuition reimbursement
Less popular benefits that nonetheless may hold promise for attracting some workers include:
- Paid childcare
- Transportation allowance
- Paid sabbatical
- Unlimited paid time off
The more current your compensation plans and data, the more you can be confident about managing offers and raises even in the face of a crisis such a pandemic. Up-to-date market data also can help you see what others are paying so that you can be competitive without overpaying.