How can organisations keep pace with shifting pay levels to support retention?

Author: Louise Haines, Managing Director of Henley Reward Consulting

After two years of the pandemic when everyone was looking inwards both at home and at work, the world has opened back up with people now reassessing their life and how they view work. This shift has seen many sectors experience significant movement in talent. Attracting and retaining has become a real struggle for companies, particularly those in technology, digital, energy, investment and those companies requiring professionally qualified staff – from social care, through to teachers, finance, lawyers and quantity surveyors.

It is an employee led market at the moment with companies trying to keep up with the changing pace of salary levels and work-life-balance needs. Recruitment and retention strategies must accommodate new ways of working and consider the new needs and expectations of both prospective and existing employees. But how sustainable can all this be? How do you know what the “market rate” is when employees are receiving new offers that can seem excessive and unaffordable in the long term?

Here are four strategies that you might want to consider to help support a proactive retention strategy:

  • Making sure you have a high level of employee engagement is going to be critical as the world starts to open back up. Conducting regular employee surveys to understand staff concerns will be key to identifying where your priorities need to be. In addition, many staff may have become disengaged with the company’s mission, so linking any engagement in with your company’s business plan will add significant value given most employees will want to feel like they are part of your business’s journey.
  • External benchmarking to ascertain what is actually happening in the market for those “hot” jobs is also essential during this time. The best way to get this intelligence is by using an independent benchmarking provider that actively reaches out to equivalent post holders in the market so that you can get a true representation of what is happening. Many companies that are reliant on a database may see pay data that is up to 12 months old and not reflective of today’s shifting landscape, so asking how up to date the data is from your provider is a key question.
  • Consider total remuneration when evaluating the market! Your salary levels may not be at the upper quartile, but your company supports employees with broader financially beneficial reward mechanisms or indeed provide greater work-life balance that can add significant weight when recruiting and retaining talent.
  • Linked to this is to understand what post holders, both internally and externally, are saying around what an attractive proposition might look like. Salary might not be the sole driver, with many employees more interested in the culture, learning and development propositions and defined career progression opportunities as motivators to stay. Do you have the right career structure in place to support individuals in their development? This can provide a much stronger retention tool, with post holders building loyalty to a company that invests in their staff’s development.

Armed with this intelligence from your internal staff cohort and from the external market will help you ensure you can make proactive and informed decisions about your people strategies. This in-turn will support cost efficiencies in the long term, future proof your talent pool and help to ensure you are an employer of choice today and tomorrow.

Note: Henley Reward Consulting is a specialist provider of research led remuneration benchmarking, reward insights and D&I evaluations for Executive and organizational wide functions, to support the development of robust people strategies. We understand the importance of real time data and how data can support an organisation through its journey. For more information please visit: Henley Reward Consulting