5 Takeaways from the Benefits & Compensation Sessions at HR Virtual Summit
Compensation has been a hot topic for HR and business leaders over the past two years. In the Benefits and Compensation learning track at HR Virtual Summit 2022, Nick Gavronsky, the CEO and co-founder of Welcome, shared his insights into building a compensation plan for better retention.
Here are a few takeaways from his session:
1. Developing a modern compensation strategy is a huge challenge.
For many businesses, building a modern compensation strategy is filled with several obstacles. For one, finding real-time data or information that’s up-to-date with the current market can be hard to do. According to Nick’s research, at least 70 percent of HR teams invest in 4+ data sources that are not real-time or inline with the current market environment. Plus, he says that for businesses with a remote workforce, 90 percent of teams say they don’t have a compensation strategy for remote work. This is a huge gap that needs to be filled.
2. Communicating compensation has never been easy.
Whether it’s during the hiring process or during compensation talks throughout an employee’s career with your company, communicating compensation has never been easy. And because 40 percent of compensation is non-cash (benefits, perks, equity)—the conversation gets more unclear. Nick shared an eye-opening statistic: 95 percent of employees don’t understand their total compensation and rationale for how they are paid. That makes a compensation strategy (and educating candidates and employees on the rationale for a compensation strategy) a critical step for all HR leaders to take.
3. The lack of understanding around compensation can lead to a higher likelihood of attrition.
According to Nick, 75 percent of employees say they would consider leaving their current job for a salary increase and at least 23 percent of employees describe negative emotions regarding their compensation. The data speaks loudly and for itself—employees need more information on their compensation and they need it throughout their time with your business.
4. Real-time compensation data can enable you to make better decisions throughout the employee lifecycle.
If your compensation strategy is up-to-date, influenced by real-time compensation data, and aligned with your market, Nick says it can influence everything from recruiting and hiring to retaining top talent and compensation evaluations. You can drive better decisions throughout the employee lifecycle and make sure that impact is consistent through every department and every team.
5. Smarter compensation drives business results.
The total cost of a company’s workforce can average nearly 70 percent of operating expenses. In other words, payroll has a major impact on your bottom line.
Nick ended his session talking about the importance of putting together a plan for your compensation philosophy and strategy. Once you have a plan together, it’s critical in Nick’s opinion that you follow these three steps:
- Communicate that plan and start using it to communicate total compensation (including all of the non-cash benefits).
- Develop a clear process that’s easy for your HR team to follow and make clear decisions on how transparent you’ll be about salary.
- Train your managers. Buy-in from the executive team is critical to build the compensation strategy, but training your managers will help you roll out the strategy successfully.
To hear more from Nick’s session and discover the other incredible sessions in the Benefits and Compensation track, watch for updates on HR Virtual Summit. Sessions will be available to watch soon!
Keep an eye on BambooHR for more from the other tracks at HR Virtual Summit. You’ll find best practices and so much more for each of the session tracks: Culture and Values, Career Growth, Wellbeing, Employee Experience, and HR Newcomers.