The average costs to replace an employee are:

·        One to two times an employee's yearly salary

·        $1,500 for an hourly worker

·        100% to 150% of an employee's annual salary for technical positions

·        Up to 213% of an employee's annual salary for C-suite positions

When I work with employers, they often want to use free or low-cost salary survey data.

Imagine having your job architecture project done.  All the details were planned, developed, and implemented. 

You can use employee reports and feel confident that the data is correct. You have the career paths and all the pay processes documented.

Your internal customers (managers and employees) know where to find the job architecture resources and use them.

Everyone in HR and hiring managers are more consistent with their decision making.

You say any of the following:

1.        They are stored by each manager who oversees the job.

2.        We don’t have formal job descriptions.

3.        We laid off the person who used to maintain the centralized storage of job descriptions. I don’t have access to those old files.

I love to read. Usually I have two books that I am reading at a time and I get at least one book read a week.

And because I mention books when I am speaking, I often get asked for book recommendations. Here is a list of books I recommend: https://prosperconsultingllc.com/book-recommendations

When you are market pricing jobs you are focused on the details.

How does the employer’s job description compare to the job description in the survey? Is this match as good as it gets or can I do better? What other jobs are available in the salary surveys to compare this employer job to? Do I have a data cut that will be aligned to this employer’s competition for talent?

And after your spreadsheet or market pricing software tool accurately documents the matches, you need to create a final report.  Often that report is a one-page summary like the one below for the Executive Leadership Team or ELT. 

Base salary ranges seem simple. But when you start using them to make competitive employee compensation decisions, it is good to look at all the parts.

You have the minimum, midpoint, and maximum of the range.

·       These numbers require midpoint progression and range spread decisions. And, of course, you must decide what the midpoint is aligned to in the external market. In this example, that is the 50th percentile.

·       In a 2023 survey by WorldatWork and Deloitte, 91% of 659 employers used the 50th percentile for their midpoints.

The integration of compensation programs between two companies is a unique situation. Usually, one company acquires the other and that company’s approach to designing and delivering pay programs is implemented for the second company.

Often, I’ve found myself liking the approach the acquired company has to a situation better than the organization that purchased them. So, then what?

M&A Compensation Integration Steps:

Step 1 – Discovery

Tell me how you would handle this situation.

Scenario:

·        A valuable employee is paid at the maximum of the base salary range. The employer does not give pay increases to employees in this situation.

·        There are no promotion opportunities. The employer doesn’t need higher level work to be done by this employee.

·        There is no budget available for a retention bonus.

There are a lot of vendors that collect and aggregate compensation data into salary survey products for employers to purchase. And I often get asked, “What makes a salary survey good?”

Here is a list of criteria I think about when determine which salary surveys to purchase:

1.      The salary surveys provide HR-reported and not employee-reported data.

2.      The list of participating employers includes enough of your competitors that you believe the data will represent the external market well. AND there is stability in the participating employers so last year’s data can be compared to this year’s survey results.

No one wants to write a job description. Describing the purpose of the job and the responsibilities as well as the years of experience, education, skills, knowledge, and abilities isn’t exactly a fun task.

But if you want to hire someone with the right capabilities to do the job, it requires taking the time to describe your expectations.

Job descriptions are used to recruit qualified candidates for job openings. They are then used during the onboarding process to ensure the new hire knows what is expected.

The first time I heard of the “Let Them Theory” was in a Mel Robbins video.  This theory asserts that worrying about situations or people that we don’t have control over causes us unnecessary mental and emotional distress. 

Allow people to do what they will do and stop trying to control them. Accept what you see and hear in actions and words. Then you get to decide how to react.

·        A coworker is gossiping about you. Let them.

·        You are being left out of meetings you should be invited to. Let them.

68% of employees believe their pay is unfair per a Gartner survey.

Employees who perceive their pay as inequitable have a 15% lower intent to stay with their employer. They are also 13% less engaged at work than employees who perceive their pay as equitable.

So, the perception of unfair pay impacts retention and engagement.

Are you communicating with your employees about how you make pay decisions? What factors are used in this decision-making process?

Have you ever opened an Excel file to see multiple colors, many tabs, and formulas that are so complicated you internally groan and wonder why you signed on to decipher this madness?

Yep, that’s where I am living today. I’m in “Excel Hell.”

Excel is an incredibly powerful tool but there are times when I must start with a spreadsheet created by someone else and I find the untangling of the details overwhelming.

If you receive performance feedback that sounds something like this, make sure to update your resume and increase your networking.

1.        “You aren’t strategic enough.”

2.        “You need to manage upward better and be more strategic.”

3.        “You don’t have the executive presence needed to be considered for a promotion.”

When I hear the word “rewards” I think about the foundational elements of any employee and employer relationship. You must get these things right or you won’t be able to attract, retain, and engage your team members.

·        Cash compensation in the form of base pay, short-term incentives like bonuses and commissions, and long-term incentives (equity or cash).

·        Don’t forget overtime pay, spot awards, stipends, and allowances.

Everything is a priority, so nothing is a priority. Yes, that is what I consider priority overload.

I once worked for an employer where everything was urgent.  Every answer to a question or deliverable was considered late. “We needed this last week.”  

When I asked my manager for the criteria to use to prioritize my work, his response was not what I needed. It was vague and not based on anything I could follow consistently and feel confident in.

Trust is the firm belief in the reliability, truth, ability, or strength of someone or something. It is the foundation of healthy relationships. And it is foundational to creating a workplace culture that supports high performing employees.

Employers, who choose to be transparent about their pay-related decisions and processes, have an advantage. They are better able to attract and retain talent. And their employers are more likely to be engaged and productive.

Guiding Principles:

I was working with an employer client recently and we were comparing the following two survey job descriptions to the work performed by one employee:

Sales Rep III

Develops new prospects and interacts with existing customers to increase sales of an organization's products and/or services. Works with customers to find what they want, create solutions, and ensure a smooth sales process. A wide degree of creativity and latitude is expected. May require a bachelor's degree. Typically reports to a supervisor or manager.P03-Senior (Career Level) : Work is generally independent and collaborative in nature. Contributes to moderately complex aspects of a project. Typically requires 4-7 years of related experience.

First a job is documented by a hiring manager who writes a job description. The hiring manager talks to their senior leader and gets approval to hire someone into the job.

Then HR/Compensation evaluates the job.  This means they do research to figure out what other employers are paying for that job to be performed. A pay grade is assigned to the job so there is now a base salary range and short-term incentive target (bonus or sales commission) that can be offered to a new hire.

Next, a candidate is selected based on their qualifications and performance throughout the interview process. And HR/Compensation and the hiring manager determine what base salary to offer the candidate.

Leading projects requires a focus on the details, communicating effectively with stakeholders, and having clearly defined outcomes and roles.

When selecting a consultant to help you with your compensation project you are going to consider cost, quality, and your timeline.

·        If you emphasize low cost, be ready for low quality within your timeline.