COMPENSATION, TALENT AND FINDING THE RIGHT MIX

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1 COMPENSATION, TALENT AND FINDING THE RIGHT MIX As optimism returns to our economy, employers are looking for innovative ways to attract and retain the right talent. In similar fashion, prospective employees, having seen holds in compensation and lack of professional growth for the past several years are poised to jump ship for more encouraging alternatives and promising opportunities.

2 Building people companies and careers Every year, AccruePartners compiles experience, research, current employment trends and commonalities among both clients and candidates to produce a whitepaper containing up to date and pertinent information for today s business. This year is no different and we are excited about the valuable insights we can provide to you. For more information about AccruePartners, visit us online at

3 Compensation, Talent and Finding the Right Mix As optimism returns to Charlotte s professional community, hiring methods and compensation packages are becoming more creative. Employers are looking for better ways to attract and retain the right talent, promote loyalty and increase retention. In Mercer.com s What s Working survey conducted earlier this year, Jason Jeffay, a Senior Partner and Global Leader of Mercer s talent management consulting, said, Without question, employers face significant challenges in raising engagement but they can be overcome by making the right trade-offs and investments in the employment deal, while enhancing leadership skills and managerial effectiveness on the front line. This has resulted in a shift by employers to become more competitive. Employers face significant challenges in raising engagement but they can be overcome by making the right trade-offs and investments in the employment deal. In addition, prospective employees, having seen holds in compensation and a lack of professional growth opportunities, are poised to jump ship for more promising alternatives. Mercer.com s What s Working survey indicates approximately one in three (32%) US workers is seriously considering leaving their organization at the present time. This is a 9% increase from Meanwhile, another 21% are not looking to leave but view their employers unfavorably and have rock-bottom scores on key measures of engagement, a term that describes a combination of an employee s loyalty, commitment and motivation. In order to gain success in acquiring and retaining a solid workforce, businesses are focusing their efforts more towards meeting the needs and expectations of their employees. Opportunity extension, compensation, employee motivation and other human resource strategies are being re-examined in light of these changing market conditions. Businesses are focusing their efforts more towards meeting the needs and expectations of their employees. Companies understand the success and profitability benefits of investing in employees, and with increasing employee expectations, such pursuits are becoming more common. The concept of employee enrichment addresses both work and non-work related factors in order to enhance the employee with the expectation that the better the employee s well-being, the better they ll perform. This sort of investment hinges on a genuine desire among leadership to see the lives of their workforce enhanced across the board. Employees value leadership that creates a positive and successful work environment, as it recognizes and reinforces their appreciation for the contributions of their employees. It s a people-first approach that breeds loyalty. Recently, AccruePartners conducted our own online survey of hiring companies in the Charlotte market to determine trends and identify competitive areas of compensation. The five main areas of focus were: Benefits, Bonuses, PTO, Opportunity and Expectations.

4 Benefits Employers are realizing that benefits are critical to prospective candidates and 84.6% of the companies interviewed feel that they offer a competitive benefits package. Savvy candidates are considering the benefits as a large part of the overall compensation package and competitive employers are paying between 60-70% or more of the benefits cost. 90% 80% 70% 60% 50% 40% What percentage of the cost does your company pay for employees? Family? employees family These results also indicate companies are offering higher percentages of health care costs paid for families and offering multiple plans. For example, some employers offer the option for PPO plans covering health coverage with more coming out of check each pay period. The alternative option is a health plan with a higher deductible and less money taken from the candidate s pay. Companies offering 401K plans prove to be more attractive to candidates. Candidates that participate in 401K plans and have a company match like the feeling of being a part of the company. A competitive match is an effective part of a total compensation plan and makes a clear statement to prospective candidates of the company s willingness to make a mutually beneficial investment. Our financial institution is being more competitive with company matching on 401K, PTO and offering an entrepreneurial culture. It is a necessary element to land a quality candidate in the financial industry. Anonymous International Financial Institution In addition to the health plan coverage offered, candidates now more than ever are considering the provider. This consideration is directly connected to the price of the health care plan, the candidate s age/demographic and experiences with the health care provider. 30% 20% 10% 0-5% 10-20% In summary, a competitive benefits package is worth considering to attract the right talent. It also reinforces that the candidate s health and well-being is of worth and importance, in addition to reducing health care costs. Bonuses 20-30% 30-40% % paid Bonus programs are being offered by 85% of the companies that participated in our survey. Coincidentally, the majority of candidates placed by AccruePartners expect a bonus structure in their compensation package. Further illustrating this point, 46% are offering bonuses to all employees. Our research and ongoing work with prospective candidates on your behalf indicates the desire for a structured, performance-based plan that holds them accountable and provides opportunity for financial success beyond their base salary. Candidates want security. Successful companies understand that increased employee 40-50% 50-60% 60-70% 70%+ People want to feel like their company is investing in them. By having a competitive benefits package, employees feel like the employer is committed to their success and longevity. Sherri Satterfield, PHR VP, Human Resources Wastequip, Inc

5 performance results in increased business performance. 70% of the bonus plans are based on a blend of company performance with individual performance. What percentage of a base salary is a bonus based? (23% = N/A) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0-5% 10-20% 20-30% 30-40% 40-50% 50-60% An article on claims that the number one Foundation of Productivity is high-performing and innovative employees. By far the most impactful factor in workforce and team productivity is hiring and retaining employees with exceptional capabilities and selfmotivation. Determining an incentive-based bonus plan is a win/win for employers. It creates a positive reinforcement for output, motivates, increases productivity all while meeting goals. Paid Time Off (PTO) 60-70% 70%+ One of the increasingly popular trends among candidates is Paid Time Off (PTO). Candidates are looking for flexibility and A-players are not interested in having a micro-managed vacation policy. The majority of our client base is migrating to a standard policy of 3 weeks PTO. 70% of our survey participants offer more than 2 weeks PTO, with the majority of those including sick days in that time. Less competitive plans (1 week after 6 months or similar) are often negotiated outside of the formal offer. The younger generation of candidates is not interested in having to work a year or longer to accrue time off. An opportunity exists to attract talent by offering PTO as incentive. The old saying goes, Time is money. PTO can be used as a negotiation tool when offered as part of a comprehensive compensation package to seal the deal with an A-player candidate. Everyone has individual and personal lives and having the flexibility to live that life can be very appealing to a candidate with marketable skills. 90% 80% 70% 60% 50% 40% 30% 20% 10% Depending on the candidate, PTO and/or the ability for remote work; flex time or other options around work/life balance become key competitive drivers. Sherri Satterfield, PHR VP, Human Resources Wastequip, Inc After how many years of service does one s paid time off increase? 1 yr 2 yrs 3 yrs 4 yrs 5 yrs 6-10 yrs 10 + yrs

6 Opportunity A common trait of the talented candidate is the desire for professional and personal development. of our survey participants have career development programs in place. 70% of them hire talent with succession and growth within the company in mind. The large majority of successful employers seek candidates who possess initiative and desire to grow. The top-tier candidates seek a company with and are often attracted to the intangibles; career path; growth potential; the philosophy of the executive leadership team; the opportunity for visibility; lateral and vertical growth; and interactions with other functions/cross-training within the company. Staying ahead of the curve requires insight and awareness of up to date technologies as well as continuing education. ZDNet.com claims that the number one way to boost a candidates value is to, Upgrade skills and engage in further learning. Certifications are, in some instances required and candidates must continue to get CPE credits to keep these certifications. The more certifications and education that a candidate possesses, the more value they provide to your organization. In turn, a company s investment to continue education is appealing to candidates. 90% 80% 70% 60% 50% 40% 30% 20% 10% Where is your company likely to invest with growth? Technology Employees Benefits Finally, a company s core values and community involvement are important in attracting talent. Opportunities to grow personally outside of work often create a sense of teamwork and in most cases benefit the organization as much as, if not more than the employee. Go-getter candidates want to feel like a part of something and appreciate this opportunity.

7 Expectations Setting expectations is a critical effort for leadership. Candidates find comfort when they can clearly see the horizon ahead and know what is expected of them it eliminates guesswork and insecurity. An indicator of a company that is good to work for is how comfortable, respected and valued the candidate feels. That feeling directly relates to candidate loyalty and willingness to perform. Only 54% of the survey participants felt like adequate employee appreciation was being exercised in their company. The opportunity exists for employers to create programs at little to no costs that illustrate appreciation. The result is increased loyalty and satisfaction in the workplace. Does your company invest in leadership development programs? If the culture isn t a fit, the candidate will ultimately not be happy and likely leave before they have reached their full potential. Diane C. Borella Human Resources Sunbelt Rentals Entreprenuer.com s article Happy Employees Make Thriving Companies encourages companies to create programs that promote a healthy work-life balance and enrich your employees lives. The result is simple... If you take the time to create an environment that effectively supports employees in blending work and life, you ll create employees that generate energy, excellence and enthusiasm. That s the real formula for work-life balance. 61.5% 38.5% 0% Yes No

8 In today s workplace, companies are paying attention to people again. This is a critical effort for companies seeking top shelf talent for multiple reasons. First, the current economic situation has led to a substantial decrease in performance and talent, making the acquisition of the right candidate more competitive. While it s true that employees with fewer options in the job market may be less inclined to leave, they will nevertheless jump at an opportunity with a more attractive compensation plan. Keep the perspective that this doesn t necessarily just mean more money. Benefits, bonuses, PTO, opportunities and expectations all come into play for the aware candidate. Another contributing trend is the attitudes and expectations of employees that have been adjusted in response to this new set of circumstances. In this generation, skills at or below basic are undesired; therefore, people are raising their demands. Ultimately, employees want employers to recognize the value of their contribution. No longer is adequate pay enough; employees want their work to be meaningful and essentially rewarding. If these demands are neglected, workers, especially the highly skilled, will not hang around. The cure for such unease can only be found in actively valuing employees, in a similar way that most companies would agree they value their consumers as individuals. Understanding what matters to the people who comprise your company and understanding how people are different from one another is crucial. Today s leaders must consider employees in the context of their whole lives, not simply their role in the company or unit within which they work. Great expectations are being developed across the board as employees are required to take on new responsibilities; in return, requesting that their employers recognize the value of their contributions. Meeting the expectations of your employees is the key to success and growth for today s companies. ACCOUNTING and FINANCE INFORMATION TECHNOLOGY HUMAN RESOURCES CORPORATE SUPPORT ENGINEERING For more information about AccruePartners, visit us online at