Skip to content

Tying Compensation Strategy to Manufacturing Recruitment and Retention

The challenge of recruiting top talent to the manufacturing industry has

grown significantly in recent years, due to a skill and talent drain

that began in 2011. Nations such as China and Mexico have promoted the

education of skilled laborers, drawing businesses into their countries,

as the U.S. education system has moved away from preparing workers for

manufacturing jobs. As a result, unemployment rates are very low in

skilled roles, putting pressure on manufacturing businesses to find

the best people—and keep them.

Carrie Schochet, director of the Overture Group and an organizational

expert in HR staffing, and Bob Lindeman, managing director of the

Overture Group, recently held a Paycor webinar in which they discussed

how successful HR professionals are making compensation strategy a key

part of employee recruitment and retention. Here are their insights.

1. Take a holistic approach

Compensation is the second-largest expense for most manufacturers, so

it’s critical to get it right. That means thinking broadly about

compensation as more than just salary, but also:

* A mix of components: Take into account base salary, annual

incentives, long-term incentives, benefits and perks.

* Fixed vs. variable: Since the recession, many employers place

more emphasis on variable compensation for executive management.

* Market competitiveness: Review how your offering stacks up within

your industry.

Total compensation


can help you understand the complete picture of what you offer. Also

keep in mind that incentive programs should always be linked to company,

team and individual performance, and your overall wage and salary

program should be internally equitable and externally competitive.

2. Have a true benefits strategy

Benefits are playing a larger role in candidates’ decision-making, and

the discussion extends to more than the traditional questions. When you

think about what benefits to offer, consider:

* Health, vision, dental

* Life and disability

* Retirement benefits

* Vacation/paid time off

* Employee assistance programs

* Training and educational assistance (such as tuition reimbursement)

* Other (car, phone, computer)

* Flexible scheduling

Flexible scheduling has become a major talking point in an

increasingly mobile work world. Many employees who have children

and/or a working partner might be as concerned about flexibility as they

are about salary.

When deciding which benefits to offer, make sure the package is in line

with the needs of your employees, then link attractive benefits to

recruitment and retention through a cost/benefit analysis.

3. Stay on top of Affordable Care Act changes

Changes to healthcare legislation are growing only more complicated,

making it more challenging for employers to choose insurance plans for

their workers.

Ultimately the decision relates to your overall compensation strategy,

and employers must determine how much the company should pay for certain

benefits vs. what the employee must pay. That ratio has changed

significantly in recent years. A company that used to pay 85 percent of

the cost now might pay 70 percent, and many companies have gone to

tiered structures.

Effective HR teams think creatively about structuring a staff of

full-time, part-time and temporary workers, taking into account how

those statuses affect overall healthcare costs and build in opportunity

for more flexible scheduling for employees.

Are your business’ HR practices optimized? Learn more from Bob and

Carrie on strategic manufacturing HR by downloading their free Paycor

webinar, *6 HR Functions that Drive Manufacturing


Paycor’s HR technology


enable organizations to focus on strategy by simplifying administrative

processes, with tools such as:

* Employee/manager self-service: Empower employees and managers to

maintain their personal and team information from anywhere with an

internet connection.

* Online open enrollment: Eliminate paper enrollment and have your

employees’ elections feed directly to payroll.

* Benefit carrier connectivity: Seamlessly transmit your benefit

enrollment changes in the HR application to your carrier.

* Powerful reporting: More than 75 standard reports provide

critical information about your human resources, from federal compliance

reports to a simple phone list.

Want to learn more? Connect with us