Tying Compensation Strategy to Manufacturing Recruitment and Retention
Posted on May 8, 2014
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 reports 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 Success.
Paycor’s HR technology solutions 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
* 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 today.