A recent survey suggests that 66% of companies prioritize a strong compensation strategy for retention, improved hiring, and attracting talent with in-demand skills. If your company wants to excel in the competitive landscape of high-impact hiring, offering a creative compensation package that offers more value than the conventional salary component is crucial for attracting job-ready candidates.
How Compensation Impacts Recruiting Strategies: An Overview
The compensation structure is one of the key factors that employees consider when evaluating potential employers. The regular basic pay and annual bonus are not sufficient to attract talent in today’s job market.
Recruiters must emphasize understanding the aspirations and preferences of their target talent and design role-specific compensation packages with perks and allowances beyond the standard pay structure.
For example, let’s compare Company 1, which offers an ₹8 lakh CTC package to an entry-level ML engineer, with Company 2, that offers a ₹7 lakh CTC package but provides additional compensatory elements like financial aid for upskilling, paid-time off, greater work-life balance, and a more inclusive work culture. In this scenario, many employees might opt to go with Company 2 as candidates are increasingly seeking companies with a positive work culture that promotes professional growth.
Read More: The Best Companies to Work For in India 2023 & What They Do to Keep Employees Happy!
5 Compensation Techniques for a Creative Compensation Structure
Here are some compensation techniques that can differentiate your compensation structure from competitors and help attract more candidates. Remember, there are no strict rules for structuring compensation techniques—it ultimately depends on what you believe will work best with your recruiting strategies!
- ESOPs: Traditionally offered to high-ranking staff at corporates, employee stock ownership plans (ESOPs) are offered freely at many startups. They are popularly used by companies to draw bright talent looking to associate with the company for the long haul.
- Pay for performance: While already common in the compensation structure of most C-suite executives and the sales function, performance-based incentives or profit sharing can even be introduced in the compensation structure of employees with clearly-defined KPIs as an incentive to join the company.
- Joining bonuses: Several companies follow the recruitment idea of offering large signing bonuses to draw high-value talent. Candidates prefer such recruiting strategies as it gives them a windfall gain over and above the basic pay. However, to safeguard your company’s interests, you can choose to defer the bonus to a year after joining so that candidates don’t join the company just for the lure of the joining bonus.
- Financial aid for upskilling: More and more employees realize the need to constantly upgrade their skill set, and you should tap this sentiment to attract candidates. You can sponsor the education of your employees or offer to reimburse them once the program is complete. Such recruiting strategies not only attract new candidates but also generate a positive employer image that has a ripple effect in the long run.
- Beyond cash: Indirect monetary rewards, such as sponsored company vacations, paid birthday leaves, employee discount programs, access to wellness programs, on-premise creche facilities, and prepaid cabs, make the workplace more attractive and give a better sense of work-life balance.
Communicating Creative Compensation to Candidates
To communicate creative compensation to candidates effectively, consider the following strategies:
- Prompt Explanation: Clearly explain the unique components and benefits of the creative compensation package.
- Tailored Approach: Use personalized communication to address individual candidate needs and preferences.
- Showcase Value: Highlight how the creative compensation aligns with candidates’ goals, career development, and work-life balance.
- Utilize Multiple Channels: Employ various communication channels, such as email, social media, and in-person discussions, to reach candidates effectively.
- Transparent and Open Dialogue: Encourage candidates to ask questions and provide clarity regarding the creative compensation offering.
- Recruitment Marketing: Incorporate details about the creative compensation package in job postings, the company website, and recruitment materials.
- Ongoing Communication: Maintain consistent communication throughout the recruitment process, ensuring candidates have the necessary information about the creative compensation options.
Ready to Get Creative?
It is crucial that you design a unique compensation structure for every job role. Train and educate hiring managers on advocating these innovative compensation approaches during the recruitment cycle. Monitor and evaluate your strategies regularly through employee and candidate feedback to assess the impact of creative compensation on your recruitment efforts.
These approaches will help your organization attract and retain talented individuals, fostering a workplace filled with satisfaction and productivity. Want more recruitment ideas? Contact us to learn about the latest employment trends and recruiting strategies!