The cost of competing: An equitable compensation strategy

It seems everyone is talking about employee compensation trends right now, and for good reason. The upheaval created by COVID-19 generated an incredibly competitive job market, and job candidates are calling the shots on their compensation and benefits expectations. With the cost of living rising in the current economy, staying competitive with compensation has become all the more challenging.

Although pay inequity has been a decades-long conversation, the pandemic exposed the proliferation of the problem on a global scale. Across the world, companies were forced to acknowledge how existing inequities spurred the exodus of millions of women from the workforce — now dubbed the “she-cession”–and the disproportionate hardship experienced by historically marginalized workers. The new demands of working during the pandemic – more virtual meetings, increased after-hours workload, and the challenge of working from home while caring for children who were also in the home – only further taxed workers of all genders. Now that the dust has settled, these same workers and many others are rightfully asking employers to do better.

In response, competitive employers are making changes, starting with their compensation strategies. Specifically, employers are revisiting their established pay scales for both open roles and currently filled positions. According to a recent XpertHR survey on compensation practices, 78% of employers rated offering better pay as a “high” priority this year, while 68% have prioritized ensuring pay equity.

A comprehensive compensation strategy is an indispensable tool that employers use to retain or grow their workforce. Importantly, compensation strategies can also be used to ensure that wages and benefits are equitable. But developing such a strategy is complicated; it is dependent on data and must account for relevant employment laws, budget, and compensation trends in the marketplace. Read on to discover how to develop and maintain a compensation strategy that will help your business remain competitive and an employer of choice.