Recruiting and Retaining the Best Employees
Recruiting the best - BE CREATIVE! Be sure ti balance the cost of attracting the best talent with your market. You may want to consider paying 15 - 20% higher than the market for hard to find employees with high demnand skills, and pay 15 - 20% below market rates for employees if there is an abundance of of workers and if your job openings require low skilled workers. The secret is to advance them quicky as their productivity rises. Depending on the economy, type of industry and competition for workes pay only at the going rates.
Another recruiting tool may be bonuses based on skill and productivity acheivement, sign-on bonuses if a new employee stays on the job for a set period, i.e. 3 - 6 months. At the same time it is a good ides to consider increasing the existing workforce by a reasonable percentage to retain currrent employees who alrweady posses the requisite skills.
Another strategy is to reward mamangers by their recruitment and retention success. Spot bonuses can incent mamangers to develop strtegies to get new hires up to speed quicker. As productivity increases, you can adjust managers base pay and increase their valiable pay as a reward. As a general rule, senior management compensation packages should be about 45 -50% base salary and the balance consisting of bonus, benefits and other perks and deferred compensation.
Retaining Key Employees - Rethink automatic pay increases
Rather than giving employees annual or cost of living pay increases, consider performance based compensation systems or skills based pay systems. Reward employees on how successful the are at acheiving specific goals and objectives through a performance management system. MAke sure the plan is reviwed and updated on at least an annual basis in order to compensate for uncontrollable factors, changes in business plan and economic environment.
Carefully define pay ranges and advancement opportunities. When employees reach the top of their pay range consider annual lump sum bonuses, switching them to performance based pay, or transfering them to other jobs with a higher pay scale. Another idea is ti make them a mentor to new employees and compensating them baed on new hire acheivement and retention.
Adjust wages for new hires based on labor market demand. If the market for highly skilled employees is competetive, consider LOWERING base compensation by 10 - 15% but add new low cost, but highly desirable benefits like extended vacation time, or flex-time or floating holidays.
The days of employee loyalty are long gone. Employees today are more focused on personnal needs and career track than they are company allegiance. Think of your employees as free agents and be creating on how to keep them on the job and productive.