Compensation Considerations in Attracting Top Talent
Company management, and human resource departments in particular, are often guilty of treating talent management solutions as five or more separate processes used to build a strong employee base. However, it is the integration and flow between all these applications that when correctly used allows exceptional organizations to leave their competition in the dust. Consider how compensation planning and management factors into every facet of an individual business.
Let’s start with recruiting, how does one attract and bring top talent to an organization? Famed management consultant Peter Drucker once wrote that only 1/3 of hires are actually successful. The process generally breaks down in one of three areas.
Not Knowing What You Want
Rarely do companies have a written model of the ideal candidate for every position. This is not a job description. This is where you interview those already successful at the position in your company and document their personality traits, work habits and approach to the job. Also know what you will have to pay. According to the Association for Talent Development, almost half of recruiters indicate that employers still don’t realize that great candidates will no longer accept the low salaries that were customary during the recession.
Too often companies skimp on the screening and assessment process and regularly serve bad prospects right into the interview process. Whether someone is underqualified and too green, or over qualified and too high paid, this should be caught at the beginning. Managers tend to be good at closing a deal, but rarely have the time to weed out bad candidates. If you are not serving up viable candidates, impatience and fatigue might let a poor choice slip through.
It’s alright to have the occasional short stint on a resume, but when you see a pattern of less than 18 month tenures at many previous companies, it is usually a red flag. Without a full fiscal year under their belt it’s hard to determine how an individual really did against targets. What was their target income during their tenure and how much did they make demonstrates how well the job was done.
Compensation history, industry comparisons, and pay for performance are all items that should be considered before you extend and offer. Otherwise you will end up writing a check and getting little in return.
For more compensation planning best practices, view the resources in our Compensation Planning Learning Center.