How many times have employees approached you asking for a raise because the competitor across the street is paying $1 more per hour?
Living in the “oil and gas” marketplace we have seen this trend come and go many times over the years. Currently we are in a down market and most people are just grateful to be employed but you can bet when the price of oil comes back we will be back into the pay escalation trend very quickly!
Many times as business leaders we get caught up in a moment of panic when our prize employees are threatening to leave us and walk across the street to a competitor for a few bucks more per hour. I think we have all been guilty of capitulating and matching or marginally beating the competitive offer. We breathe a big sigh of relief and the temporarily happy employee gets back to work . . . until the next offer hits their desk! So, what should we do when this happens?
When we are just looking at dollars per hour we are selling our businesses short. We need to be looking at the complete compensation package that is being offered.
Pay consists of a lot more than a person’s hourly rate! There are benefits, fringe benefits, training, extended health care, insurance, etc.. Take a look at the list below for some examples of items that are part of a complete compensation package. This list is obviously not all inclusive and some of these are not applicable to all companies due to location, government legislation or type of business but the list provides enough ideas to build your own solid compensation package story.
- Base compensation
- Hourly wage
- Paid travel time
- Overtime pay
- Paid sick time
- Bereavement pay
- Uplift for adverse work conditions
- Percent of pay contributed to RRSP or 401K matching
- Long term
- Profit sharing
- Years of service
- Share ownership
- Dividend payments
- Short Term
- Achievement award
- Referral bonus
- Patent bonus
- Paid vacation that meets or exceeds legislated requirement
- 2, 3, 4 and 5 week vacation entitlement
- Statutory holidays
- Remember to include any stat holidays or “flex” days above and beyond the legislated requirement
- Telecommute options
- Flex time arrangements
- Dry cleaning pickup
- Casual dress
- Restaurant discounts
- Gym membership
- National park passes
- Professional sports team tickets
- Passport fee reimbursement
- Catered breakfast and lunches
- Soft drinks/water bottles
- Christmas party
- Kids Christmas party
- Summer BBQ lunches
- BYO device support
- Monthly special project day
- Free parking
Employer Portion of Payroll Taxes
- Employment insurance
- Pension plan
- Worker’s compensation
- Short term disability
- Long term disability
- Dental coverage
- Health insurance
- Extended health care coverage
- Life insurance
- Professional liability insurance
- Health Flex Account
- Professional association fees
- Tuition reimbursement
- Technical training
- Leadership training
- Soft skill development
I have seen case studies that have shown that a complete compensation package adds an equivalent of 29% to the base hourly salary. Note that this 29% is for a standard professional services business and not an anomaly like an oil giant or Silicon Valley tech firm.
Every business has benefits, fringe benefits, perks and other things that can be used as differentiators in the marketplace. Spend some time defining your complete compensation package and then explain it to your employees so they understand the full picture of what your organization offers.
What does your employee compensation package look like? Do you have a complete package or do you need to shore up your compensation in some areas? Are you educating your employees on what the complete picture looks like?
Download the Compensation Model PowerPoint template from the Business Tools page.
Leave a comment on your compensation package experiences below.
“I have never found that pay and pay alone would either bring together or hold good people.” Harvey S. Firestone
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