Coming out of the recession, our trade association client was rapidly expanding. Market research helped us quickly identify candidates to fill a variety of positions. Yet regardless of the position level or functional area, we found that the most qualified candidates were consistently earning a total compensation package our client could not match.
Because salary budgets had already been approved, hiring managers across the organization had a dilemma. They could settle for hiring the less qualified candidates they could afford. Or they could try to get approval to go over budget, so that they could make competitive job offers to the top performers who could achieve the desired business outcomes. (In our experience, it's rare for managers to challenge “hard” budget limitations. Instead, managers quietly accept their salary targets, and, unsurprisingly, their less qualified new hires often fail to achieve their goals.)
Over just a few years, our client had unknowingly gone from an industry leading salary and benefit structure to an industry trailing package, but the executive team was unaware of the issue. In the past, when candidates turned down job offers or counteroffered, the senior executive team had simply assumed it was an isolated incident, and not a systemic issue.
When Staffing Advisors conducts a search, before we present candidates, we brief the client on the market factors that will affect their ability to attract and retain their new hire. For example, when skills are in high demand, it's easy to overpay out of desperation, or mistakenly underpay based on outdated information. To mitigate that risk, we work closely with outside compensation experts to ensure that the client knows exactly what compensation is needed to retain a top performer. In this case, it quickly became clear that our client's compensation and benefits package was a hindrance, and preventing them from being able to make competitive job offers to the best candidates.
The Result Of Our Work
Because hiring managers often struggle to find a framework to talk strategically about compensation, we often consult in this arena, helping leadership teams wisely allocate precious budget dollars to the areas where it will have the most impact. Within a month of surfacing the issue, our client revamped their compensation strategy, resumed their industry leadership, and hired more than ten people.