Is Competitive Compensation Attracts and Retains Talent?
Without a competitive pay structure, companies struggle to attract and retain talent. To decide the correct compensation for employees, it is important to look at what kind of talent the business needs which perfectly suits your business. Talent with high price is not necessarily a sound strategy!
In the long term, no business can pay its employees more than the value added to the business. IT, Ecommerce sectors are paying good salaries on one side but on other side manufacturing sectors have their limitations to pay good packages due to their heavy manufacturing expenses.
Compensation and benefits depends on the value a person contributes to the company. However a competitive pay structure is very important factor to attract and retain all talent but simultaneously it is important that Compensation policy must have a correct mix of fixed and variable part to motivate employees alongwith Health and Medical insurance benefits. Even if the organizations have all above but another challenge is that the company is regarded as a great place to work?
Business Heads needs to have a clarity of the employee they want to attract, and the nature of the business, to decide on the compensation positioning. Following the pattern in the talent market would lead to waste and strategies will not survive for a long!