Hiring in North America has not been this challenging in a very long time. The employment rate is at an all-time high, and top candidates have been able to negotiate great packages for themselves as some get multiple offers. As you start looking for the next superstar to further your company’s goals, deciding how hard you can compete for talent is important. While there are trends making candidate relationship-building easier — such as text communication to schedule interviews or being able to offer more flexibility to the work schedule for some roles — money is still a primary driver for candidates.
An important lesson many learn is that salary has traditionally been king. And this king is powerful because it compounds year over year on your list of expenses. Not every company can spend more now, but every company wants to attract and retain the best talent for their team. This is where the candidate experience and your employer brand can be a strategic differentiator as you explore your flexibility to spend money.
If we go back to cash being king for a moment, it’s important to remember that people don’t come to work just for money. Everyone wants to feel valued and work on interesting things for a great brand. As you think about experience, there are a few ways to minimize the amount of extra cash you need to help candidates consider your company over others.
Understanding one-time costs versus compounding costs is a good starting point. If you can give someone an upfront, one-time cash bonus, it will save your company money year-over-year compared to a larger starting salary.
When you get into their second year of employment, having to raise salary by a percentage compounds the cost and can add much more to your operating costs than a one-time payment. Even hourly employees in lower earning roles that are in high demand can be swayed with small cash bonus up front to help you gain a competitive advantage.
As you approach your budget and talent needs for the next few quarters, you may find you have less flexibility to offer bigger salaries to help you win the talent war. While everything has some cost, there are alternative areas you can invest in that cost much less and will not steadily rise like a salary does.
Here are 8 of them that might help you:
1. Offering flexibility – Whether it is the start and end time of the workday, a compressed work week, or the offer to work from home at times, these are all coveted offerings. If the job allows for flexibility, it’s worth considering.
2. Covering perks – There are tons of creative offerings that matter to employees and are often available at a small cost. A few examples are: subsidies for public transit, extra uniforms included on the company, meal services at work or delivered to the household, a monthly budget to use ride-sharing services instead of commuting, free or discounted laundry/dry cleaning, popular gym or lifestyle club memberships or discounts.
3. Job sharing or part-time work – Many people have their own reasons for wanting to work less than full time. Offering part-time or job-sharing options where 2 people perform what was once a full-time job can give you more coverage in talent, and attract some amazing candidates who wouldn’t otherwise be interested.
4. Having good managers – A positive workplace culture is a competitive advantage. If you invest in managers who care about their teams and prioritize teaching and coaching employees, you will be able to attract, develop — and importantly — retain your top talent. It’s been proven many times that people work for people, not companies, so make sure your managers are good listeners, care about their people, and can show empathy.
5. Offering hiring bonus/signing bonus – Because these are one-time costs, they don’t compound like salary does. A bonus can help you counter another offer and be equally attractive up front as many bonuses can be paid within the first 3 months and can have a condition of repayment if the employee leaves before a set amount of time. For hourly workers, a few hundred dollars up front can make a big difference in whether they decide if they want to join your organization.
6. Starting benefits coverage earlier – The traditional model for health care benefits in Canada and the United States has been to delay offering benefits for 90 days to get through a probation period. If you can offer these from day 1, especially in the United States where bridging health care costs can be very high, this is a great employee incentive. A company could also offer to reimburse existing health costs or pay for the previous employer’s benefits until the transition occurs.
7. Reimbursing education costs – Another great non-compounding benefit is education subsidies. Skills change quickly, and the investment in learning benefits both the employee and the company in the long term.
8. Having modern work tools – This one may seem obvious as computers are a standard today, but in this bring-your-own-device era, offering a broad range to choose from or solid reimbursement plans for employees to have the latest and greatest is a draw. Think about workstations, cool collaboration spaces, high-quality headsets, dual monitors, choice of office chairs, and health snacks. These are all things that attract candidates looking to have a positive work experience.
Remember, money does reign as king. If you offer 30% less salary than your competitor, even this list will not help you win the talent war. However, if you offer 30% more salary, your balance sheet might start to look a little funny and it will be difficult to sustain making above-market salary offers for many roles.
The market is competitive and being creative with the advantages you can afford will help show candidates you care about their experience and that you understand what matters to them from a total offering perspective.
About the Author: Jeremy Eskenazi is an internationally recognized speaker, author of RecruitConsult! Leadership, and founder of Riviera Advisors, a boutique Recruitment/Talent Acquisition Management and Optimization Consulting Firm. For more information on Jeremy Eskenazi, please visit: www.RivieraAdvisors.com.