Dear Workforce
Q: How Do We Reduce Our Starting Pay Without Compromising Recruiting
We want to reduce our starting salaries without compromising our ability to recruit top candidates. What are some alternatives we can offer people in place of higher wages?
A:
Dear Pressed by Pay:
The reasons that people accept positions with a company vary widely, with pay being one factor as a candidate evaluates an offer. Alternatives to higher starting salaries are numerous, but at their essence should be determined in light of your company's business strategy and human resources philosophy.
Are you a firm that can recruit and retain based on your corporate mission and vision (innovative, philanthropic, community service, religious, etc.)?
Does your firm have a reputation for providing employees with intrinsic benefits on which you can build a brand image?
How important is work/life balance, and do you walk the talk?
Can you provide employees with highly competitive noncash benefits instead of cash?
Are you able to provide a wealth of technical or other training and developmental opportunities?
Is your company a fun place to work?
The point: Don't attempt to replace high starting salaries for recruits with something that will not fit with your company's culture. The result will not be what your management is expecting.
Also, don't interpret the current "buyer's market" in labor for some jobs as an excuse to make low-ball offers to all candidates. Although this may work to hold down costs in the short run, it could be detrimental to long-term business performance. In this type of labor market, experienced candidates may accept any offer, even one involving pay cuts, but won't be content until your company addresses this imbalance in some other meaningful way.
Before embarking upon this strategy, it is appropriate to analyze why it is important to management to reduce starting salaries. What are the important considerations in this decision? Once your company has outlined the business reasons changing its pay policy, your human resources department then needs to communicate it to managers, as well as adjust your recruitment strategy. In these difficult times, it is critical to not to be "penny-wise and pound-foolish" with pay. Experienced candidates, as well as high-performing employees, should be identified and compensated appropriately.
SOURCE: Bob Fulton, The Pathfinder's Group Inc., Glenview, Illinois, November 19, 2008
LEARN MORE: Changing of pay practices is a hot topic amid the financial crisis. Some companies are slashing raises and planning layoffs, perhaps to weed out low performers.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
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