When assessing company goals and fiscal responsibilities, it’s important to consider employee compensation and benefits. The middle of the year is the perfect time to make adjustments to ensure you meet yearly goals.
An excellent compensation plan is the best way to attract and keep good talent, which is the backbone of any business. Even small companies without the income that corporations enjoy can create a compensation plan to compete in the overall market. Consider the following ways to create a strategic plan for employee compensation and benefits.
Review each employee’s progress in achieving work objectives and provide positive feedback where necessary. The middle of the year is the time to create new end-of-year goals and to see who’s performing to the best of their ability.
Identify any company issues affecting the employee’s performance. You can accomplish this by sending out a workplace survey. You can also get a perspective of what Canadian workers are concerned about by studying the 2019 Staples Canadian Workplace Survey. This survey provides insights into the current state of the workplace and what employers can do to improve it.
Setting a Budget
Valuable employees pay for themselves in terms of compensation and benefits, and if you aren’t compensating them, they will look elsewhere. Take a realistic look at what you can spend on each employee, then check to see what the competition is paying by talking to others in the industry or using an online salary calculator or a website like Salary.com or Glassdoor.
According to GGFL Chartered Professional Accountants, for every dollar an employer invests in an employee, the employee must generate at least $3.15 in revenue. Factor in your operating costs and how much each employee costs the business. These costs include:
- Sick days
- Health and paid leave
- Severance costs
- Liability insurance
- Worker’s compensation
- Health care
Implementing a Compensation Plan
Write out and incorporate any new changes into your fiscal budget. This plan should include specific numbers to avoid any confusion among employees. List the number of sick and vacation days each person is entitled to and discuss paid holidays and the approval process for overtime. Mention any changes to the benefits package, including health care and retirement. Clarity helps keep employees motivated.