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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

Compensating People Goes Way Beyond Cold Hard Cash

Written By: Ben Baker | Comments Off on Compensating People Goes Way Beyond Cold Hard Cash

There is a war on talent, and this is a healthy thing. Organizations are waking up to the realization that getting the best talent, who not only excel at what they do but will communicate the organization’s value, both inside and outside the firm, is an investment, not a cost center.

The challenge I hear from Human Resources professionals and CEOs alike is they are being priced out of the market. The truly talented people they desire to hire are demanding wages dramatically higher than they were two years ago, creating concerns about return on investment.

In those conversations, I first ask employers whether they want to merely obtain these people – or retain them over the long term? How long do they believe these people will stay, given the firm’s current culture and other realities, and do they have the systems, policies, people, and opportunities available to keep these high performers engaged?

If you spend an extra thirty to fifty thousand dollars to obtain top talent, but they are gone in a year because someone offers them another thirty thousand to leave you and join them, how well has your money been spent?

We must alter our thinking to believe that compensating people goes way beyond cold hard cash!

The focus needs to be: What will it take to make this person feel listened to, understood, and valued?

What will it take to enable them to believe that you have their specific interests at heart, and they have the opportunity to earn a wage and feel they are making a difference?

What problem can you solve for them to enable them to do the things they want to do?

The interesting thing about money is that money has no soul. It is a way to keep score, increase purchasing power, or relieve people of the stresses incurred by debt.

Money is a resource that enables you to do things; it does not do anything on its own.

Therefore, what if, instead of just throwing more significant sums of money at people, we found out what would make their lives easier or better?

  • What if you could provide medical benefits on day one and help them protect their sick child?
  • What if you could provide them with an Uber or Lyft to get to and from the office so they did not have the stress and anxiety of driving and could concentrate on other things?
  • What if you could give them three paid days off a month to go and take care of their parents?
  • What if you could have their groceries delivered?
  • What if you could pay off or pay down their student debt if they stayed with the organization for an agreed amount of time?
  • What if you could help them work on a pet project that stimulates them and could benefit the company in the long run?

Compensating people includes understanding what motivates them. What challenges are they currently facing, and what will help them solve those challenges?

Financially, doing so will be less real cash out of reserves than paying someone that extra thirty to fifty thousand annually, and it will have more far-reaching effects. These people will stay longer, be more loyal and dedicated, and attract like-minded top performers like them to work for you.

Gallup says the cost to replace a top-performing employee can be one-half to two times their annual salary. Therefore, whatever you can do to make these people feel wanted, needed, and valuable, which makes them more likely to stay, is an investment in your organization over the long term.

These people will become the best advocates of your brand. They will tell everyone how innovative and forward-thinking your organization is, drawing more loyal and profitable clientele.

In today’s world, we need to stop thinking in old paradigms. What may have worked before 2019 is not necessarily gospel today. We need to look at our employees not as “human capital” but as human beings. Each is motivated by their wants, needs, and desires. Each has their fears and aspirations.

The more we can have conversations with them about these things at the very beginning of the journey (as well as on an ongoing basis), the more chances we have of designing a compensation plan that aligns with their wants, needs, and goals, and allows both employer and employee to move forward profitably and enjoyably together.

Here is a resource that you can use to ask the right questions to stem the tide of the Great Resignation.

Ben Baker is the CEO of Your Brand Marketing. A strategic communication firm designed to enable you to align your internal teams with change management initiatives and other issues, allowing you all to move forward profitably together. 

Photo by Giorgio Trovato on Unsplash

Article written by
Ben Baker is a communications strategist, the storyteller of your brand and the author of “Powerful Personal Brands.” He believes that every brand needs to stop acting like a commodity and instead be a brand worth loving. You can contact him at www.yourbrandmarketing.com.