How to Create a Dynamic Compensation System Adaptable to Changing Business Needs
A wise mentor once told me, “To an employer, the ideal employee is one with superior skills, genius-level creativity, and boundless motivation who will gladly work 24 hours a day, seven days a week for no money at all. To an employee, the ideal employer is one who will pay a ridiculous amount of money, never require you to come into the office, nor ask you to produce anything of actual value.”
Of course, as this is not an ideal world, actual business is conducted somewhere in the middle of these two extremes. Even so, the Overton Window in this eternal struggle between employee desires and employer needs has shifted over the decades. Example: Gone are the sweat shops and smokestack factories of the 19th and early 20th centuries. Back then, workers sometimes toiled for 16 hours a day, six days a week for literally pennies. At the same time, the lavish gourmet lunches, electronic game rooms, and on-site health spas that were all the rage in Silicon Valley only 20 years ago seem to have gone the way of Palm Pilots, 3D movies, and Blackberry telephones.
Ever since The Great Resignation of the early COVID-19 pandemic, there’s been tremendous focus on the issue of workplace “flexibility.” This concerns work-from-home options and adjustable schedules. Considerable attention centered on just how much flexibility companies can actually provide. Case in point: In 2022, management consulting firm McKinsey & Co. issued a report showing more than half of all American companies were, in fact, now offering such options—and that workers wanted more of them. Meanwhile, a recent workplace survey from Deloitte revealed, among other things, that when such flexibility options are offered, more than 82 percent of professionals use them. Importantly, nearly half—or 43 percent—claim flexible hours improve their mental health, morale, and overall job satisfaction.
All well and good.
A happy workforce is a productive workforce. High job satisfaction is also linked closely to low rates of turnover. But businesses have economic targets to hit, schedules to keep, and customers/clients to satisfy. And such demands don’t always square with the needs of company staff. Meeting a deadline, winning a contract, or simply having someone to answer the phone often comes with inconvenience and even personal sacrifice. Or as some Old Timers like to say, “Work is supposed to be hard. That’s why it’s called work.”
So how can a forward-thinking organization like yours reconcile two seemingly opposing sets of interests? Recognizing companies need engaged workers to function and that workers need stable, profitable companies to work for, how can one strike a sustainable balance between such forces?
Here are some ways companies can achieve both flexibility and stability when it comes to workplace protocol, especially compensation:
Codify your company policies. The key to an effective, flexible program is, ironically, communication, discipline, and accountability. Just like a “free country” like the United States still has laws and an enforcement apparatus, your company should also provide its employees with as much freedom and flexibility as they desire so along as limits are set, understood, and enforced, especially around pay. Flexibility doesn’t mean a free-for-all.
Establish a hybrid schedule. Many companies have pulled back from the full work-from-home policies of Early COVID. Instead, they have adopted so-called hybrid schedules whereby employees can work from home part of the week but must come into the office on other days. This way, leadership can schedule in-person meetings and conduct valuable one-on-one training while still saving workers the headache and expense of daily commutes, allowing them to achieve a better work-life balance.
Make flexibility work for you. Companies like retail and restaurant chains employing a large cadre of lower-paid service workers should contemplate moving staff from store to store to respond to demand in specific locations. You can even consider teaming up with other businesses in your community to swap service workers such as cashiers and warehouse personnel as needed. This can prove particularly useful during holiday periods when customer demand exceeds the annual norm.
Use flexibility to reduce operating costs. Having fewer people “at the office” at any particular time can allow your company to lease smaller commercial spaces and then divert the savings into areas that can improve company productivity, such as incentive-based bonuses.
Develop an employment “menu.” Who says employment must be “one-size fits all”? Instead of offering a set package of salary and benefits for each position at your organization, tailor schedules and remuneration around the needs of each person you choose to hire (or retain). This may seem extreme, but many large companies have been doing this kind of thing for decades—perhaps unknowingly—by hiring full-time, part-time, and seasonal staffs to meet their own changing needs. This just takes the idea down to the personal level.
Developing a company culture that supports both company stability and personal work-life balance can be a challenge. That’s where I come in. As a veteran corporate culture and compensation expert, I can help you create and manage a recruitment/retention program delivering top talent while promoting company growth and profitability. To learn how I can help your company prosper, even in uncertain times, contact me at laura@conoverconsulting.com.