A recent CNN story highlighted the results of an executive survey that showed
“…nearly all were looking to hire, with several indicating an interest in expanding headcount aggressively to meet demand.”
As payroll is the single biggest cost component for most companies, doesn’t it make sense to establish an adequate foundation for compensation management decision making prior to expanding payrolls once again?
Our experience and studies show that job and pay creep represent 10 – 15% of a company’s total payroll. As for your current staff, realize that 1/4 of turnover above 10% is compensation related. In other words you need to be externally competitive and internally equitable in order to make sound compensation decisions.
Our experience in Market Pricing vs. Job Evaluation can explain the value of sound methodology for compensation management decision making. Consider this as a first step in preparing for recovery.