Compensation is the foundation of your total rewards model and critical to driving outcomes for your organization. However, developing an internal compensation function can be challenging. There are some barriers to developing and implementing a robust compensation program such as budget, time, expertise and even your own desire to manage the work.
Your compensation program should:
- Attract and retain talent
- Competitive and equitable—internally and externally
- Incentivize high performance
- Support your compensation strategy by maximizing investment
Hiring a compensation consultant can give your leadership and human resources teams the foundation and partner you need, without adding headcount and fixed cost. Here are just a few ways outsourcing compensation work can help your organization.
Get the work done
Hiring a compensation consultant to outsource this work allows you to have a sophisticated compensation program without hiring an employee. This means a few things to you and your HR team:
- On-call compensation consultant in your back pocket
- No long-term commitment to hiring a full-time employee
- More time to focus on other areas of your HR strategy
Payroll is already a big line item in your budget. Here are a few ways outsourcing compensation can save your organization money:
- No employee salary or onboarding costs that would come with a new hire
- Expensive salary survey data is included in the service fee
- Advice on how to target investments and identifying cost savings
Evaluate program performance
A partner will regularly evaluate your compensation program and provide recommendations for improvement—a key component of a successful compensation strategy. There are a few ways you can evaluate program performance:
- Compensation benchmarking – how you compare to market
- Pay equity analysis – how fair pay is among employees at your organization
- FLSA status audit – classifying your positions correctly as exempt or non-exempt
- Incentive plan evaluation – how well incentives or bonus programs are motivating employees
A compensation strategy is a big rock to move for your organization but can be costly if not well executed—both in time and money. It may just be worth bringing in a compensation consultant to take work off your plate and provide a depth of knowledge and resources you may not have access to otherwise.
Written by Megan Nail, VP of Total Rewards Practice. If you’re looking to make some adjustments to your total rewards strategies to mitigate potential talent challenges, feel free to drop her a note or reach out on LinkedIn.