The disruption caused by the Covid 19 pandemic has caused a massive shift in the fortunes of countries and companies globally. And this in turn has affected employee compensation and salary calculations to think about structures beyond cash. Is Cash Really King, when it comes to attracting talent? What salary calculator should you use? How are employers finding innovative ways to structure compensation?
In our recent survey conducted online, 44% of the 300 respondents had suffered financially due to the pandemic. Interestingly, 23% of respondents had been fortunate enough to see their compensation increase.
These results would suggest that the coming months will see a flurry of activity in hiring as employees whose earnings have suffered seek to find better opportunities, and those companies that are thriving seek to add to their teams.
However, the reality seems to be somewhat different and there appears to be far more resistance to change. There seem to be some common themes as to why.
- Uncertainty breeds Indecision – many employees are unwilling to make drastic changes at this time. Moving to a new employer is perceived to be riskier in the current environment.
- Income matters, not Compensation – for many employees, a reduction in compensation has not necessarily meant a reduction in income, as the new work from home norms result in lower expenses. Salary structures, and how salaries are calculated will be an important factor in candidate decision making.
- Time over Money – the increased flexibility provided by working from home and extra free time this allows, has resulted in a better work life balance than before.
- Loyalty – well run organisations have been able to retain staff by having a great work culture. Employees value the organisation for more than just the salary, especially in difficult times.
- Clever Compensation – Many companies establish a connection between employees and the organisation through ESOP schemes, pensions, long service awards, and other incentives. This connection serves to tie employees to the company. The impact of any changes to the fixed salary is far less important than the overall long term earnings potential.
Interestingly, the companies that are facing the greatest recruitment challenges are often those in industries that have thrived during the crisis. Despite offering enticing increments, joining bonuses, and potential benefits through ESOPs or RSUs, candidates show reluctance to make a move.