Higher compensation is part of the ransom for dealing with the pandemic for most American companies and industries. So salaries, wages, benefits and perks will cost them more\u2014perhaps a lot more\u2014in the year ahead.<\/p>\n
The way CEOs and CHROs can make sure the Great Raise works to their companies\u2019 advantage is to be proactive, creative and equitable about it. Yet they also must weigh strategically the demands of the moment with their long-term compensation strategy.<\/p>\n
\u201cThis is a time for real balance when it comes to how you deal with retention and attraction,\u201d said Paul Knopp, chair and CEO of KPMG US. \u201cWe all have to make sure we meet the market when it comes to base compensation, but the market has changed in a way that you also have to look at those benefits that are most attractive to employees for their careers.\u201d<\/p>\n
While median full-time earnings of $1,001 per week in the third quarter of 2021 were nearly 9% higher than two years earlier, according to the Labor Department, expectations for 2022 remain frothy given the tight market for talent, the free-agent ethos encouraged by remote work, the geographic reshuffling of workers and decades-high inflation. U.S. wages will increase by 3.9 percent in 2022, according to the Conference Board, the highest rate since 2008.<\/p>\n
The compensation surge is occurring at the high end, at a low end that\u2019s getting higher and everywhere in between. Goldman Sachs, for example, is offering paid leave for pregnancy loss and expanding the amount of time employees can take for bereavement leave while also boosting its retirement-fund matching contributions for U.S. employees to 6% of total compensation, or 8% for those making $125,000 a year or less.<\/p>\n
Meanwhile, at Tyson Foods\u2019 chicken-processing plant in New Holland, Pennsylvania, the company has started offering a three-day workweek, plus pay for a fourth day that retains employees\u2019 status as full-time workers. Just for good measure, Tyson has created a $3,000 sign-on bonus for new hires.<\/p>\n
\u201cWe\u2019re in a bidding war for talent that will go on for a long time,\u201d said Alan Beaulieu, president of ITR Economics.<\/p>\n
For CEOs and CHROs, several new factors demand their attention along with the overall spike in compensation. They include:<\/p>\n
\u2022 The end of retention. <\/strong>The \u201cidea of a long-term commitment to one employer has been dead for a while, but it\u2019s really dead now,\u201d said Dave Roberson, CEO of the RoseRyan financial consulting firm. \u201cYou must have a stream of people. Assume you\u2019re going to be replacing people. So how do you keep the people you have, if you can, but also bring the next group in?\u201d<\/p>\n \u2022 High-balling. <\/strong>A deal to recruit someone may not really be a deal these days. \u201cYou\u2019ve made an offer and you think you\u2019ve got a hire, and then they\u2019re asking for $5,000 or $10,000 more,\u201d said David Lewis, CEO of OperationsInc, an HR consulting firm. \u201cNow you have to ask yourself what makes more sense strategically: say no and hold the line and lose the candidate and restart the process, not knowing how that will work out? Blow up your compensation structure? Or as a Band-Aid, give that person a sign-on bonus in hopes that the package will get them in the door?\u201d<\/p>\n \u2022 Need for equalization. <\/strong>Recruiting with higher compensation also requires boosting pay and benefits for retention. \u201cYou need to be mindful of what you\u2019re paying others in the organization and understand the detrimental impact it will have when you bring someone in alongside a tenured employee,\u201d Lewis said. \u201cOperate on the idea that everyone\u2019s salary is basically posted on the pantry door in your office.\u201d<\/p>\n \u2022 A focus on mental health. <\/strong>The pandemic, anti-contagion measures, and the takeover of remote work has left many Americans isolated, confused, lonely\u2014or at least disjointed. And they expect their employers to help them cope and adjust.<\/p>\n \u201cMental health is a real thing, regardless of how [a previous generation of leaders] feel and what we did,\u201d said Jeffrey Immelt, former CEO of General Electric. \u201cParticularly post-Covid, it\u2019s something worth your time to try to understand.\u201d<\/p>\n Many Fortune 500 companies already offered mental-health benefits, but by now \u201cmental health is just a place setter: You\u2019ve got to have it in place to be competitive in the market today, across the board,\u201d said Richard Chaifetz, founder and CEO of ComPsych, a large provider of employee-assistance programs. \u201cCompanies understand the importance of keeping their people functioning at the highest level.\u201d<\/p>\n Codility, for example, has begun supplying all employees with 27 days of paid time off per year plus four mental-health days, which don\u2019t have to be approved. \u201cWe\u2019re offering these days in addition to personal-time-off days to recognize and bring to light the importance of mental health,\u201d said Natalia Panowicz, CEO of the platform that evaluates the skills of software engineers, with its U.S. hub in San Francisco.<\/p>\n CHRO360.com asked a dozen CEOs, CHROs and other top executives about their compensation strategies and practices for 2022. Here are some of their ideas:<\/p>\n CEO<\/p>\n Rushdown Revolt<\/p>\n Video-game maker<\/p>\n New York City<\/em><\/p>\n We started as 12 part-timers, mostly people who were giving me their moonlight hours. That\u2019s not a lot different from now, except now we have 75 people. The magic of what we do is that we don\u2019t recruit anybody. We\u2019re just a magnet. We let people come to us.<\/p>\n When it comes to compensation, some say they wanted to volunteer, that they weren\u2019t expecting compensation. But we never, ever allow people to volunteer their time for us. So we say our company minimum wage is $15 an hour, and if you insist, we can pay you that per hour.<\/p>\n But generally people come to us with an expectation of compensation because they see that we\u2019re making money. When compensation came up, we\u2019d say, \u201cI don\u2019t know what your skill set is. I\u2019ve never hired you before. How much do you think you\u2019re worth, and how much do you need?\u201d<\/p>\n If every hour we\u2019re compensating them for the amount of money they want and need, if someone is part-time and only giving me 10 hours a week, I\u2019d argue that they\u2019re giving me their best 10 hours. Because they\u2019re getting paid what they want and doing things that they want to be attached to and be part of.<\/p>\n There\u2019s no pattern to the compensation requests. If their number is too low, we\u2019ll say, \u201cAre you sure? Are you just giving me a low-ball number I\u2019ll say yes to?\u201d If it\u2019s high, I don\u2019t talk them down, but I ask them to justify it, and if the justification isn\u2019t adequate, what I say is, \u201cHow long do you think you\u2019ll need to prove that justification? Two to three weeks? Then let\u2019s pay you two-third to three-quarters of what you asked, and if you prove it, we\u2019ll go up to whatever you said.\u201d<\/p>\n CEO<\/p>\n Bridgewater Interiors<\/p>\n Auto-seat maker<\/p>\n Detroit<\/em><\/p>\n We enjoyed very low turnover pre-Covid, but during the last two years we have had to replace probably one-third of our workforce at our largest facility, about the same number from termination as voluntary. So we\u2019ve had to work harder than ever to recruit.<\/p>\n Our most-tenured employees, who are the most highly trained, have had to pick up the slack, working record amounts of overtime and less-predictable production schedules.<\/p>\n In our upcoming negotiations with the United Auto Workers, we\u2019re trying to emphasize short-term bonuses rather than wage increases that get baked into our costs. But we have continued health insurance through the pandemic as well as our tuition-reimbursement program, and many employees have thanked me for that.<\/p>\n What I am hearing from new employees is that they\u2019re not as interested in benefits but rather in higher cash wages. We\u2019ve long touted benefits like our generous 401(k) matching and better medical coverage versus our peers, but we\u2019re finding that doesn\u2019t resonate as readily now as it did a decade ago. So I\u2019ve asked my team: Should we be looking at some kind of hybrid model of offering higher wages to people who want those and move those dollars from the benefits side to the wages side?<\/p>\n We\u2019ve also looked at providing childcare in a partnering arrangement where there could be a center developed near our facilities, and we would arrange for some sort of company subsidy or guarantee some level of attendance. The challenge with that is the auto industry runs around the clock, and you\u2019d need a daycare provider who\u2019d be committed to opening around the clock and provide legal, regulated, benchmark-standard levels of care to all those children in the off hours.<\/p>\n CHRO<\/p>\n World Insurance<\/p>\n Business and personal insurer<\/p>\n Tinton Falls, New Jersey<\/em><\/p>\n We onboarded about 800 employees in 2021 through acquisitions of small agencies and organic growth, but there had been no compensation modeling. Now we\u2019re building out our compensation philosophy with commission plans, incentives and bonuses, centralizing components and ensuring we have the right framework.<\/p>\n When we do an acquisition, we might retain their compensation model for a year or two years then slowly migrate, but make sure employees aren\u2019t taking a cut in pay. We are also capitalizing commissions into base compensation\u2014identifying what commissions would have been and what they will be, and recognizing roles that are moving away from a commission base.<\/p>\n Some agencies we acquire are smaller and may be below-market for total compensation. Now we\u2019re addressing those concerns. They need to be more front and center. We must do everything to retain our employee population. If they\u2019re woefully underpaid, or not at market, we risk losing people, and we don\u2019t want to do that.<\/p>\n Educating the owners of some of the agencies [we acquire] is a piece of this. As we partner with them, we are evaluating them and asking, \u201cDid you give people an increase this year?\u201d We\u2019re not telling them what to do but providing guidance about what to do.<\/p>\n We\u2019re also modifying and increasing our benefits, such as giving employees pet insurance. And making counter offers is a critical piece today, usually for high-end employees. They work better than they used to because not a lot of people really want to make a move in this environment.<\/p>\n Chief People Officer<\/p>\n Codility<\/p>\n Provider of skill-evaluation software<\/p>\n London<\/em><\/p>\n We really have to step back and be innovative and force ourselves to change. The companies that are going to win are going to be more progressive early and not fighting what\u2019s happening.<\/p>\n One thing we\u2019ve done is change our outdated compensation models that give higher pay to employees living in tech hubs like San Francisco and New York and lower compensation for areas inside the coasts. Now, we\u2019ve created a United States-wide salary band, so no matter where you live, the compensation is based on the role, not the location. You can go live and work wherever you want to.<\/p>\n We decided to approach compensation through a very human lens. People have seasonality in life, and maybe they are caregivers at different moments and want to live in different places. We want to be as flexible as possible, and this country band gives us that flexibility.<\/p>\n We are starting to see the same thing in Europe, where we have our headquarters in London and offices in Berlin and Warsaw, and employees all over, especially in Poland. People are wanting to live in the countryside of Spain but demanding a London salary. So we are transition to one European Union band and saying, \u201cHere is your rate\u2014live where you want to.\u201d<\/p>\n We are also seeing that with global warming, it\u2019s harder to get work done for people on the west coast of the U.S. and in Europe, because they didn\u2019t build homes with air conditioning. If you\u2019re sitting in a house at 90 degrees with no air conditioning, there\u2019s no way your performance is the same as someone with AC. Supplementing air conditioning isn\u2019t something we thought about before, but now we\u2019re very much having to look at those things.<\/p>\n CEO<\/p>\n Wyoming Machine<\/p>\n Sheet-metal fabricator<\/p>\n Stacy, Minnesota<\/em><\/p>\n Our wages have gone up by about 20% for the typical worker. When I found people I could hire, I knew they were being brought in at an hourly rate that was too high for what I was paying my incumbent workers.<\/p>\n My strategy has been to be proactive about that and not wait for [existing] employees to say something about it or give them a reason to look for another job. We\u2019re proactively making wage adjustments to make sure our incumbent workers are in line.<\/p>\n Employees will leave for more money. So they\u2019re very appreciative of it. But in my shop, I also know that people like working here, and I know they don\u2019t want to leave. I don\u2019t want to give them a reason. If they can get an increase in pay that\u2019s substantial, I know that I can cut them off at the pass. Retaining my workforce is my No. 1 strategy. They\u2019re already here, and I\u2019m going to do everything I can to keep them.<\/p>\n For that reason, we\u2019ve also been more generous as time has gone on with paid time off, offering it sooner than we once would have, especially for new workers. We recognize that it\u2019s healthy for people to be away from work and also, in the pandemic, people need to be away from work. Knowing they have some paid time off makes it easier for them.<\/p>\n CEO<\/p>\n Chemours<\/p>\n Chemical manufacturer<\/p>\n Wilmington, Delaware<\/em><\/p>\n In general our company hasn\u2019t seen the Great Resignation. And in fact, we continue to believe our focus on being a great place to work is serving us well, along with appropriate benchmarking on compensation issues.<\/p>\n Chemours\u00a0is<\/em>\u00a0a great place to work. We survey our employees every year, to improve our working environment from a compensation and benefits perspective. Also, from the [diversity, equity and inclusion] perspective, we\u2019re trying to make sure we tap into the full breadth of talent in our industry.<\/p>\n That means, for instance, we are helping people more with college loans. We are offering same-sex [marriage] benefits. We are providing more family leave for people who have kids. There is clearly an aspect of our benefits package that is evolving to be consistent with our strategy of making Chemours a great place to work.<\/p>\n Overall, we view compensation as something where we want to be either in the median or upper quartile. It\u2019s something we\u2019re very focused on from both a wage as well as benefit level. From Covid, there\u2019s been no fundamental change as it relates to us wanting to be in the median to top quartile.<\/p>\n We\u2019ve had to make some local adjustments where the labor market is more super-charged. For example, we see a lot of that in the Gulf Coast region, especially with oil prices coming back, and petrochemicals and refining. But it\u2019s very much a regional factor. So if industries are moving to a certain region, like the South, you have to make sure you stay current with local benchmarks.<\/p>\n CEO<\/p>\n Yuvo Health<\/p>\n Healthcare administrator<\/p>\n New York City<\/em><\/p>\n We\u2019re a year-old company that provides tech-enabled administrative solutions for community health centers across the U.S. that are specifically focused on providing primary-care services for low-income individuals. We have a team of about 10 people right now, and we have a number of open roles and positions where we\u2019re likely going to be tripling the size of our team in 2022.<\/p>\n Google can compensate well above the market rate. We don\u2019t have that since we\u2019re an early-stage organization. What we do have as levers aren\u2019t up-front financial compensation but equity, support in your role and a relatively flat organization where you can have significant autonomy.<\/p>\n A lot of individuals are going to be driven by the mission; that\u2019s the case with the entire founding team. We\u2019ve made sacrifices to create this organization. So you can come in at a meaningful position with a lot of decision-making.<\/p>\n But one of the biggest carrots we can give is, if you accept the lower pay and the risk that comes with an early-stage organization, you can have meaningful equity in the company. We have an options pool which is not to exceed 10% ownership of the organization, and as we grow and scale, we increase that options pool. For senior-level leaders, we do expect to be able to distribute up to 10% of the company to them.<\/p>\n Vice President of Human Resources<\/p>\n Webasto Americas<\/p>\n Maker of automotive sunroofs<\/p>\n Auburn Hills, Michigan<\/em><\/p>\n We had to recruit for several hundred new openings at a brand-new facility right at the beginning of the pandemic. So we instituted an attendance bonus. For those who worked all their hours in a week, we paid an additional $3 an hour. We really had to keep it short-term, so we paid it weekly. If you wanted to pay it every month, you couldn\u2019t do it, because people needed that instant gratification.<\/p>\n Otherwise they could get it on unemployment. With our pay rate, they could earn more to stay at home and collect unemployment, a significant amount more that they could earn than working for us. So we also had to increase our wages, and we increased them by more than 20% in some classifications [in the summer of 2020].<\/p>\n We\u2019ve filled all of our positions, but it\u2019s still a challenging market. We\u2019ve had to increase all our wages, with the lowest for a position being $17 an hour, on up to $30 an hour.<\/p>\n We also have offered stay bonuses of $500 a month for three consecutive months, up to $1,500. And for hourly employees we\u2019ve instituted a different attendance policy, where they can earn two hours of paid personal time for so many hours that they work consecutively with no attendance issues.<\/p>\n The key is the schedule\u2014we can prepare and get someone to cover. That\u2019s easier to do than just managing whoever\u2019s going to come in today. In this environment, that really has changed with our workforce, and it\u2019s tough to rely on our current workforce.<\/p>\n Chief People Officer<\/p>\n Project44<\/p>\n Freight-tracking software provider<\/p>\n Chicago<\/em><\/p>\n We have equipped and subsidized a van that we call Romeo, which employees can use to combine work with personal uses like family road trips. We cover the cost of the rental. It\u2019s a luxury van that comes equipped with a bed, a toilet and shower, Wi-Fi, device charging and a desktop workspace. And it\u2019s pet friendly.<\/p>\n We started it as a pilot project, and reservations were full within 10 minutes of when we posted it internally. Then we extended it into 2022. By the end of 2021, more than 20 unique team members completed or nearly completed reservations. They\u2019ve ventured out to places spanning Mount Rushmore and the Badlands; Rocky Mountain National Park; Salem, Massachusetts; and Pennsylvania. A pretty broad number of places.<\/p>\n It\u2019s something we\u2019re really proud of. It allows our team members the opportunity to work in a lot of different places while still being connected to us. And they\u2019ve appreciated the opportunities to stay connected, but also be connected in other ways with nature and other places in the world. They can maintain their perspective while also continuing to contribute to their role in a productive way.<\/p>\n When you place a team member at the center of what they\u2019d want in an experience like that, the value of it answers itself. It creates a comfort level where it provides the necessities for you to be able to continue to work, and you can work from anywhere. It\u2019s the best of both worlds. It\u2019s one thing to find that on your own but another to have that accessible to you via work, but done in a way that caters to you.<\/p>\n Country President, U.S.<\/p>\n Schneider Electric<\/p>\n Maker of electrical distribution and control products<\/p>\n Andover, Massachusetts<\/em><\/p>\n With our knowledge workforce, it\u2019s been about intentional flexibility. So, for instance, we launched a \u201creturnship\u201d program for women who\u2019d left the workforce but might want to come back even at reduced hours. That means 20, 30, up to 40 hours a week, and we\u2019re finding some incredibly talented people who haven\u2019t been in the workforce.<\/p>\n This program is available to men as well. If there\u2019s a field engineer who\u2019s been in the electrical industry for 35 years and he\u2019s now retiring, but he\u2019s five years from getting his medical benefits, we say: Don\u2019t retire. Go on the program. Work 20 hours a week. Work from home. We\u2019ll reduce your pay proportionally, but we will couple you with three university hires, and they will call you on Microsoft Teams and show you what\u2019s happening on the job site, and you\u2019re going to walk them through it. Work just three days a week. We\u2019ll cover your benefits.<\/p>\n We\u2019ve also expanded the parental leave policy, which already was one of the best in the industrial sector. And we created a way for people to buy more time off without having to leave their positions. They apply for more unpaid time off and we allow them to retain their position and seniority and allow them to work through whatever life event it is.<\/p>\n We landed on six weeks for the maximum. In the most intense industries\u2014such as a fighter pilot or a surgeon\u2014they\u2019ve found that six weeks of being out of the rotation allows them to re-set. So that\u2019s what we did. Before, the limit was two weeks.<\/p>\n CEO<\/p>\n Berry Global<\/p>\n Maker of plastic packaging<\/p>\n Evansville, Indiana<\/em><\/p>\n We\u2019ve got to be competitive in all the geographies we serve. We have 295 sites around the world and manage our employees in those sites geographically. Every geography will be a different labor environment. There are different criteria that employees are looking for. It\u2019s not just about wages but taking everything into consideration.<\/p>\n We let local management handle things with their insight about wages, and competition. They\u2019re hearing directly from employees about what they like and don\u2019t like, what they want more of and less of. It\u2019s a site-by-site discussion.<\/p>\n For example, at some sites, it may be important for employees to be able to access the internet at lunch; at other sites, they may not value that as much. Some want a more advanced locker facility, with different shower facilities. That includes the southwestern United States, where the temperatures are warmer; but in New England, some might not want that.<\/p>\n In any event, if you treat these things locally, you\u2019re going to be able to affect that local population and address the need of that geography. If you blanket something across our entire plant population, you may provide something that\u2019s not desired or needed.<\/p>\n We depend on our local management to respond to the different demands in terms of compensation and benefits at their sites. The better the front-line leadership is, and the more satisfied their team is, the higher our retention rate and productivity and safety performance. So these leaders participate in profit-sharing plans for those respective sites, because they have a great influence on the success of a given facility.<\/p>\n Chair and CEO<\/p>\n KPMG US<\/p>\n Financial consulting firm<\/p>\n New York<\/em><\/p>\n We announced a new package of enhancements to our benefits and compensation, tied to mental, physical, social and financial well-being. These increases are the biggest in the history of the company. You have to make sure your base compensation meets the market, but you also must have attractive benefits.<\/p>\n For example, we cut healthcare premiums by 10% for 2022 with no change in benefit levels, and we introduced healthcare advocacy services. We are replacing our current 401(k) match and pension programs with a single, automatic company-funded contribution within the plan that\u2019s equal to 6% to 8% of eligible pay.<\/p>\n As part of this, we\u2019re focusing on the crucial element of ensuring that employees know you\u2019re watching out for them. They also are looking for flexibility\u2014you don\u2019t want to under-index on how important that is. So we also are providing up to three weeks additional caregiver leave, separate and apart from PTO. And all parents will receive 12 weeks of paid parental leave, in addition to disability leave for employees who give birth, allowing some up to 22 weeks of paid leave. We also have expanded our holiday calendar to now include Juneteenth.<\/p>\n","protected":false},"excerpt":{"rendered":" In an unprecedented time for attracting and retaining talent, CEOs and CHROs are getting creative\u2014from three-day workweeks at full-time status to paid mental-health days to raised wages. Here’s what a dozen leaders told us they are doing differently. <\/p>\n","protected":false},"author":51,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_oasis_is_in_workflow":0,"_oasis_original":0,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[2199,2130],"tags":[],"class_list":["post-229870","post","type-post","status-publish","format-standard","hentry","category-compensation","category-talentmanagement"],"acf":[],"yoast_head":"\nLET THEM NAME THEIR SALARY<\/strong><\/h4>\n
Chris Kovalik<\/strong><\/h5>\n
TAILOR PACKAGE FOR YOUTH APPEAL<\/strong><\/h4>\n
Ronald Hall Jr.<\/strong><\/h5>\n
EQUALIZE AS YOU ACQUIRE<\/strong><\/h4>\n
Diane Dooley<\/strong><\/h5>\n
INNOVATE FOR THE NEW WORLD<\/strong><\/h4>\n
Jason Medley<\/strong><\/h5>\n
STAY AHEAD OF EXPECTATIONS<\/strong><\/h4>\n
Traci Tapani<\/strong><\/h5>\n
LEVERAGE BENEFITS FOR DE&I<\/strong><\/h4>\n
Mark Newman<\/strong><\/h5>\n
OFFER SKIN IN THE GAME<\/strong><\/h4>\n
Cesar Herrera<\/strong><\/h5>\n
PAY EXTRA FOR CONTINUITY<\/strong><\/h4>\n
Corey Stowell<\/strong><\/h5>\n
GIVE THEM THE KEYS<\/strong><\/h4>\n
Elliott Rodgers<\/strong><\/h5>\n
HELP THEM COME, GO\u2014AND STAY<\/strong><\/h4>\n
Aamir Paul<\/strong><\/h5>\n
GIVE SWAY TO LOCAL MANAGEMENT<\/strong><\/h4>\n
Tom Salmon<\/strong><\/h5>\n
FOCUS BENEFITS ON FLEXIBILITY<\/strong><\/h4>\n
Paul Knopp<\/strong><\/h5>\n