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CFO Corner: Yahoo Shows the Way On HR Leadership

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Yahoo CEO Marissa Mayer recently brought in Jacqueline Reses as a new EVP. A veteran of private equity firms, high tech and Goldman Sachs, Reses is as high-powered an executive as you can find. What does Yahoo plan to do with their new rock star? She will focus her energies on leading human resources and talent management.

Since we happen to be talent management experts, we thought we would share what we think that Reses, as well as leaders at other companies, need to know before taking on the task. PayScale's 2012 Compensation Best Practices report reveals that, for the first time ever, executives’ number one HR concern is retention. With wages climbing and competition for talent increasing, retention is a great place to start.

Before you rush off and devise efforts to raise your total retention rate, read on to learn about how retention is more complicated than it used to be. Compensation is still the key, but you need to be thoughtful and use the right data in your decisions.

Compensation Moves into the Fast Lane

If you are making choices based on months-old data from traditional surveys, you will be in for a shock. Compensation now moves at the speed of business, which means it changes daily, not yearly. To make your compensation decisions, which directly impact retention, you need the kind of real time, fresh data that PayScale provides.

Jobs are More Specialized

Not too long ago, you could easily categorize a particular employee with simple job labels. Today, both people and jobs are highly specialized. A number of factors, including geography, training, certifications, market trends and performance need to be included in the calculation. Use data that includes these variables, so that you are able to set compensation appropriately.

Target Your Retention

Even if you have and use the right data, your retention efforts will be for naught if you fail to reward the right factors. You retain high-performers, the employees that drive business success, by implementing pay-for-performance programs like merit raises. You drive away your top performing employees by relying on equity-driven approaches like across the board cost of living adjustments. That said, sometimes you will want to boost employee engagement across the board. If you can do it while boosting productivity, as Mayer just did by giving every employee a smart phone, so much the better.

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