MightyRecruiterHow to Lobby Executive Support for Compensation Plan
When you work in human resources, your overall responsibility is to enhance one of the most critical assets of any businessïits people. You do this by planning, implementing and analyzing various policies, programs and initiatives. Unfortunately, these plans don’t all receive immediate support from management, no matter how good or necessary they are. In fact, one of the steepest climbs any HR professional faces is getting management and executives to back a proposed plan for compensation. Here’s how to gain executive support for compensation plans.
Involve Executives Early
People, no matter who they are and where they work, are more likely to support an idea if they’ve been aware of it all along and have had input into its development. Follow this principle to get executive support for compensation plans. First, ask executives for permission to match employee compensation with the aims of the business. Present the necessity of the plan, and emphasize the bottom line: how the plan benefits the business. For example, it’ll help the company recruit better talent and retain employees, thus avoiding the staggering costs of replacing people who leave. Ask for an executive team to be formed: perhaps three executives who are willing to give their input along the way and serve as communication points. Also form teams from other departments in the company.
Define the Need for Compensation Plans in the First Place
Executives do not always innately understand why compensation plans are needed. For instance, they may prefer to work on a case-by-case basis when it comes to employee compensation. ïI’ve got to have this person!ï the chief executive tells you. ïMake it happen, no matter what you have to do.ï The result, unfortunately, is wildly divergent levels of compensation even for similarly qualified people. These folks may never talk to one another about compensation, but why take that risk Why be the type of company that apparently favors certain genders or backgrounds over others One reason you should provide when lobbying executive support for compensation plans is this: compensation plans are blind: blind to race, background, political preference, sexual orientation and so on.
Design Thoughtful and Effective Plans
In many cases, there is more to compensation than meets the eye. To fully grasp the various issues, involved, you need to look outside of your company. Determine the type of talent your business recruits.
-Do you vie for job candidates with companies different from your own In many cases, you do, at least for certain positions. Accountants, for example, work in a wide variety of industries. So do receptionists. If you are a nonprofit group, your competition also frequently includes for-profit companies.
-Is your geographic reach for job candidates national, regional or local No doubt you know that the cost of living in some cities and states is higher than it is elsewhere. If you recruit nationally but the position will be based in a low cost-of-living state, you may need to adjust compensation upward to attract the best talent.
-Do you vie for job candidates with companies of different sizes than your own This question is important because it is a rule of thumb that the bigger the company, the more lavish the compensation. This is not always fair, or even fair most of the time, but that is how things generally go. If you are a smaller company, you could increase compensation to attract talent who would normally prefer to work for a larger employer.
-How much do you care about being competitive To answer this question, analyze factors such as the state of your company’s finances, the economic forecast for your industry, the reputation of the company and how quickly and by how much the company is expected to grow.
-How much does the company value each role an employee plays Rapidly growing tech companies tend to care deeply about attracting the best and the brightest tech talent, and so they work to offer compensation that is well above average for in-demand positions. For a receptionist position, however, the tech company might be satisfied with offering average compensation.
When you have well-researched answers to these questions, you are well on your way to gaining even more executive support for compensation plans. After all, you’re only giving the company what it needs and what is best for it.
Address Pain Points
Executives want to know several things as early as possible when you present plans: the real issues they solve, their cost and expected return on investment, and possible consequences. Be sure to address these points, and make plan development an issue for the entire company, not just human resources. As you work on getting executive support for compensation plans and making all-star hires, turn to the resources here at Mighty Recruiter for guidance.