How does your business view compensation for the multigenerational workforce?
The pandemic birthed the Great Resignation (or the Great Renegotiation as some employees defined their new platform of power). It then morphed into the Great Reshuffle and now the Great Breakup (women directors are reportedly leaving their jobs in droves). Whatever bespoke headline-grabbing term hiring and talent acquisition have taken on, finding and keeping key talent is a priority concern for every Human Resources department and C-suite executive.
There now seems to be a magnifying glass placed on the workplace, and the relationship between personal values, communities and careers. How businesses view compensation and benefits for a diverse multigenerational workforce has become increasingly important as the demand for workers in all areas of business has spiked.
This summer, LinkedIn organized its “Recruiter Reunion” to gather insights and ideas about how recruiters have had to move quickly to merge with the new ways of attracting and finding the talent their companies need. Three suggestions emerged from the reunion:
- Embrace what you learned from the pandemic (video interviews are ok)
- Look for talent close to home (don’t overlook alumni and internal candidates and review retention strategies)
- Collaborate with your comp team to make compensation and benefits a top priority
The conclusion was that the pandemic changed everything, and the talent market is still in flux. One aspect that hasn’t changed is the impact of compensation and benefits and how more attractive, personal and unique plans can be created to attract and retain key talent.
Women Leaders In the Workplace
A McKinsey & Co./LeanIn.org survey, Women in the Workplace 2022, the largest study of women in corporate America, found that “Women leaders are switching jobs at the highest rates we’ve ever seen.” The report says women continue to be underrepresented in leadership roles, so they are leaving for companies that prioritize cultural changes that improve work and the workplace for everyone. The survey reported that only one in four C-suite leaders is a woman, and only one in 20 is a woman of color. And for every 100 men promoted to a manager role from entry-level, 87 women are promoted.
The report recommended two goals for companies: “getting more women into leadership and retaining the women leaders they already have.”
While speaking recently on the podcast Re: Thinking with organizational psychologist and best-selling author Adam Grant, Mark Cuban, the billionaire entrepreneur and TV personality, highlighted the work-life balance that GenZ and Millennials, the leaders of the future, highly regard in their personal and professional lives. “…emotional health, mental health equilibrium is something that they place a premium on.” And, he said, this applies not only to employees but also to what customers will expect. “Boomers aren’t your customers anymore,” Cuban said.
“If a company doesn’t have a social mission, it’s going to be harder to retain your customers.” Because, Cuban said, either you accommodate your employees and customers, or they’ll find an organization that does.
Compensation and Culture
The Bank Director 2022 Compensation Survey sponsored by Newcleus Compensation Advisors, indicated that intensifying competition for talent puts pay and benefits front and center. When asked about the specific challenges their organization faces in attracting and retaining talent, bankers and directors point to an insufficient number of qualified candidates (76%), rising wages in their markets (68%) and rising pay for key positions (43%).
“There are a few ways to control or reduce related expenses, but the real key is making sure you are efficient with your compensation dollars and that you address the expectations of new employees,” said Flynt Gallagher, Newcleus Compensation Advisors President. “Some examples include offering payments to meet student loan obligations, providing 401(k) plan management education and reducing administrative costs. For executives, implementing a cost-effective lifetime SERP may be the answer to retaining key people.”
For Millennials and GenZ, job security is less important. Networking and skill-building provide the stability they are looking for. What is important is career development, manager interaction (trading managing for coaching) and work/life balance.
Gallagher cites a great example of managing individual expectations. A client bank needed to find a way to retain a young rainmaker who wasn’t focused on retirement, equity, or other typical incentives. However, the employee was very interested in finding a way to buy a house. “We were able to craft a very simple, straightforward plan that paid off student loans, allowed the worker to qualify for a mortgage and ensure the employee would remain with the bank for the next seven years,” Gallagher said. The employee appreciated the personal attention, and the bank demonstrated that the individual was valuable to them and proved it by finding a way to make a dream a reality.
Gallagher said the findings in the Bank Director Compensation Survey reveal the struggle banks and credit unions face competing with diverse industries for talent, addressing the multigenerational values and employment expectations, and the pressure of increasing compensation costs.
The bottom line is it’s important to identify the most valuable and productive employees who are already on the team, making sure their compensation reflects their value and that compensation and benefits address what’s important to them.
Learn more about Newcleus Compensation Advisors and our team of retirement and compensation experts.