From an employee perspective, you can understand why there’s so much intrigue around compensation. We all want to know that we’re being paid fairly, but if we don’t know our value in the market, how can we be sure?

Conversely, talking about compensation with team members can be perilous from a manager or HR leader’s perspective. That’s because compensation is such a complicated and imperfect science. 

One position’s value to an organization may differ dramatically from another company’s. Layer on pay differences by industry, location, and individual work experience, and you suddenly have a complicated situation on your hands.

One way companies can begin to navigate these compensation discussions with their people is by having a well-crafted compensation strategy … And your compensation strategy is only as good as the data that underpins it. This is where benchmarking comes in.

What is benchmarking, and why is it so important? 

Benchmarking is a data-driven method of understanding what your competition pays people in similar roles. There are various benchmarking methodologies out there–some dependent on self-reporting (think: Glassdoor). Others like Mercer leverage company-submitted pay data from thousands of organizations globally. 

Benchmarking providers work with companies to match internal jobs to the most accurate titles in their vast database of job descriptions. Unlike self-reported pay databases, job matching looks at the specific tasks and requirements for every role at your company. This process ensures that things like title inflation or obscure job titles don’t jeopardize the validity of your compensation data.

But job matching is just the tip of the iceberg. Benchmarking providers also look at your industry, people’s location, headcount, and annual revenue, among other factors, to provide the most relevant compensation reports to their customers.

Benchmarking is complete. Now what? 

Once you’ve gained access to the benchmark data, your company will need to develop its compensation philosophy. A well-crafted compensation philosophy aligns with your company’s mission, vision, and values and answers crucial questions that will allow you to navigate tough compensation decisions in the future. 

Some key questions to consider as part of your compensation philosophy are:

1. How do you want to position your pay relative to your competitors? Do you strive for the middle of the pack at the 50th percentile? Maybe there are a few high-value roles for which you’re willing to pay top dollar at the 90th percentile.
2. Do you differentiate pay according to location? What happens if a team member relocates to a less expensive market? Will you adjust their pay down to match the local market rates?
3. What level of transparency are you comfortable with as an organization? Will you share salary ranges with your team members? As companies strive to be more diverse and equitable, many are also opting for greater pay transparency. Keep in mind that several countries (and US states) are now instituting pay transparency laws, so your approach concerning transparency may be predetermined. 
4. Besides cash compensation, what other incentives do you offer to attract and retain talent? Even if your company isn’t in a position to pay salaries at the top of the market, perhaps you make up for it in other ways. Company stock options, health and wellness benefits, growth opportunities, and culture are all part of your compensation package.

Talking about comp with your people

Once you’ve gathered your benchmark data and established your compensation philosophy, you’re almost ready to talk to your people about it. Crafting your communication plan is arguably the most important step of the whole process. Your company could have the most thoughtful, data-driven compensation program in the world, but it will all be for naught if you and your managers don’t feel comfortable talking about it.

Managers and HR pros alike should be prepared to answer questions like:

When will I receive my next salary increase?

Your compensation philosophy should detail the cadence with which your company plans to review people’s salaries each year–for most companies, this will occur once a year. As managers and HR professionals, it’s your responsibility to set proper expectations with team members about future pay adjustments. 

Be as transparent as possible about the factors that impact your company’s compensation decisions, such as budget parameters, eligibility criteria, and individual performance. The quickest way to erode team trust is to make promises you can’t keep, so avoid setting unrealistic compensation expectations with your team members about the timing and amount of their next increase. 

Why am I earning less than external market rates for my role?

When team members approach you with this question, start by asking them what compensation sources they utilized to form their conclusion. In many cases, they’ll tell you that they researched their job title and salary online. Free online “benchmarks” are often lacking in context, such as job level, experience, and company size, all of which can dramatically sway the results of the data. 

This is where managers’ knowledge of the benchmarking process and strategy becomes useful. You can talk through the key factors that informed the company’s salary bands and the philosophy behind that approach. Perhaps your company’s base salaries are, in fact, below market rates, but its benefits and equity package offer a competitive edge. To navigate this conversation effectively, managers need to understand both the company’s position and their team members’ personal motivations.

Why is my pay at the bottom of the posted salary range?

If you work in one of the many jurisdictions that now require pay transparency in job postings, you’re likely to encounter more questions like this from your team members. Of course, the way you answer will depend greatly on the individual doing the asking. 

It may be that the person was recently promoted and is still developing their skill set for the new role. They could also be located in a lower-cost region where pay rates are lower. If there’s a performance reason for their pay situation, use this conversation as an opportunity to discuss performance expectations and areas for development.

Benchmarking is a modern business imperative

As business leaders, leveraging benchmarking data when making decisions about pay, and using it to speak to your people about their comp is critical, especially in today’s rapidly evolving job market.

Although the market is sending mixed signals, unemployment rates remain low, and the war for talent is still in full swing. Using relevant benchmarking data to inform the pay used to attract and retain the best talent out there is imperative for any company that wants to stay competitive for the long term.

The post Benchmarking and how to talk comp with your people appeared first on HiBob.

I’ve been on both sides of the employee onboarding equation throughout my professional career. Early on—before my move into HR—I joined a global agency where onboarding was structured like a well-oiled machine. 

New hires went through an intensive 30-day training program where we learned everything we needed about the company, role, and culture to be off and running. I’ve also worked at a few companies that handed me a laptop on my first day and said, “go.” Anyone who has ever worked at an early-stage startup can probably empathize.

Creating great employee onboarding experiences takes a village

Since my transition into HR about seven years ago, I’ve led onboarding program builds more times than I can count. What I’ve learned through these experiences is that creating a great onboarding program is hard. It takes time, immense cross-functional collaboration, and no matter how hard we try, the job is never done. As your company evolves, so must your onboarding program.

As we like to say at HiBob, “It takes a village.” That means HR, IT, executive leadership, and employees all play a part. But at the end of the day, the direct manager bears the brunt of onboarding responsibilities and has by far the most significant impact on the employee experience. So, it’s essential that they take ownership of the onboarding process. 

Here are a few essential tips for managers to create a fruitful onboarding experience for new team members:

Tip #1: Be honest

It’s important to be honest about the realities of the job. People need to know the good and the bad—before they sign their offer. There is nothing worse than being sold on an opportunity that doesn’t match reality. If your new hire steps into a position that doesn’t match the job you sold them in the interview process, you’re likely to see early attrition. 

But beyond the core job responsibilities, be honest about the role’s challenges. What are the unique aspects of your company’s culture that might not be right for everyone? The more transparent you are about these things up front, the less likely you will end up with disengaged employees.

Tip #2: Keep up the communication

Stay in communication with your new hires before their start date. This might seem obvious, but managers often miss this step. Time and time again, new hires will tell me they haven’t heard from their new manager since their interview. This lack of communication can create needless uncertainty, putting your new team member on edge before they even start the job. 

I’d combat this in my recruiting days by sending congratulatory notes to hiring managers after the offer letter was signed. In my message, I’d send them the new hire’s email and phone number with a gentle reminder to keep the communication lines open.

Tip #3: Create an onboarding plan

Nothing sets a new hire up for success more than a well-crafted onboarding plan. At HiBob, we use pre-built onboarding Task Lists in Bob, customized by site and department, to ensure that our new hires get a consistent onboarding experience. From there, managers should supplement with individualized plans. 

At minimum, the onboarding plan should include an overview of the stakeholders new hires should meet, the tasks or projects they will own, and the KPIs their performance will be measured on. I like to structure my onboarding plans in a 30-60-90 day format, but there are many different schools of thought on this, so pick the approach that works best for you.

Tip #4: Invite your new hires to a team outing before they start 

If you have the opportunity to take your new team members out before their start date, the experience will pay off in spades. Think: office happy hour, virtual coffee, or team lunch. Whatever you decide to do, knowing the team at a new job can help reduce anxiety on a new hire’s first day. It’s also a great way to help the team connect on a personal level.

Tip #5: Set aside time in a new hire’s first week to talk about work styles

The first week of a new hire’s journey is meant to be dedicated to better understanding how your new team member operates and how you’ll work best together. This conversation can expose insights like what times of the day they’re most productive, how they cope with stress, and how they like to receive feedback. Understanding these preferences up front guarantees to set your relationship off on the right foot and will help you build a strong manager-employee relationship.

Tip #6: Connect your new team member with a buddy

Lots of companies today have buddy programs, but not all buddies are created equal. When selecting a buddy for your new hire, it’s best to pick someone who will really invest in the process. They don’t need to be experts on the company and all its processes, but they should know where to go for answers. And more importantly, they should be approachable and responsive, so the new hire feels supported during their first few weeks on the job.

Tip #7: Carve out time for a career discussion

Though it might seem premature, talking to your new hire about their career goals during their first few weeks will give them peace of mind that you’re invested in their long-term future. And with the job market like it is, understanding and supporting people’s’ career aspirations is essential for retaining talented people. The career conversation can inspire ideas for special projects and collaborative opportunities to keep your new hire motivated and engaged.

Tip #8: Host a welcome lunch

I distinctly remember how I felt when I ate lunch alone on my first day of a new job. It was incredibly lonely, and it put a real damper on my first-day experience. The thing is, it was entirely avoidable. As a manager, it’s your job to make sure your new hire doesn’t eat alone on their first day. If you’re not available during the lunch hour, you can always grab a team member (or a few!) to take your place. 

If your team works remotely, send them a gift card to order their lunch from home and have them eat together over Zoom. This time is not for talking shop. The welcome lunch is a chance to get to know one another and start building that team bond.

Tip #9: Establish meeting norms

Now that you’ve discussed the onboarding plan, work styles, and career goals, it’s crucial to keep the communication going. After week one, be sure to establish your cadence for regular one-on-ones—ideally once a week for at least 30 minutes. This should be protected time for you and your reports to stay aligned on key priorities, talk through challenges, and provide feedback to one another. 

Tip #10: Schedule dedicated check-ins

Set dedicated 30, 60, and 90-day check-in meetings to review new hires’ progress and gather their feedback on the experience so far. At HiBob, we use Bob for automatic milestone meetings at days 30, 60, and 90, and the one-year anniversary. We use the pre-built 1-on-1 templates to hold managers accountable. If there are early performance concerns, this is the time to talk about them.

The bottom line: Make the most of your first impression

You only get one chance to make a first impression. Don’t spoil it. Be prepared, be present, and be sure to play an active role in the onboarding experience of your new team members. Get the whole team involved. Together, you’ll help your new hires feel welcomed, motivated, and steeled for the job ahead. 

The post 10 tips for creating first-class onboarding processes appeared first on HiBob.