For 25+ years we have recruited on thousands of searches for companies in just about every industry. These companies have ranged in size from start-up to Fortune 50. The result of our work has led to tens of thousands of candidate interviews. Here’s what we’ve learned: total compensation is not all about the money.
Almost everyone thinks about the monetary benefits a company can offer with the obvious being salary, bonuses, and commission. Equity (stock), benefits, paid time off, holidays and the like are other forms of compensation that aren’t as common. What we’ve learned from our conversations with countless passive and active job seekers is that monetary compensation and traditional employee benefits are only scratching the surface of total compensation. Below are a few examples of non-monetary compensation that are key factors for employers to consider when trying to recruit and retain talent.
Many companies have clearly stated vision, mission, and values. Although, a similar number of companies fail to align their organization and thus set up policies, procedures, and cultures that ignore them. Ultimately, this leads to avoidable attrition of high performers. The vision, mission, and core values should be lived and breathed, and seriously considered for hiring, promoting, and terminating staff. High functioning organizations ensure their policies, procedures, hiring practices, promotions, and terminations take root in the vision, mission, and values. Schizophrenic cultures breed conflict, confusion, and frustration.
The idea of brand is a double-sided coin. The brand we often think of is the perception of the company by consumers (customers) in the market. Similarly, a company’s employment brand is equally important. Great companies not only have a great product, but they have an employment brand that is equally attractive. These two concepts are a key form of non-monetary compensation. Conversely, a weak brand can also be a form of negative compensation.
It has been said, people don’t leave bad jobs (or companies), they leave bad bosses. I’ll save the argument about leaving bad companies for another topic. There is no doubt that the quality of your boss will have some impact on job satisfaction, for better or worse. The quality of a boss is in the eye of the beholder. Competence, character, transparency, work ethic, positive attitude/outlook, genuine care and concern for others (above self) are all common qualities of a good boss. While money is a great deodorant, it often fails to cover the stench of a bad boss.
Who doesn’t want to be on a winning team?!? Conversely, who wants to be on a losing team?!? It is true, there is no better deodorant than success. People will put up with a lot if they can be part of a winning team, especially if that team involves working with others who help them improve, learn, and advance. If your team isn’t winning (yet), then vision casting, hiring great people, aligning resources, and inspiring leadership will be keys to getting you there. If your team isn’t winning and lacks a winning game plan, then you’ll likely find it hard to attract and retain great talent.
Flexibility, in today’s terms, is offered in one’s ability to get their jobs done (and done well) without sacrificing their quality of life. Offering remote working options that allow people to collaborate remotely through technology offers flexibility. In today’s market, requiring someone to work a rigid on-site schedule is viewed negatively. This is especially true for high performers that do not need or want to be micro-managed.
Quality of Life
Sometimes too much of a good thing isn’t always good. Growth companies, or companies lacking the resources to fully staff their teams often lead to chronic overtime. This has disastrous effects on work/life balance and quality of life. As said earlier, being on a winning team can take some of the pain away. However, long-term it is not sustainable and your staff will begin to fatigue. Chronic fatigue leads to high stress, decreased productivity and motivation, and turnover.
The most common attribute of A-Players is their desire to make a positive impact. Top performers want to be able to make a noticeable impact on the business, solve novel problems, and calculate the impact that they themselves have made. For example, Picasso wouldn’t be Picasso if you forced him to paint by numbers. Furthermore, it’s not only about being able to contribute in a meaningful way, but being recognized for your contribution, too.
Have you ever heard someone say they like to commute for an hour (or more) one-way? Maybe that person exists, but this would be a very small percentage of the workforce. While companies can’t easily relocate to satisfy every person, it is unlikely that anyone traveling for longer than an hour one-way will commit to that long-term. This is especially true if they are required to be in the office five days a week. Companies offering remote work options will have a broader pool of talent and reduce their turnover, which is costly.
Yes, recruiting talent to the farthest reaches of rural America is a challenge. Relocation is hard, but it is especially hard if the geographic location is not ideal. It is especially hard to recruit niche talent to a market where few similar job opportunities are present. This would require another relocation if the job doesn’t pan out, which likely will impact the number of serious candidates.
High performers aren’t just looking for a job. They want to be challenged. They want to learn and grow. Learning cultures fully leverage the creative capacity of their greatest asset, their people. Learning cultures have great vision, empower leaders, and have a continuous improvement culture that promotes from within. Training, learning, and development programs that focus on more than just job duties are key to a learning organization. It has been said, if you are not growing (learning), then you are dying.
There are many who are satisfied with having a job. However, recruiting A-Players will require opportunities for advancement. Career advancement is part of the talent lifecycle. Succession planning and processes to determine individual readiness is key. Company growth and individual advancement are typically tied together, but not always. Stifle a high performer with the glass ceiling or limited opportunities to advance, and you’ll be backfilling that job soon.
For some, travel (even considerable travel) is a benefit (positive compensation). For others, travel is a burden on the family and physically and emotionally draining (negative compensation).
The concept of “negative compensation” comes from the opposite side of the examples of non-monetary compensation outlined above. Take for example, a job opportunity that pays above market and will improve a candidate’s standard of living. But, for that additional compensation, they will work for a boss that has no interest in their growth (personal or professional), the job offers no remote work options, and the commute is two hours round-trip. Suddenly, a job that offers strong monetary reward is offset by the negative compensation from an uncaring boss, lack of flexibility, and a draining commute.
Now, let’s evaluate the opposite side of this equation. The monetary compensation is below market. But, the job reports to a boss who is caring and invested in your growth and success. The commute is only one hour round trip (or offers remote work). In the latter example, the non-monetary compensation may, for many, offset the lower (below market) financial compensation.
Having discussed the interests, motivations, and desires of tens of thousands of job seekers, we have come to learn that total compensation is not a one-size fits all solution. Every candidate has unique personal and professional needs that can’t be fully satisfied by traditional total rewards programs alone. We would encourage employers and corporate recruiters to understand the motivators of each individual candidate, so they can be properly motivated to honestly consider your job.