High salaries used to be the number one thing that attracted top talent a few years ago. But we live in a new world where candidates are looking for much more. Companies are battling it out for top talent. The war has intensified. In this article we are going to be exploring two important strategies to win the war of talent acquisition and retention. You could be a small business owner or the head of HR for a multinational corporation, this article will help you with actionable insights into practical tips to attract and retain top talent in 2023. This is part one of the two-part series on this topic. Make sure you sign up to our newsletters to ensure you read the second part.
Attracting Talent: 2 Strategic Methods
Method 1: Monetary
They say money makes the world go round. For many people, monetary benefits are highly attractive. It helps them become financially independent. A compensation package with packages with various monetary benefits can play a significant role in an individual’s decision to accept a job offer. A study revealed that 72% of the people join companies for financial independence. Additionally, when you have a competitive offer, it helps you stand out from other companies that are attracting your talent. Let’s have a look at various monetary benefits that can be included in the offer.
a. ESOP
Employee Stock Ownership Plan or simply ESOP is an employee benefit plan that provides employees with ownership stake in the company. Under this plan, the employee is entitled to receive a certain amount of stock or the right to purchase the company stock. Apart from being a powerful tool for attracting talent, ESOP can also improve employee motivation and productivity. ESOPs serve as a form of retirement plan and accumulate over time, employees tend to stay with the company much longer.
b. Allowances
In addition to the base salary, allowances are given to employees in order to cover or compensate for expenses related to particular jobs or conditions. You can include a variety of allowances like housing, transportation, meal, work from home, hazard pay and education allowances to make your offer more attractive. The benefit of having allowances in your offer is to show candidates that you are willing to invest in their employees’ well being and professional growth. Although it is important to analyse the market trends while creating allowance plans because if it is not on par with the trend, candidates may get demotivated and may drop out.
c. Bonuses
These financial rewards are distributed based on employee performance – like exceeding sales targets, timely project completion, or achieving goals that are in line with the organisation’s goals and objectives. Bonus shows that you value hard work and rewards achievements and reward employees for their hard work. It is a great tool to attract great talent. Having bonuses can also help you improve employee motivation and performance as it is linked to their outcome. It is recorded that employees that receive financial incentives are more likely to continue with the company longer.
Also read: 7 Actionable Ways to Retain your Talent
d. Referral programs
Forbes reported that 45% referrals stay for four years or more compared to only 25% of employees sourced from job boards stay longer than two years. A referral program incentivizes current employees to refer their friends and colleagues for open positions within the company. This can be a great tool to attract talent for several reasons. The current employees have a high network and are more likely to know high performers like them. Referrals can also improve employee engagement, increase quality of hires, and save hiring cost. While creating a referral program, ensure that you are transparent and fair.
e. Commissions
While many compensations can be given to any job role, commissions are normally paid to an employees’ sales performance. They can earn a percentage of sales they make, that can be a significant portion of their overall compensation. Commissions lead to high employee performance and motivation. Since commission based compensation can be attractive for top sales talent, it provides a clear path to financial success and career advancement.
f. Profit shares
Profit sharing is a method of sharing a portion of profit with the employees in the form of bonuses, regular pay outs or as an investment plan. When an employee feels connected directly to the company’s success and profitability, they perform their best.
g. Salary raises
When you outline clear information on an employee’s salary raise, it allows them to look into the future and see how much they will be able to grow their income working for your organisation. While most companies have yearly salary raises, you can innovate and implement multiple salary raises in a year. This will surely attract talent and help you find the most suitable candidates.
h. Retirement and fringe benefits
A comprehensible package consisting of retirement and fringe benefits often attracts great talent as they are what sets each company apart. They are non-wage compensation that an employer provides to its employees in addition to their base salary. It can be both financial and non-financial, here are some of the examples of retirement and fringe benefits.
- Employment based pension plans
- Government sponsored schemes
- Insurance plans (Life, health, disability, etc)
- Paid time off
Conclusion
In conclusion, attracting top talent in 2023 will require a strategic approach that incorporates both financial and non-financial techniques. The strategies mentioned above are proven to be effective in attracting and retaining top talent. By using monetary techniques like compensation, allocating ESOPs, bonuses, referral programs, commissions, profit shares, and salary raises, you will be able to attract top talent to your company.
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