As COVID-19 continues to force a new normal for businesses all over the world, human resources professionals have been presented with unique challenges. Most notably is the issue of how businesses are going to retain one of their most expensive — yet valuable — assets: their employees.
Given the fact that employee compensation is one of the largest, if not the largest expense item on the books, it’s no surprise that many organizations have been forced to make some tough decisions about who to retain, who to furlough, and who to let go. However, large-scale turnover resulting in experienced team members walking out the door also comes with a steep price tag: the loss of institutional knowledge.
As most managers understand, a working knowledge of internal business processes and practices takes time for employees to develop and is an important business asset sacrificed when replacing experienced employees with new hires.
With so many new challenges presenting themselves during this public health crisis, it may be difficult to start thinking ahead when many businesses are just trying to keep their heads above water. However, it is essential that you also pay attention to the long-term outlook for your business. When your employees come back to work, how competitive will your compensation package be relative to your competitors that are also looking to replace the talent they lost during the downturn? How can you leverage this crisis as an opportunity to improve the way you manage employee compensation, and to better communicate to your staff how much they are valued? Specifically, how do you manage merit budgets and salary planning processes to properly allocate precious resources and retain your business’ most valuable components with ongoing shifts in the business environment outside of your control?
Leverage Your Solutions
For many HR professionals, compensation management software tools are providing a solid platform on which to build employee retention strategies during the COVID-19 epidemic. When planning for an unpredictable future and maximizing value retention for the organization, HR professionals are turning to the tools of their trade to manage the shifting landscape of employee turnover, retention and future staffing after the pandemic has passed.
By using one of the compensation management software tools available in the market, HR departments can drive an effective compensation planning process, even when deploying to a remote manager workforce.
Compensation management software streamlines the training of all decision-makers about the company’s compensation strategy, helping them to properly document the decisions they make. Using a standard platform and pushing the compensation process further down in the organization promotes a greater understanding of the process to all managers. This, in turn, promotes greater transparency as managers become able to speak to the process with greater authority and ownership.
During normal operating seasons, managing bonus and salary budgets, maintaining salary ranges, and modeling compensation incentive options can be a daunting task. With all the uncertainty of the current public health crisis, businesses are challenged to react fast to almost daily changes in the future business forecast.
While many organizations may have compensation tools readily available, the new, more rapid pace may undermine their ability to rely on those tools as an effective solution to meet shifting business demands.
The Right Tool at the Right Time
Beyond having a compensation tool that meets your functional requirements, what considerations related to the current environment would make one tool optimal and another a burden? Three factors immediately come to mind:
- Turnaround time
- Resource (people) requirements.
Have you ever experienced a last-minute change to your compensation process just days or even moments before opening your compensation process to managers? If so, how did that go? With many systems, the truth is that it likely did not go well at all. For many, this situation resulted in a delayed “go-live,” having to accept “no” as an answer and dealing with a cumbersome reconciliation outside the system after all the planning was done.
In business today, and especially during the COVID-19 pandemic, the dynamic nature of business has never been more apparent. Rapid changes are no longer simply one-off incidents you can say “no” to. Constant change is the new reality, and businesses and their processes must be fluid and adaptable.
The right tool for these times will be one that offers true business agility without requiring a team of potentially limited resources to configure and administer it.
Use this health crisis to look at your HR technology from a new perspective. Your next HR technology review should place a much greater value on rapidly configurable, flexible solutions that have a minimal impact on your people resources and are intuitive to set up, change and administer.
Selecting HR technology solutions from this perspective will ensure that the tools HR departments rely on are not a distraction during challenging times, but rather an aid to support the objective of retaining one of their most valuable assets: their employees.