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Diving summary:

• While employees identify salary as the number one reason they join and stay with a company, only about half of employers surveyed said they were Effectively comply with your salary programs.according to a report published October 23 by financial services firm WTW.
• WTW said the disconnect is likely a result of talent shortages, generational changes, new work models, the global pandemic and high inflation that have affected the workplace in recent years. Part of the problem could also be ineffective communication, according to the report. Less than 1 in 4 of the nearly 1,900 companies surveyed said they do a good job of explaining how workers’ pay is determined.
• “Organizations have likely been unable to focus on the factors that drive the effectiveness of pay programs over the past several years, given recent labor market dynamics,” Lori Wisper, CEO and leader of global workforce solutions, told WTW. and WTW rewards. a statement.

Diving information:

The WTW report identified six core objectives related to compensation program effectiveness: driving employee attraction, increasing employee retention, promoting fair compensation internally, providing competitive compensation, aligning with business strategy, and rewarding employees for his performance.

As economic conditions have improved and labor market pressures have eased, companies should make changes to address factors that influence the effectiveness of wage programs, Wisper said.

One of those issues the report identified was wage compression, which more than half of employers said is a problem and about the same proportion of employers said will be a problem in the coming years.

“Companies should start by updating their compensation philosophy, because it is critical to the effectiveness of the compensation program and can contribute to better retention of key talent, employee productivity and financial performance,” Wisper said.

Companies that updated their compensation philosophy in the past five years did so to attract and retain workers, improve the employee experience and improve pay transparency, among other reasons, according to the report.