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Sunday, June 20, 2010

Your Compensation, Recruitment and Training Strategies

Being recruiters give us, in ExeQserve an opportunity to see how a company pays its employees affect how it attracts (or fail to) new employees. Pay definitely has an effect on retention but we'll save that for another post. For now, I'd like to share what we see as we help companies fill their needs for talent.

First, let me narrow down our focus to a specific component of your compensation philosophy and that is the decision on whether you will pay above what the market offers, at par or below. It may be obvious that the decision you make will have an impact on attracting talents hence, we propose that you realign your recruitment and training strategy to match your decision on how to pay your employees. Here are our recommendations:

If you decide to pay above what the market offers, then that's great because that is the quickest way to hire the most sought-after talents with awesome accomplishments and experience. Match your compensation with a good working culture and you'll have candidates lining up for interview. Not all companies can afford to do this. I can also imagine with horror if companies try to out-price each other because it will drive up pay rates to unreasonable levels. There are, as a matter of fact already some positions specially in the IT industry where people are paid absurdly high salaries.

If you pay at par with the market, you should know that it will be difficult to place people who are paid the same (or more). You should therefore look for people who are paid lower than what you are willing to give so they will accept your offer. This are people who are probably next in line and ready to move to the next level in their careers.

If you can't compete with the market, you should prepare to train people who have the aptitude but not enough skills or those who have some skills but do not have as much experience as the ones being paid high in the market. When you do this, you do not only save on compensation, you also help the industry by developing people who will eventually feed the industry. You should also expect that after sometime, your employees will bid you farewell, thanking you for all the experience because by then, they'll be ready to move on. Having a program for developing new talents, you shouldn't be worried.

This is not always the case. Some companies want to have their cakes and eat 'em too. They don't want to train, they expect to hire highly experienced candidates and they offer low pay. As a result, they take too long to hire and the ones they hire leave when they realize they're real market value.

Compensation is an important leverage in attracting talents. However, not all companies can compete owing to economics and all other considerations. When you can't compete with the leading companies in terms of compensation, I believe it is but right to adjust your recruitment and training and strategy.

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