Learn how to attract and retain talent, balance equity and flexibility, manage costs and risks, and leverage technology and innovation in your compensation and benefits strategy.

Review of jobs and headcount right size is a must these days. All line managers must be aware of their line's productivity and associate costs.

How can you address compensation & benefits challenges in a changing labor market?

The labor market is constantly evolving, and so are the expectations and needs of employees. As a HR professional, you need to keep up with the trends and challenges that affect your compensation and benefits strategy. In this article, you will learn how to address some of the most common issues that HR managers face in this area, such as:

1 Attracting and retaining talent

One of the main goals of compensation and benefits is to attract and retain qualified and motivated employees. However, this is not always easy, especially in a competitive and diverse market. You need to understand what your target employees value, what your competitors offer, and what your budget allows. You also need to communicate your value proposition clearly and effectively, and align it with your organizational culture and goals. To do this, you can use tools such as market surveys, employee feedback, and benchmarking to design and review your compensation and benefits packages regularly.

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Haider Kamran Khan

Head of Operations @ Advanced Datalytics
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I regularly benchmark compensation against industry standards, ensuring competitiveness. Flexible benefits packages cater to diverse employee needs. Continuous market research informs adjustments to align with changing labor dynamics. Transparent communication on total rewards educates employees, ensuring satisfaction and retention amid market shifts.

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Jawad Hussain

Experienced Retail Professional | Freelancer
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To address compensation and benefits challenges in a changing labor market, it's important to stay informed about industry trends and benchmarks for salary and benefits. Regularly reviewing and adjusting compensation packages to remain competitive can help attract and retain top talent. Additionally, offering flexible benefits options, such as remote work or wellness programs, can meet the changing needs of the workforce. Lastly, conducting regular surveys or feedback sessions with employees can provide insight into their priorities and help tailor compensation and benefits offerings accordingly.

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Rebekah Celletti

Senior Manager, Compensation at BetMGM
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A cornerstone of our compensation practice is to benchmark specific jobs against the industry. We work in a fast-growing, evolving industry so staying on top of how we pay is key to attracting and retaining top talent.

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Muhammad Faisal Riaz

Strategic HR Leader with 20 Years of FMCG Expertise Driving Organizational Success.
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In this cometative market there is no remarkable gap between the companies competing for talent in a defined segment of industry, total remuneration is almost comparable unless you want to engage talent for an entirely different project or transformation purposes. In later case employers are inclined to pay the difference.

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Rejane Bierhals

Especialista em Gestão de Pessoas no Agronegócio | Gerente de RH | Analista comportamental Disc | Recrutamento e Seleção | LinkedIn Estratégico
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Lidar com os desafios de remuneração e benefícios requer uma abordagem estratégica e flexível, algumas práticas podem ajudar as organizações a enfrentar esses desafios como a analise de mercado, a revisão periódica das politicas de remuneração, possuir uma pacote de benefícios atraente, realização de pesquisa de engajamento, programas de desenvolvimentos, entre outras.

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2 Balancing equity and flexibility

Another challenge that HR managers face is to balance equity and flexibility in their compensation and benefits plans. Equity means that employees are paid fairly and consistently according to their skills, performance, and contribution. Flexibility means that employees have options and choices to customize their compensation and benefits according to their preferences and needs. Both are important for employee satisfaction and engagement, but they can also create conflicts and complexities. You need to establish clear and transparent criteria and policies for determining and adjusting compensation and benefits levels, and offer a variety of options and alternatives that suit different employee segments and situations.

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Muhammad Faisal Riaz

Strategic HR Leader with 20 Years of FMCG Expertise Driving Organizational Success.
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More the variety more the complex structure which pose as much challenge as convenience to attract and retain talent. If you have deep pockets you can enjoy this leverage but under current financial stress it's better to focus on core benefits only.

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3 Managing costs and risks

A third challenge that HR managers face is to manage the costs and risks associated with compensation and benefits. Costs include not only the direct expenses of paying salaries and providing benefits, but also the indirect costs of administration, compliance, and taxation. Risks include not only the legal and regulatory liabilities, but also the reputational and strategic risks of losing or alienating employees or customers. You need to monitor and control your compensation and benefits expenditures, and ensure that they are aligned with your financial and operational objectives. You also need to mitigate and manage your compensation and benefits risks, and ensure that they are compliant with the relevant laws and regulations.

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Muhammad Faisal Riaz

Strategic HR Leader with 20 Years of FMCG Expertise Driving Organizational Success.
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Regulatory compliance is not cheap and especially in countries like Pakistan where Govt officials tends to exploit shortcomings through kick backs and facilitation payments and some employers too feel it sunk cost due sub standard facilities offered by institutes to workers, it's not an easy task to get compliance at par unless management is committed to do so.

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4 Leveraging technology and innovation

A fourth challenge that HR managers face is to leverage technology and innovation to enhance their compensation and benefits practices. Technology and innovation can help you improve your efficiency, accuracy, and transparency in administering and delivering compensation and benefits. They can also help you create more personalized, dynamic, and engaging compensation and benefits experiences for your employees. You need to explore and adopt the latest tools and solutions that can help you streamline your processes, automate your tasks, and optimize your outcomes. You also need to embrace and encourage a culture of innovation and experimentation in your compensation and benefits function.

Compensation and benefits are key elements of your HR strategy, and they can have a significant impact on your organizational performance and reputation. By addressing these four challenges, you can create a more effective and sustainable compensation and benefits system that meets the needs and expectations of your employees and your business.

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Muhammad Faisal Riaz

Strategic HR Leader with 20 Years of FMCG Expertise Driving Organizational Success.
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An absolute area to explore which can help getting operations more efficient and cost effective. Business process outsourcing, Third party services for non core jobs will definitely help you.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Muhammad Faisal Riaz

Strategic HR Leader with 20 Years of FMCG Expertise Driving Organizational Success.
Report contribution
Review of jobs and headcount right size is a must these days. All line managers must be aware of their line's productivity and associate costs.

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How can you address compensation & benefits challenges in a changing labor market?

1

2

3

4

5

1 Attracting and retaining talent

2 Balancing equity and flexibility

3 Managing costs and risks

4 Leveraging technology and innovation

5 Here’s what else to consider

HR Operations

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How can you address compensation & benefits challenges in a changing labor market?

1

2

3

4

5

1 Attracting and retaining talent

2 Balancing equity and flexibility

3 Managing costs and risks

4 Leveraging technology and innovation

5 Here’s what else to consider

HR Operations

Rate this article

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