While there is truth to the old adage that “you’ve gotta pay to play,” many companies are building compensation packages in a vacuum, with little, or no connection to actual business goals. In fact, throwing money around–in the form of substantial CEO pay packages and recruitment signing bonuses–is not doing much to improve business success or employee retention. With executive churn on the upswing, attracting and retaining talent more than ever remains a top corporate priority. Indeed, companies say they are increasingly worried about recurring talent shortages–and for good reason. Less than 25 percent of the businesses Authoria surveyed said they were doing a good job leveraging compensation to attract and retain high quality employees–let alone aligning performance with business objectives. This nation is in the middle of a talent crisis. The U.S. is estimated to face a 10 million worker shortage in 2010; the 500 largest companies are expected to lose 50 percent of their senior management in five years and the average tenure at one employer for U.S. employees is only three years. An extensive study by research and advisory firm Bersin & Associates last May showed that due to economic growth, demographic shifts (retirement of baby boomers) and new workforce values, organizations are experiencing an unprecedented corporate talent squeeze. While appropriate and competitive compensation is absolutely critical, it needs to be part of a larger strategy for better evaluating, engaging, growing and retaining talent. Left on its own, compensation may ensure well-paid individual employees. But it doesn’t…more detail
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