10 Steps to Review and Update Compensation and Benefits Packages

To attract and retain the best employees, your organization must offer a competitive compensation and benefits package. You can’t just leave these packages alone and expect results, however. Instead, you need to regularly review and update your compensation and benefits packages to keep them up-to-date and attractive to job seekers and employees.

If you’re unsure where to begin, don’t worry as we have you covered! In this article, we will provide 10 steps that will help you review and update compensation and benefits packages. Without further ado, let’s dive into the first step.

Determine What You Want to Accomplish

Before you review and update your compensation and benefits packages, you need to determine what your organization wants to accomplish. To have a transparent review and update process, consider setting goals. You should base these goals on the specific needs of your organization, such as attracting talent, providing rewards for excellent performance, and boosting morale.

Collect and Analyze Market Data

To make your compensation package competitive, you need to understand how it compares to the market. Collect and analyze market data, including:

• Wage surveys
• Salary benchmarks
• Insights on retirement planning
• Healthcare trends
• Legislative updates

Researching and analyzing market data such as these can help you gain a better understanding of the current forces in your industry. The more analysis you do, the better your ability to make informed decisions will be. This includes deciding what to include and exclude from your compensation and benefits package when it is time to update it.

Understand Your Business Strategy

Understanding your business strategy begins with asking yourself some questions, such as:

• What challenges and opportunities will your organization face in the short term and long term?
• What type of employees will your organization need to meet your objectives?
• Will changes in the marketplace affect your organization?
• Will changes in the marketplace affect your organization’s ability to attract talent?

When you answer these questions, you can start to see how you may need to adjust your compensation and benefits policies. You don’t have to tweak everything at once though, as it is often more beneficial to take it one step at a time. This helps you to retain focus and put your efforts into initiatives that contribute to your organization’s success.

Assess Your Current Policies and Practices

Assessing your current policies and practices begins by researching other competitors’ practices to see if yours are up-to-date. Use salary surveys and online resources to compare jobs that are relevant to each position in your organization. As well as this, you can ask for feedback from your current employees to see if they have any concerns about their current compensation and benefits offerings. Consider employee feedback sessions, surveys, or one-to-one interviews to find out these opinions.

Develop New Policies, Practices, and Programs

Instead of just updating policies and practices, consider introducing new ones. When developing new policies, practices, and programs, you must take into account:

• Local and national laws, regulations, or industry trends that impact any current policies
• Your organization’s objectives and values
• Protection and additional benefits for your employees
• Flexibility of packages and how they can meet the needs of employees in different roles and circumstances
• Training initiatives to ensure that all employees are aware of their rights

Developing new policies, practices, and programs is a way of proactively protecting your organization’s interests while creating value for employees.

Consider Costs and Budget Implications

Every organization has a finite budget and resources. There are cost implications when making changes to your organization’s compensation and benefits package. Consider market rates, fixed expenses, and variable costs, when making budgetary decisions that relate to reviewing and updating compensation packages.

Create a Communication Plan

When you have appropriate plans ready to put into action, you need to create a communication plan. Doing this ensures that you inform your team effectively. The information you provide needs to be timely, accurate, and thorough.

Determine who needs to know what information and decide how you will communicate the information. You should also discuss any questions or concerns with your team. Keep in mind that any sensitive information unique to an individual should be communicated face-to-face or in a video call.

Train Managers on the Changes

Keeping managers up-to-date on changes is vital. Training is essential as employees will typically contact them with any questions they may have. Ensure that you have a training plan in place that can create an engaging experience for managers to later relay the changes to compensation packages and benefits that have been made.

Monitor Performance and Impact of Changes

Once you implement any changes, it’s time to take a step back and monitor their performance and impact. Looking at factors such as employee morale, productivity, retention rates, and recruitment costs can be great indicators of success. You can also consider external surveys to benchmark your organization against competitors. This step is an integral part of the review process, especially when you want to measure how successful the changes made have been.

Re-Evaluate Regularly

The final step is to review and update your compensation and benefits package regularly. Organizations can get complacent, but times change and so do resources. Ensure that your organization is prepared and ready for the next review when the time comes.