People of all ages and from all generations spend their days working. From the very beginning stages of a career to the golden days nearing retirement, (most) people work for a living. They may work the same, but they’re at different steps in their lives. As such, compensating the college grad and the executive, and everyone in between means taking on few different steps in the process. Not everyone wants the same thing from their benefits package. This means tailoring your approach to your employees is crucial if you want to keep employees around for the future. Here’s how to distribute employee compensation fairly across the board:
Harness The Power of Tiers
Speaking of customization, experts agree: you have to tier your compensation plan. Baby Boomers want to make sure their retirement savings and holdings are secure; Millennials want a better work environment and benefits and are willing to take a pay cut to get them. Assuming you can appease both of these groups with the same plan is disingenuous at best and foolhardy at worst. Find what your employees want and target their interests, while allowing them to invest as much as they can in their own futures. Leave it up to them and they will find their own best deal. Use employee benefit specialists or consultants to assist your employees in making the right decision.
Avoid Cold-Turkey Retirement
Retirement may be at the forefront of Baby Boomers’ minds these days, but that doesn’t mean they want to head out the door immediately. Boomers’ are retiring later and later in life to deal with mounting debt and leaving their steady job suddenly may not be the best course of action for them. Instead, as a reward for their years of service, offer them a package that allows them to keep their regular benefits while decreasing their hours, so they can slowly work their way towards retirement. You might get a productivity boost out of it, too. Smart companies will assist in sunsetting these valuable keepers of company culture, innovation and knowledge by using them in succession plans and knowledge transfer via mentorship.
Work/Life Balance for Life
Gen X-ers, compared to Baby Boomers, aren’t really factoring retirement into their financial plans; 54% of Gen X thinks they’ll work past 65. They don’t trust the system to take care of them, want to make their own way in the world and want above all a work/life balance. If you want to fairly compensate people from Gen-X, you need to give them the room to make their own future, and that means not overworking them while providing them a better working environment. They’re not willing to take pay increases for poorer work conditions. If you treat them fairly, however, they’re much more likely to stick with you, and you’ll reap the benefits of having more productive and knowledgeable employees for longer. How can you make your workplace Gen-X friendly? Considering this is the generation most likely to have kids at home and lots of demands on their time outside of work, including baseball games, PTA, aging parents and their own continuing education, Gen X workers need flex scheduling options and remote working opportunities.
Work Flexibly With Millennials
Compared to the other working generations, Millennials aren’t totally invested in their retirement just yet. They may be thinking about and building their savings accounts, but it’s not the reason they take a job. Like we mentioned earlier, they want to work happier. They’re also more interested in proving themselves, for a number of reasons. Providing them with short-term incentive programs, like paying extra for increased performance in a given quarter, will motivate them to make a name for themselves. Pay for performance is something they gravitate toward and will create increased productivity with this group. Keep in mind that complicated and comprehensive retirement plans won’t necessarily attract them but repayment of college loans might.
Plan Employee Compensation, Increase Retention
No matter what generation you’re planning to compensate, it pays to plan it out. Being flexible and working around each employee is important to making everyone happy, but you need to set everything in stone, and make a solid plan, on paper, that you and your employee can work from. No working generation wants uncertainty from their payment plan, even if some generations enjoy uncertainty in life. Proper employee compensation leads to retention no matter what generation you’re working with, so having a plan from the get-go, instead of cobbling one from scratch with every new employee, will save you time.
With an employee compensation plan in place, you can plan for the future with every generation. ClearCompany’s suite of tools makes it easy to keep track of how employees are performing, every step of their career. Sign up for a demo today and find your next high performer, no matter what age they are.
As the head of a department in the midst of a sustained period of rapid growth, Sara has spent hundreds of hours interviewing, hiring, onboarding and assessing employees and candidates. She is passionate about sharing the best practices she has learned from both successes and failures in talent acquisition and management.