As we approach the tail-end of the pandemic and digital growth continues to pick up pace, the war for digital talent is also heating up. The disruption in business operations has forced HR leaders to take a closer look at compensation and employee benefits.
Where once work-from-home allowance was unhear of, today, it is one of the chief criteria used by candidates to assess job offerings.
Incentives is not the only part that is rising. Base pay, too, on average has increased ~5% during the pandemic.
Take a look at the pay data for Netflix offered in their San Francisco Bay Area office.
- Product designer: $325,500 median; ranging from $325,000 to $500,000
- Senior data scientist: $412,500 median; ranging from $360,000 to $500,000
- Senior data engineer: $425,000 median; ranging from $390,000 to $550,000
- Senior software engineer: $430,000 median; ranging from $154,669 to $620,000
- Senior UI engineer: $467,500 median; ranging from $250,000 to $500,000
Netflix pays more than their peers and therefore cannot be considered as a benchmark. But this data is a good indication for where pay structures are heading towards.
Revise pay structures to focus on benefits
The pandemic has forced enterprises to look beyond “basic pay.” While this means more talent costs in the short term, it will translate to decreased attrition rates in the long term.
The pandemic’s toll on employees’ mental wellbeing, has pushed as many as a third of them to develop mental health problems such as anxiety and depression. Employee assistance programs that provide mental health services like counseling and therapy are the need of the hour.
Another strategy is for employers to offer co-pay waivers for telehealth consultations thereby allowing employees unrestricted access to treatments and other health services.
In addition to Virtual health offerings, including online fitness classes, mindfulness exercises, and webinars that educate workers on healthy living are just a few sops being offered to new employees today.
This benefits-oriented compensation packages are now all the rage given that the modern workplace is dominated by millennials who are more concerned about their physical and mental well-being than previous generations. Encouraging regular via frequent virtual breaks between meetings is another initiative taken by companies to improve mental wellbeing and productivity in the workplace. This culture-shift has become a necessity thanks to the “new-normal” that we are living in.
Post-pandemic compensation strategies
There is not doubt that the war for the right talent is real and more competitors are entering the fray by the day. This will further accelerate in Q3/4 2021 when vaccines would have reached a significant demographic and people are gearing up to go back to office.
As employees get back to work from office, they can expect to see marked difference in the employee-employer relationship scale. For example, employees may respond favorably to greater scheduling flexibility to manage childcare and even in cases of taking care of a family member. Employers may also need to provide new types of benefits, especially programs that provide more flexibility and security, to bring their workforce back.
Recent studies show that a striking 52% of recent college graduates give more importance to the benefits associated with a job offer than just the basic pay. This is assuming that these are value-added benefits that help with their mental & physical wellbeing. Even having a no-questions-asked leave policy was shown to be more attractive to these graduates, however, basic pay still played a key role here.
Many compensation surveys need to be carefully analyzed, and boundary conditions verified. To get this absolutely right, we have to understand the non-basic pay. Draup is building many connectors to new financial statements and other similar sources to understand what companies are paying for the various non-basic components.
Get in touch with us to gain more targeted peer analysis on pay structures across verticals, locations and talent ecosystems.