It’s common among recruiters to talk about talent shortages and the skills gap, but there’s a more basic reason some companies have a hard time filling their top positions: inadequate compensation. A recent study conducted by Aerotek looked at how companies can better attract the qualified talent they need. The answer? Pay more.
Increased Expectations = Increased Compensation
In the study, over half of the respondents worked for companies that paid less than their competitors for similar positions. At the same time, 73% of respondents said that responsibilities for specific positions had increased since the beginning of the recession in 2008. If compensation isn’t increasing in proportion to those greater expectations, it’s no surprise that highly skilled workers choose positions elsewhere.
Most companies say they would pay more if they could, but the economy has stretched budgets to their limits, leaving little leeway in terms of salary and benefits. But this lack of willingness to invest in top talent may be a vicious cycle: below-market compensation packages result in mid-level talent, ultimately reducing a company’s ability to foster growth.
Talent Is An Investment, Not an Expense
The problem, says Timothy Gardner of Utah State University School of Business, isn’t that companies can’t find job candidates with the right set of skills. It’s that they “can’t find the people with the skills that they need at the amount that they want to pay or the training investments that they want to make.” Bottom line: you get what you pay for.
If compensation packages are viewed merely as an expense, there will always be an unwillingness to increase pay scales in order to attract better job candidates. But when companies start thinking in terms of investment rather than expense, they can incorporate better compensation and benefits into the overall company growth strategy. Better talent means greater opportunity, both now and in the future.
If it’s absolutely not possible to increase compensation, studies show that better benefits can also be a drawing card for both passive and active candidates. However, don’t expect the highly skilled workers you’re looking for to stick around long if you’re paying below market salaries. Retention rates depend heavily on competitive compensation as well.
How to Create Happy Employees
Only about half of the employers surveyed by Aerotek conducted surveys among their employees to determine what benefits they value most. Determining which benefits are most important to employees can help companies create a better employer brand, which can also play a role in attracting the right job candidates. Other positive steps to take include investing in training opportunities, hiring from within, and creating more accurate job requirements that focus on the specific skills needed for the job.
