LaborIQ ’s Post

Is it time to move from job-based pay to skills-based pay? There’s been a lot of discussion about paying for skills instead of jobs. While this idea has merit, I believe it’s more complex than it seems. Most jobs require a mix of skills. In many ways, job-based pay already reflects this. It compensates for the combination of abilities needed to perform a role. But could a purely skills-based model work? Would it accurately capture what different jobs demand, or would it oversimplify things? I’m curious to hear your thoughts. Is there a better approach to compensation that we haven’t explored yet? Share your insights below! ⬇️ #Leadership #CompensationStrategy #FutureOfWork #SkillsDevelopment #TalentManagement

HR: "What’s your salary expectation?" Candidate: "80k to 90k a month." HR: "You’re the perfect fit for the role, but we can only offer 70k." Candidate: "Alright, 70k works for me." HR: "Great! How soon can you start?" 🔍 Meanwhile, the budget for that role is actually 150k. HR feels accomplished, thinking they’ve done a fantastic job negotiating and saved the company money. 🎉 But here’s the reality… 💡 The new employee joins the team and soon realizes the pay disparity. What follows? 👉 Dissatisfaction. 👉 Disengagement. 👉 Disloyalty. Fast forward two months: the employee leaves for a better opportunity, and now the organization is back to square one—restarting the recruitment process, facing performance gaps, and incurring additional costs. 🔄💸 The moral of the story? Pay people what they’re worth. 🏆 If you want to attract and retain top talent, fair compensation is essential. Cutting costs in the short term often leads to higher long-term costs, both financially and in terms of team morale and productivity. 📉 Treat your employees with the value they deserve, and they’ll give you their best work in return. 💼 #FairPay #TalentRetention #EmployeeSatisfaction #HRInsights #SalaryNegotiation #PayWhatTheyAreWorth #EmployeeLoyalty #RetentionStrategy #WorkplaceCulture #LeadershipTips

🤔 𝗘𝗨 𝗣𝗮𝘆 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆 𝗗𝗶𝗿𝗲𝗰𝘁𝗶𝘃𝗲: 𝗧𝗵𝗲 𝟯 𝗺𝘆𝘁𝗵𝘀 𝘁𝗵𝗮𝘁 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗹𝗲𝗮𝗱𝗲𝗿𝘀 𝗮𝗻𝗱 𝗛𝗥 𝗯𝗲𝗹𝗶𝗲𝘃𝗲 𝗺𝗼𝘀𝘁 … Throughout our numerous conversations with CEO’s and HR professionals about the impact of the new directive, these 3 misconceptions continue to pop-up:   ❌ 𝗠𝘆𝘁𝗵 #𝟭 -𝗧𝗵𝗲 𝗰𝗼𝗻𝘀𝗲𝗾𝘂𝗲𝗻𝗰𝗲𝘀 𝗮𝗿𝗲 𝗻𝗼𝘁 𝗮𝘀 𝗳𝗮𝗿 𝗿𝗲𝗮𝗰𝗵𝗶𝗻𝗴 𝗮𝘀 𝘁𝗵𝗲𝘆 𝘀𝗲𝗲𝗺 Maybe … for some organizations. But not for most, for instance: If you do not have a transparent job evaluation methodology and clear rules for pay progression in place. As from 2026, you will not survive without. Or, if you’d be confronted to a gender pay gap above 5%, things will get really complicated …  Or, if you were used to set pay levels for new hires based on their previous salary, you’re bound to have issues with workers you had hired for similar roles before … Or …    ⁉ 𝗠𝘆𝘁𝗵 #𝟮 - 𝗧𝗵𝗲𝗿𝗲 𝗶𝘀 𝘀𝘁𝗶𝗹𝗹 𝗽𝗹𝗲𝗻𝘁𝘆 𝗼𝗳 𝘁𝗶𝗺𝗲 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗶𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗱𝗲𝗮𝗱𝗹𝗶𝗻𝗲 𝗯𝗲𝗶𝗻𝗴 𝗝𝘂𝗻𝗲 𝟮𝟬𝟮𝟲 That leaves you just under 2 years …. which will be (too) short in many cases, like: If you need to modify your job evaluation methodology – or implement one form scratch … If you need to (and you will) educate and train your managers in dealing with the consequences of increased pay transparency and discussion … If you need to make sure all your pay processes and decisions are properly documented, preferably from now on … And if you consider that “pay” means all elements of compensation, from base pay to bonusses, commissions, allowances, discretionary payments …   🔴 𝗠𝘆𝘁𝗵 #𝟯 - 𝗢𝘂𝗿 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 𝗮𝗿𝗲 𝗻𝗼𝘁 𝗮𝘄𝗮𝗿𝗲 𝗮𝗻𝗱 𝗺𝗮𝘆 𝗻𝗼𝘁 𝗰𝗮𝗿𝗲 𝗮𝗹𝗹 𝘁𝗵𝗮𝘁 𝗺𝘂𝗰𝗵 Indeed, they’re probably not be aware yet … but they will be because you have the obligation to inform them of their right to transparency every year.  And do they care? All evidence shows they do, a lot. 📢 𝗡𝗼𝘄 𝗶𝘀 𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝗹𝘆 𝘁𝗵𝗲 𝘁𝗶𝗺𝗲 𝘁𝗼 𝗴𝗲𝘁 𝗿𝗲𝗮𝗱𝘆. Carrying out an initial diagnostic to assess your organisation's preparedness in this area is a first step that should be seriously considered. 📧 𝗪𝗶𝘁𝗵 Rewardwize and My Next Step, 𝘄𝗲 𝗵𝗮𝘃𝗲 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗲𝗱 𝗮 𝗾𝘂𝗶𝗰𝗸 𝗮𝗻𝗱 𝗲𝗮𝘀𝘆 𝗮𝘀𝘀𝗲𝘀𝘀𝗺𝗲𝗻𝘁 𝘁𝗼𝗼𝗹. 𝗖𝗼𝗻𝘁𝗮𝗰𝘁 𝗺𝗲 𝘁𝗼 𝗳𝗶𝗻𝗱 𝗼𝘂𝘁 𝗺𝗼𝗿𝗲!

Are you feeling underpaid and contemplating a job change? You're not alone. A recent study conducted by Payscale revealed that "regardless of whether or not employees are truly paid below market, our study shows that those who think they're paid below market represent two-thirds of job seekers." In fact, nearly 50% of workers who perceive their pay to be below market rates are more likely to actively seek new job opportunities within the next six months. This raises an important question: Can pay transparency help reduce staff turnover? According to the study, the answer is yes. When employees feel valued and have transparency around their pay, they're more engaged in their work. "It is perception of whether or not pay is fair that impacts whether an employee will stay with the company or start looking for other opportunities. Again, this emphasizes the importance of pay communications," said Payscale. So, do you believe it's crucial for businesses to be transparent about pay? #paytransparency #staffturnover #findstaff

When an employee is overpaid it is generally not recommended to reduce their salary. That's a big fat NO. Instead, HR or the Comp team should start by having that difficult conversation with the employee. Be transparent about it and let them know the course of action the company decided to take such as freezing the employee's salary until it aligns with market data. This will prevent further overpayments while allowing the employee time to adjust to the market rate.

Uncomfortable Conversations: Key to Fair Pay Employers typically benchmark their jobs to determine if they are competitively paying their employees every year or every other year. Most of the time my team and I find that 70% or more of the employees are paid within the market-based salary range.  But I really get to understand the leadership capabilities of HR and the executive team when it comes to their reaction to seeing the employees who are under or over paid. Sometimes, there is an immediate agreement to provide increases for those who are underpaid.  There is often concern expressed about how this happened and how they can prevent it from happening in the future. And if the company is struggling to have the budget to provide immediate pay increases, a plan is developed to include it in the budget as soon as possible. When the list of employees who are overpaid is shown, there are different reactions: 1)        “Are you sure you chose the right match from the external market?” (Yes, we double checked and are comfortable with the match. Would you like to review it?) 2)        “Are you recommending we reduce their salary?” (No.) 3)        “This is going to be a difficult conversation. What do you suggest we say to these employees?” (See my post on 28 June 2024.) And often, I find that the uncomfortable conversation doesn’t happen with the overpaid employees. Instead, HR/Compensation advises senior leaders on how best to have the conversation but during the next merit planning cycle, the employees continue to receive the same standard 3% – 4 % base pay increase. None of us like to have uncomfortable conversations, but they are the foundation of success in life and at work. You aren’t a great manager or leader until you can have uncomfortable conversations that lead to change. If you prioritize compeititve, equitable, and fair pay, at some point uncomfortable conversations will need to happen. https://lnkd.in/g38Z7KN4 #compensation #hr #humanresources #rewards #leadership #marketpricing #payequity #paytransparency #fairpay

Reduce your employee turnover: Pay isn't usually the issue. Has an employee ever handed you their resignation due to low pay? Was it truly about wages? We asked our candidates and our findings are somewhat somber. In 80% of the cases where low pay is cited for resignations, it's masking another reason: a relationship issue, typically involving ONE other individual at work, consciously or not. Whether it's the manager, a colleague, or a direct report, communicating internal discord is difficult for departing employees. There's a strong expectation to leave on good terms, so people often avoid causing trouble. Instead, candidates may say, “I'm not paid enough,” “I disagree with the strategy,” “I'm under too much pressure,” or “I don't fit into the culture.” What do these stats mean for employers? Don't take salary complaints at face value. It's (almost) never just about money (nor about strategy). We see companies losing valuable employees due to interpersonal issues without realizing it. Having the courage to tackle interpersonal issues may not be easy, but it can prevent additional resignations down the line. #humanresources #jobinterviews #recruitment #employeebenefits #helpingpeople #unconsciousbias Claire Garwacki Marco Ferrarotti Cyrielle Perrot Bellevue Executive Search In Her Chair

Replacing an employee can be an expensive affair, up to 30-400% of their salary according to some data. To promote a positive work environment and encourage retention, data-driven insights will play an increasingly important role within the HR and People & Culture landscape. Here are some key stats: Only 27% of employees think their job is great, indicating that there aren’t too many great workplaces around. Yet less people are quitting these days. (Gallup) In 2021, 63% of employees who quit their jobs cited low pay as the main reason, this matches with people looking for a higher salary in an inflationary market. (Pew Research Center) 63% of employees left their jobs because there weren't enough chances to grow. When people can't advance in their careers, they often look for better opportunities with more money somewhere else. (Pew Research Center) 57% of employees left because they felt disrespected. Human resources professionals try to solve problems before they get worse because if they don't, employees might quit. (Pew Research Center) It's good to know that most employees who leave their jobs, about one-third of them, don't do it because they have to work too much. This means we don't have to worry as much about being overworked. (Pew Research Center)

HR: What salary range are you expecting? Candidate: Between 80k and 90k per month. HR: You’re a great fit for the role, but we can only offer 70k. Candidate: “I can accept 70k. HR: When are you available to start? However, the internal budget for this role is actually 150k. The HR team feels they’ve done an excellent job negotiating a lower salary, thinking they’ve saved the company money. Fast forward—after joining, the new hire soon realizes the pay gap. What follows? Discontent. Lack of motivation. Erosion of loyalty. Two months later, the employee leaves for a better opportunity. Now, the company is back to recruiting, adding to hiring costs, impacting productivity, and demoralizing the team. 💡 Lesson: Paying employees their true worth isn’t just about salary—it’s about retention, engagement, and long-term success. Underpaying talent often leads to higher hidden costs. #EmployeeRetention #FairCompensation #HRStrategy #PayEquity #TalentManagement #CostOfTurnover #EmployeeEngagement #LeadershipInsights #WorkplaceCulture #HiringRight #RetentionStrategy

What if the employee doesn’t feel valued or is treated like sh*t? I read a post here on Linkedin about retaining good employees, and was surprised at how many commenters stated something along those lines of: “A robust pay plan will drive the results you want.” Employees definitely want to (and should) be paid appropriately for their work, but if monetary compensation is the only incentive someone has to keep a job, it won’t be enough. Any performance boost a monetary increase creates will be short-lived. The good feelings generated are fleeting, and how many times can a business realistically keep offering more? It just isn’t sustainable. So, along with a great pay plan we need something else. We need a workplace environment that offers opportunities for personal growth. It needs to be psychologically safe, where people aren’t afraid of trying new things. People want to know they matter, and that they’re not simply a replaceable line item on a list somewhere. Years ago, I read an article on HR Daily Advisor that talked about a study of almost 20,000 post-exit interviews. It stated that 89% of employers believe that their employees left for more compensation, but the reality is that only 12% do. Yes, pay your people! They WILL leave over this, BUT please know that there’s much more going on than just money. What do you think?