Compensation Tactics to Retain Mission-Critical Talent
Image: hiring.monster.com
With unemployment low and highly-skilled professionals in high demand, it’s time to reevaluate your compensation strategy to help retain top performers. Otherwise it’s way too easy to lose key people to the competition.
We spoke with a range of experts about how you can offer competitive compensation to retain mission-critical talent.
Simplicity and clarity are key to pay satisfaction. Your compensation strategy should be pithy enough to serve as an elevator pitch to retain top performers. Mark Stocker, president of recruiter SAN Inc., says there are two keys to making this happen. First, create a simple compensation plan that doesn’t change.
Second, allocate a much greater proportion of your compensation budget to people who have great success and long tenure. Sales commissions at SAN start at 25 percent and reach up to 50 percent, with equity kicking in along the way. “It’s key to be clear about compensation from the start of an employee’s relationship with the company,” says Stocker.
Speak to values that Millennials respect. Millennials now dominate the workplace, and they typically have compensation expectations that your company would be wise to meet. “Millennials expect fairness, communication, and advancement,” says Mykkah Herner, a compensation analyst at PayScale. “That’s why companies are showing employees market pay data. Otherwise, if they don’t, higher performers especially are a flight risk.”
More frequent, smaller rewards can appeal to many workers. In our ever-changing economy, workers respond to financial rewards that come early and often. As annual performance appraisals give up round to more frequent evaluations, compensation may take a parallel track.
“A lot of companies are not good at giving people good raises at the beginning of their careers,” says J.D. Conway, a recruiter at software vendor BambooHR. “We give employees money in small pieces as part of employee recognition, which they interpret as better growth and progression.”
Consider alternatives to ranking performance. What if – to limit attrition in a tight labor economy – you need to reward employee performance that’s in the top 50 percent, not just the top 5 percent? It’s in this context that many employers are deemphasizing forced rankings and coming up with new ways for employees to distinguish themselves.
Some companies are asking employees to “show me that you deserve this,” says Herner. “They’re adjusting compensation plans generationally.” Other companies are rewarding groups of employees for their success as a project team.
Know that your competitors may well raise their offers. If you believe a key employee has unrealistic expectations about how big an offer she might get from a rival company, think again.
“A couple of years ago, we would say, ‘Hey, this candidate has to be offered more money,’ and companies would balk,” says Joe Giacomin, a recruiter with the automotive practice of Angott Search Group. “Now companies don’t even question it” if they’re determined to attract top talent.
You may need to revise your thinking about counter offers. If you’ve written off an employee’s presentation of an outside offer as a poison pill to your relationship, you may need a rewrite to retain top performers. “We’re seeing a big increase in counteroffers,” says Giacomin.
“In the past, it was a real stigma to accept a counteroffer, and companies would say, ‘Pack up your gear and have a nice life.’ But these days, the employer doesn’t seem to be holding it against the person.”
Consider giving really big rewards to really big achievers. Giving your top performers a big chunk of the dollars they bring in may be painful – but it’s less painful than losing them and their networks. Giacomin says that in the OEM automotive parts industry, most bonuses are in the 10 to 20 percent range, but occasionally they’re 30, 40 even 50 percent.
But beware the perils of super rewards for superstars. “Some organizations pull aside large resources for their top one to five percent of performers, and give them more pay, bigger bonuses, and better mentoring, and professional development opportunities,” says Dow Scott, professor of human resources at Loyola University Chicago’s Quinlan School of Business.
“But the other 95 or 99 percent can figure out who’s getting the lavish attention, and they don’t like being left out.”
Restricted stock is getting more respect than stock options. Equity is always attractive, and your top people may bolt without it. But wise employees won’t accept equity in your company in just any form.
“The attraction of stock options fell off in the 2007-2009 recessions,” says Scott. “Companies have had to move more toward giving restricted stock, so now employees have something even if it loses values.”
Source: Hiring.Monster.com
Mike Lewis is a Premier Rental Purchase franchisee with multiple stores and currently serves as Vice President of Operations. With 33 years of experience in the rent-to-own industry, he has spent the past 20 years working closely with franchisee owners and previously spent 12 years in Corporate RTO, gaining a strong foundation in the business.
For the past five years, Mike has been sharing his knowledge by teaching managers and franchisees at the company’s Training Center.
Outside of work, he enjoys time with his family, kids, and grandkids, and appreciates the simple things in life – especially riding his Harley Davidson with the sun on his face. If you know, you know!
Lauren Talicska
Arona Corporation dba Arona Home Essentials
Lauren Talicska is an experienced multi-channel marketing specialist and the Vice President of Marketing & Communications at Arona Home Essentials. She has found her home in the RTO community, supporting stores in branding, growth, and increasing traffic.
You may recognize Lauren as a former RTO vendor, including her time as a partner for Nationwide RentDirect, or her previous participation in the APRO Vendor Advisory Committee. Lauren calls Columbus, Ohio, home and spends her workday crafting and executing marketing promotions from inception to realization, all while supporting the branding and social media needs of all the Arona stores in 12 states (plus Puerto Rico!).
Charles Smitherman
APRO
Charles Smitherman, JD, PhD, CAE, became CEO of APRO in 2023, bringing years of legal and executive experience in the rent-to-own industry.
Prior to joining the association, Charles served as COO, General Counsel, and Vice President of PTS Financial Services, where he played an active role in the rent-to-own industry by representing his company through PTS’s club program offering with APRO member dealers. Charles is an attorney with two decades of experience across a wide variety of areas, including RTO, consumer financial services, antitrust, corporate law, mergers and acquisitions, litigation, franchise law, and privacy law. Following law school at the University of Georgia, Charles earned a Master of Legal Studies and PhD in Law from the University of Oxford in England.
Charles is credentialed as a Certified Association Executive (CAE) with the American Society of Association Executives, a Certified Franchise Executive (CFE) with the International Franchise Association, and a Certified Information Privacy Professional (CIPP/US) and Certified Information Privacy Manager (CIPM) through the International Association of Privacy Professionals. As APRO’s sixth CEO in its 45-year history, he brings a collaborative, member-focused approach to association leadership, emphasizing transparency, advocacy, and value creation. Outside of work, Charles is an active ultra runner and open water swimmer.
Mike Kays
Ashley Furniture Industries
As VP of Rental Sales for Ashley Furniture Industries, Mike thrives on building relationships with our RTO industry veterans, and helping businesses grow through new product, new marketing, and new supply chain options.
Mike works to leverage a wide breadth of relationships and influence, intimate knowledge of market trends, and unique knowledge of what RTO dealers need from a supplier to be successful.
The saying goes that a high tide raises all boats, and our goal is to leverage the world’s largest furniture manufacturer to drive the continued growth of the RTO industry and all the suppliers.
Mike Tissot
Countryside Rentals Inc., dba Rent-2-Own
Mike grew up in the rent-to-own industry under the guidance of his father, former APRO President and RTO legend Darrell Tissot. For nearly 25 years, Mike’s innovative leadership has helped expand the family business to more than 40 stores across Ohio and Kentucky while also shaping the industry as a whole.
He has served as President of the Ohio Rental Dealers Association, an APRO board member and Treasurer, and President and Treasurer of the TRIB Group. His contributions have earned him the APRO President’s Award of Excellence and the title of APRO Rental Dealer of the Year.
Outside of RTO, Mike enjoys time at the lake house or in Orange Beach, Alabama, with his girlfriend, Angela Strong McCool. A passionate Cincinnati Reds fan, he rarely misses a game, whether watching or listening alongside his parents. He also takes every opportunity to visit Arizona, where his daughter is currently attending Arizona State University.