Executive team members get a bad rep in general; there’s a misconception that all are overpaid and underutilized. While this may be the case at some companies, it doesn’t have to be at yours, and what if your executives have been working tirelessly to help the team achieve incredible success? Everyone deserves to be appropriately compensated.
This is where executive compensation consulting is an effective tool for attracting and retaining your higher-ranking team members. Let’s explore how it works.
What is Executive Compensation Consulting?
Executive compensation consulting is the process of encouraging executive team members to perform at their peak and support the needs of the organization. This is achieved through compensation packages, as the term implies, to serve as a means of motivation while helping to compel executives to remain loyal to the company. Appropriate and especially equality-driven executive compensation can help retain the best and brightest higher-ups within your walls who work hard to support the team members, processes, and departments they may be responsible for.
Of course, it’s not all about ‘money’ – executive compensation is a bit more complex. For instance, while most folks prefer a salary increase or annual bonus commensurate with achieving goals, others may be into RRSP matching, deferred compensation, additional benefits such as more dental insurance, and/or extra or unlimited vacation allowances. The key to having an effective executive compensation consulting strategy is to ensure that the needs of your highest-ranking team members are sufficiently met without overdoing it; there is such a thing as being too generous with compensating executives, especially (and understandably) within the eyes of your other employees.
Who Qualifies for Executive Compensation Consulting?
As an independent organization, you have the ability to decide who is entitled to additional compensation. There may be cases, however, depending on where you operate and other determining factors, where local laws and governmental regulations establish clear guidelines on executive compensation limitations. Your best bet is to work with a firm experienced in executive compensation and benefits consulting that can help you draft and tweak fully compliant policies while also sufficiently beneficial to higher-up staff.
Why is Executive Compensation Consulting Important?
You’ve likely spent a lot of resources recruiting for executive positions, and as a result, your goal should emphasize retention. Executive compensation consulting is useful in ensuring your higher-ups remain committed to the organization’s goals, team wellness and motivation, shareholder needs, and much more. Again, the reasons for enacting such compensation will vary from company to company, but they should remain a viable, sensible, and competitive solution. The key is to encourage executive leadership to maintain performance efficacy, feel properly supported and paid what they are worth, and motivate themselves to remain a part of the team.
Where to Start?
The thought of executive compensation consulting may feel daunting to some business owners, especially if you want to ensure fairness to employees who aren’t on the leadership team yet do a lot of the hard work. In this case, it’s best to work with an HR consulting firm that knows the essentials of striking the right balance. This means they need to be highly experienced in auditing, planning, negotiating, and interfacing with executive and ‘regular’ team members for a better term. Appropriate, equality-focused, and fair compensation can only be arranged in togetherness and mutual agreement.
On that note, would you like a hand with meeting your executive compensation needs? We’re more than happy to help at True North HR Consulting. Reach out to us today!