It’s official: Tech companies competing for talent right now are getting desperate. With perks and pay raises like these on offer, it’s no wonder some have posited that the Great Resignation is a misnomer. What we’re really seeing is the Great Upgrade—workers leaving their jobs in droves for a better deal.
It raises the question: Why should someone have to quit in order to get paid what they’re worth?
Perks, like signing bonuses and extra days off, are a shiny solution in a tight labor market, but they don’t get to the heart of the problem: Our compensation structures are grossly outdated.
It’s Not (Just) About Pay (or Perks), It’s About Power
If the Great Resignation has taught us anything, it’s that there’s been a tangible shift of power in our economy. We’ve outgrown the days when workers punched clocks and feared reprimands from bosses roaming the factory floor. Today, people know what they’re worth and they’re not afraid to go out and get it.
Yet for many companies, training and compensation structures are stuck in systems designed to tip the scale of power in favor of employers. Grandfathered from bygone eras, benefits rarely change after someone is hired, and raises, if they happen at all, are incremental and don’t reflect the going market rate.
Not only does this penalize existing employees for their loyalty, but it’s also bad for employers as well. I recently came across an extremely seasoned and talented developer who was being paid half the going rate at his job. Why? He’d been with the same employer for nearly a decade. Employers may realize short-term benefits in paying talent below market, but in the long run, it forces experienced employees out, taking with them subject matter expertise and institutional knowledge, eventually causing companies to resort to outlandish extremes to fill the talent gap.
It doesn’t have to be this way. As employees have begun to reclaim their power under the backdrop of an unpredictable societal landscape, more employers are realizing the benefits of modernizing HR structures to proactively offer a fair deal.
It’s one of the reasons our company has chosen not to negotiate on salaries or offer hiring bonuses, for instance. If you have to pay someone a bonus to work for you, how bought in are they on your overall value proposition? Likewise, if salaries have to be negotiated, they likely aren’t fair, transparent or equitable in the first place.
Employees Are Key Investors—Show Them Fair Returns
Success hinges on satisfying stakeholders. Any CEO can tell you how much effort goes into attracting investors with clear value propositions that show a growth trajectory and promise of increased returns.
This same effort is rarely extended to employees—who are arguably just as critical to a business’ overall success. The people on your team are investing a precious resource in your company—their time—and they are measuring ROI in more than just a paycheck.
What the Big Quit tells us is people want jobs that evolve and respond to shifting conditions whether that be changes in the market, their lives or in the way technology allows us to work. Like everyone, we’ve had to adapt to shifting priorities for our team members during the pandemic. For instance, I recently rehired my first “boomerang” employee whose ask in coming back wasn’t for more money, but more time, so she moved into a part-time role.
Viewing workers as investors—and treating them accordingly—doesn’t just create a more equitable environment at big companies; it allows even small firms that may not have the budget for extravagant bonuses to hold their own in the war for talent. Even the scrappiest startup can offer flexible schedules, remote or hybrid work arrangements or creative compensation options, like profit-sharing and equity shares.
The key is to treat your employees like equal partners and give them a stake in your success.
Don’t Just Set It and Forget It
Of course, if you don’t consistently evaluate and revisit compensation structures, you risk your model becoming outdated. It’s important to experiment—and accept you won’t always get it right, at least not right away.
At the beginning of the pandemic, we tried to fend off burnout by offering more days off to our team. It backfired in some ways. It turned out that more personal days increased the stress of compressed workweeks or filling in for team members who were away. We realized that coordinating time off was important, as was reducing overall workloads, so we’re making changes to our team structure to achieve that.
But we never would have known if we hadn’t had built-in feedback loops with our team—regular town hall meetings and hack weeks that put management in the trenches. We’ve also worked to create a culture that rewards people for speaking up and takes a responsive approach to HR.
With labor shortages at a record high, it’s easy to think the demands of workers are untenable. But the goal isn’t top-end salaries and individual work arrangements for every employee, it’s to create fair and sustainable compensation models that evolve with your team.
The reality is: Most employees want lavish benefits about as much as they want unfulfilling pay-for-play jobs. The best way to attract and keep talent from looking elsewhere is to treat them fairly—on the day you hire them and throughout their career.
This article was originally published on Worth.com.