Compensation Strategies and Consultants

One of the most important documents an organization can create to empower and engage employees is a compensation strategy. A successful compensation strategy will help maximize employee output, increase their job satisfaction, and reduce turnover, all while keeping compensation costs within reasonable levels; as Rachel Ohliger writes, "High turnover, skill gaps and slow time-to-fill a vacancy, when frequently associated with a particular role, could all indicate the same issue: compensation."

While compensation strategies generally fall under the purview of an organization's human-resources department, there is a significant role that consultants are able to play. For example, some specialized organizations may have difficulty setting competitive compensation schemes. While a marketing agency is intimately familiar with proper compensation rates for marketing employees, it may not know how to compensate a new IT manager. Independent consulting firms can fill in the knowledge gaps and help organizations set reasonable, attractive compensation strategies. This is only more the case when an organization lacks a dedicated HR department or staff.

Another benefit of working with a consultant when creating a compensation strategy is objectivity. Compensation can be a tricky problem in a company; there needs to be a balance between providing fair (and competitive) compensation for employees while also keeping payroll costs low and incentivizing performance instead of free-riding. With a dedicated HR department, this balance can be managed; in the absence of one, however, internal interests—however benign in intent—can interfere and result in a substandard strategy that undercuts overall business goals. An independent consultant, however, can act without conflicts of interest, providing a strategy that is fair to employees while also being conducive to the organization's bottom line.

Finally, in many organizations, the HR department is either nonexistent, new, or at times understaffed and overworked. In such cases, an outside consultant can provide needed experience, skills, or staffing to create important organizational documents like compensation strategies. Strategies are critical to an organization's growth and performance; without business goals, HR policies, or compensation strategies, employees lack a way to track their own career advancement or plan for future success. Additionally, without these things, management lacks direction and is unable to instill a sense of purpose in their workers, and the business overall lacks direction and focus.

These mistakes can be costly. Consultants, however, can make up the difference when an HR department is otherwise unable to provide the needed results. Consultants are generally experts in their field, with years of experience helping organizations create successful strategies, and hiring a consultant requires far less overhead than hiring, training, and outfitting new staff members (especially when you are creating an entirely new department).


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