The news on the economy is mixed, with some claiming robust health and others dismissing recovery almost out of hand. Regardless of who’s right, the employment market is the tightest it’s been in 8 years and wages are going up for the first time in as many years or more. That’s great news for employees seeking positions with new companies, but not so good for the employers offering them. Salaries and payroll are the largest line item on most any company’s books, so higher wage dispensation tends to hurt businesses operating on already tight margins.
Companies are Moving to Northern Nevada
In Reno and surrounding areas, new employers aiming to take advantage of Nevada’s corporate tax policies have been arriving at a healthy clip over the last few years, with Tesla being a prominent example. These companies tend to be progressive, from out of state, and bring with them higher-paying entry-level jobs. Tesla’s starting wage is $14 per hour, for example.
Opportunities to work for a prestigious company with a handsome benefits and compensation package inevitably raise the bar in a smaller community like Reno. Employees naturally become accustomed to a more balanced work life, better compensation and progressive mindset which makes it harder for small businesses who maintain traditional compensation models to attract the talent they need to prosper.
How to Compete with Large-scale Organizations Offering Higher Pay
Understanding that most native Nevadan companies can’t boost their starting wage to $14 per hour any time soon, there are other things they can offer to remain competitive in the shifting market. Total Compensation is an important concept that such companies should explore and understand. Increasingly, employees rate their job satisfaction based not solely on wage or salary, but in conjunction with ancillary benefits and other forms of reward. Such compensation components augment employees’ sense of satisfaction, which fosters retention and increased productivity. And the best part about alternative forms of compensation is that they defer capital outlay and preserve cash flow.
Businesses who effectively espouse the concept of Total Compensation go beyond paying salaries – they advertise their complete pay package for employees including all forms of money, benefits, services, and other perks. Total compensation can be defined as the resources available to employees, which are used by the employer to attract, motivate and retain employees.
What is a Total Compensation Package?
Total compensation packages typically far exceed the value of base salaries alone. They often include some or all the following:
- Training and Education
- Paid Leave, Paid Sick Days
- Professional Development
- Retirement Benefits like 401(K), 403 (b) and Pensions
- Paid Relocation
The compensation elements listed above are not cheap for employers to offer by any means, but from a cash flow perspective, they tend to be easier for employers to offer than higher base wages alone. In addition to their virtues of affordability, excellent data show how much they contribute to employee satisfaction, retention and sense of security.
If you are an employer in the greater Reno area and wish to discuss Total Compensation and how your company can restructure its rewards packages, contact Solutions at Work today. You’ll be greeted by a friendly, helpful representative who will explain options and make recommendations based on the specific nature of your business and the workforce that keeps it moving.