The pandemic has left business owners devastated, angry, and annoyed. This resulted in yet another downturn in the economy. The problem is most businesses are trying hard to recover from the loss. Thank God, the situation is better now!

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But, can you assure me that this scenario will not repeat? The answer is NO. Therefore, it’s high time that businesses should take a step back and reassess their activities. The best they can do is create a recession-proof compensation strategy; suitable to fight against any challenges in the coming days.

How to build a compensation strategy for the future?

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The last few years have been really tough for businesses to stand firm. The pandemic has left employees with high expectations regarding the value of their hard work. So, how can the HR leaders skip to the good part? Although it is difficult to reveal what’s in store next as a challenge for your business, considering these below factors will help boost employee engagement in long term.

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Respond Quickly

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Since the beginning of the pandemic, HR professionals were asked to settle in as fast as they can. But shifting economic scenarios requires adjustments, especially when you’re considering the budget. Doing such adjustments need over-corrections.

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Although quick responses are needed in difficult times, simultaneously, it is important to evolve and fix your long-term compensation strategy for the employees. 

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The decisions will have a long-term impact on your business, cost structure, and ability to attract employees. Right now, businesses are finding ways to manage compensation for employees. 

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Don’t take one-off decisions as employees resign without setting a clear objective. Decisions taken for new employees will shape the current cost structure. Therefore, it is challenging to respond to such scenarios and explain decisions logically to employees. One of the pros of having a compensation strategy is that it gives you the strength to respond accordingly to new situations.

Maintain a Total Rewards Mindset

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The strength of a pandemic or recession is already getting reflected in company budgets. This has created an impact on employee compensation and benefits. This may lead to a cut-off in payment, but even a small bump means a lot more to the employees.

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Therefore, having a total rewards mindset will help you deal with the situation in a better way. This will keep all the potential employees know of their value proposition. But don’t be afraid of making an end to lower impact activities to maintain the benefits employees enjoy.

Although incentives seem to be a difficult term during economic volatility, it is up to the leaders to give employees a reason to stay beyond the number on their salary. It can be a flexible stipend, financial wellness insurance, fertility benefits, sabbaticals, and prolonged leave options. Make sure that while taking final decisions, your approach is towards core values.

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Hiring a Third Party Can Help

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Most businesses don’t have full-time compensation managers. If you are running a small business, you may not be having a formalized compensation process. This is when you need someone to help you out with a compensation plan or strategy. 

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Hiring a compensation consultant will help conduct an objective pay analysis and will help clear your business objectives and recommend adjustments accordingly.

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Changes in the compensation strategy can lead to many effects. But an experienced consultant will help you stay away from pitfalls and recommend changes to deal with the situation. Don’t neglect the value of a partnership with the finance team. They play a crucial role in reshaping your company’s financial and headcount plan.

Focus On Compensation

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No matter what, compensation is always known for being the best way to judge our value and self-worth. Not feeling valued is one of the strongest reasons why employees resign. Make sure your company recognizes and values the hard work of employees, besides making strategic and data-backed decisions in setting an approach.

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Conclusion
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You must have heard the proverb saying “avoid doing what everyone else is doing”. When everyone is busy fighting against the pandemic, make sure your business is incorporating a new compensation strategy for the employees. The more you will give to the employees, the more you’ll get in return. Creating a recession-proof business will help defeat your competitors during difficult times.

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Find out how Compport can help you manage all your Pay Transparency process, book a demo today!
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                                   Frequently Asked Questions
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Q1.Why is compensation strategy important for business?

Building a proper compensation strategy will help your business stay ahead of competitors even in challenging times.

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Q2.How to reduce the financial effects on business?

• Focus on agility
• Find an alternative resource for revenue
• Reduce costs via technology
• Offering compensation will help

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Q3.What are the top two recession-proof industries?

Two recession-proof industries are Health care and Real Estate.