Many HR practitioners who are tasked with compensation planning for their organizations are given a budget, but no strategy and no idea of where to start.
Sound like you? If so, you may benefit from hiring a compensation consultant. Compensation consultants help you develop a strategic approach to compensation and guide you in laying the groundwork for a competitive plan.
If you’re struggling to answer the questions below, skip the DIY method and reach out to us at MorganHR. We’re experienced in compensation consulting and can get you started on the right track.
Should you hire a compensation consultant? 6 Questions To Ask Yourself
If you’re asking yourself one or multiple of these questions, you likely need knowledge and expertise a compensation consultant offers:
- How do I figure out if we’re paying equitably?
- How do I know if the salary range I have to post is competitive?
- I’m trying to differentiate pay with my specific budget, and I know a group isn’t paid the correct amount. How can I solve that?
- Are promotions included as part of my budget? How do I know if a job is a promotion or not?
- Is there a way I can do compensation planning quickly, and without using spreadsheets?
- How should I communicate pay change news back to leaders who can relay it to employees in a clear and sensitive way?
How A Compensation Consultant Can Help
Small HR teams most likely don’t have a compensation-specific role, and they almost certainly don’t have a compensation team. So when they are tasked with compensation planning without any context around or understanding of the process, it can be an exercise in futility. For example, if an organization gives a 2% increase in compensation, but there’s no philosophy guiding the process and no training or conversations occurring with management, it can be difficult for management to explain the decisions being made.
Ultimately, compensation consulting (or lack thereof) can impact retention. When differentiation doesn’t occur, or managers don’t have meaningful conversations with employees around merit pay increases, trust suffers and employees are more likely to seek employment elsewhere.
With the assistance of a compensation consultant, however, an HR professional can learn the right questions to ask in order to address these important conversations around compensation and merit pay.
Compensation consultants like MorganHR can help you with two crucial pieces of the compensation puzzle:
Consultants facilitate conversations around job hierarchies.
These conversations help determine if jobs are promotions and ensures a level set of all jobs in an organization so there isn’t title inflation. When jobs are level set, employee pay feels fair, relevant, and accurate.
Consultants help your leaders align (or create) their compensation philosophy and process.
Consultants work with every level of your organization from the top down to create a compensation strategy. They assist leadership in molding a compensation philosophy and communicating it, ensuring the comp philosophy aligns with the business mission, vision, and values. They assist HR business partners in understanding the philosophy, codifying it into a process/handbook, and communicating it to the organization at large. They also instruct managers on how to answer questions about compensation.
What To Look For When Selecting A Compensation Consulting Firm
If what you’ve read so far gives you an inkling that perhaps you should investigate a compensation consulting firm, keep in mind the following things as you begin your search. In my experience leading compensation consulting firms, each of these items are deal breakers. If the firm you’re looking for doesn’t have them, keep searching for a better fit.
1. Is your consultant candidate listening to you well?
One of the most important things a firm can do is listen to you talk about your company’s situation and unique needs and tailor their questions around what you’re seeking. A consultant can’t do that unless they’re actively listening to what you’re saying. If they’re not listening to you—and are more focused on selling their products or services—that’s a red flag.
2. Do you have good chemistry with the consultant?
If you’re not engaged with your compensation consultancy or they’re not engaged with you, this is a red flag that you may not be a good fit. In my view, one of the biggest indicators of engagement is communication. Is my consultant responding to my messages quickly? Do I feel like I understand what they’re saying, and that they’re explaining it well? This connection piece is a make-or-break for me—if you’re tasked with helping me communicate something as crucial as compensation with my team, you need to have good baseline communication skills yourself.
3. Is the consultant focused on positively impacting your company’s culture?
The consultant you hire should want input on the culture of your organization. Any actions they take should involve getting buy-in from stakeholders and making leadership look as good as they can. Their mission should be to make your HR team and leadership shine—not themselves.
4. Do they have proof of their experience?
Your compensation consultant should be able to demonstrate their success with other clients of the same size and allow you the opportunity to speak with those clients. Similarly, they should be able to communicate their team’s expertise and experience. As you interview consultants, make sure you’re asking about their team’s industry experience, the frustrations they’ve encountered, and each team member’s strengths and expertise.
Compensation Consultants Who Make Pay Feel Right: MorganHR
Before joining the MorganHR team, I’d been in enough conversations with leaders who didn’t know why I’d received a pay increase to know that the compensation experience is integral—and I’d argue, the most important thing—in your organization. Building and communicating compensation infrastructure, training employees so the entire company understands compensation strategy, and ensuring your leadership is bought-in are crucial for attracting and retaining employees.
At MorganHR, we’re a compensation consulting firm that sets you up to be successful in all of these things. so you can avoid the agony of annual reviews and use them as an opportunity to differentiate pay. As a result, your employees will be more engaged and understand their importance to your organization, improving employee retention. We’ve helped dozens of companies in industries across the board, and we’d love the opportunity to show you what we can do to help you clarify your organization’s compensation philosophy and process.
Schedule a call with the MorganHR team to get started today.
