If you've recently posted a job opening at your organization and are surprised (or disappointed) by how few "bites" you're receiving in response, you may be considering expanding your geographical range to include more candidates from farther-flung areas. However, many qualified candidates may be less willing to consider a permanent relocation without the prospect of being reimbursed through an employer's relocation package. Read on to learn more about adding to your compensation packages for prospective employees, as well as some situations in which you may benefit from a second opinion.
What Should You Consider When Changing Your Employee Compensation Packages?
Many small businesses function best when employee compensation is simple; offering an hourly wage or weekly salary and predictable hours without muddying the waters with 401(k) matches, health savings account contributions, or other types of fringe benefits.
However, those in competitive industries or job markets may find it tough to attract the talent needed without adding benefits more comparable to those offered by industry giants. In these situations, expanding the compensation package to include various perks and non-salary benefits can be beneficial both from a recruiting and a retention standpoint. Because it can be expensive to go through the interviewing, hiring, and training process multiple times in quick succession, it's important to ensure that you're selecting an employee who is in it for the long haul.
You may want to provide some further incentive to ensure your prospective employees stick it out by requiring them to sign a contract prior to offering a relocation package. If you require your employee to repay a portion of the relocation expenses you've covered if he or she quits (or is fired) within just a few months, you'll be able to limit your financial exposure and prevent your business from being used as a launching point by someone who was already seeking to relocate to your state.
There are also some tax considerations to keep in mind if you're offering a relocation package. By requiring your prospective employee to account for the funds spent (rather than just providing the employee with a lump-sum bonus designed to cover these expenses), you should be able to deduct a portion of these expenses just as the employee would be able to deduct moving expenses paid out of pocket.
This means that offering a relocation package to out-of-state employees can often be a more cost-effective option than increasing the salary offer (which will be locked in going forward) or providing other fringe benefits.
Should You Get A Second Opinion?
Often, making a big change to your employee compensation strategy can have some unintended consequences. A compensation consultant can work with you to evaluate the pay ranges and fringe benefits being offered to your current employees and determine whether any changes should be made (or reversed) to minimize your liability for pay-related lawsuits and cut down on friction between staff members due to disparities in pay scale or the scope of responsibilities.
Compensation consultants can also serve as your internal resource into what other business in your region and industry are paying their employees, ensuring that your salary offers are within the range of your competitors. You may be surprised to learn that your business's wages aren't as competitive as you thought, which could explain any trouble you may be having when it comes to keeping talented employees on staff for the long term. After bringing a compensation consultant onto your decision-making team, you'll be far better equipped to negotiate salaries and benefits with some of the top workers in your industry.
By working with a compensation consultant from companies like Fox Lawson & Associates, A Division of Gallagher Benefit Services Inc. to design your company's perfect relocation package, you'll be able to rest assured that you've done all you can to maximize your business's ability to attract, recruit, and retain out-of-state talent.Share