You Don’t Need Big-Company Budgets to Build a Competitive Compensation Package

I was thrilled to land my first job out of college. It was a leadership role with a salary and benefits and I couldn’t wait to start. During the offer, they reviewed everything: salary, health insurance, vacation, holidays, and a $10,000 life insurance policy. I remember thinking, I’m young and healthy. Why do I need this?

Years later, I received another offer. This time, the benefits package included pet insurance. I had pets, but I chose my own policy instead. Later, when I became the HR leader, I noticed one employee was enrolled in Company-provided pet insurance.

Both benefits were well-intended, though they didn’t add much value for most employees.

I’ve seen companies overspend on trendy add-ons while overlooking what their employees want:

• Clear career paths

• Skill development

• Consistent leadership.

You may be losing good employees while paying for benefits they don’t even value.

I hear, “We can’t compete with the big companies on salary.” That may be true. But compensation is more than salary. Large companies may win on base pay. Smaller companies can win on design. I’ve also heard employers say, “everyone’s leaving because we can’t pay higher wages.” Employees rarely leave for one reason alone. It’s usually a mix of pay, growth, flexibility, and feeling valued. 

Your total compensation includes:

• Paid time off

• Retirement plan (401(k),IRA, etc)

• Flexibility

• Career growth opportunities

• Development and cross-training

• Culture and leadership access

• Meaningful work

• Health and supplemental benefits

Common pitfalls that businesses fall into when thinking about wages and benefits:

• Focusing on salary alone

• Saying “we can’t compete.”

• Failing to see the full picture

• Failing to communicate the value to employees

• Inconsistently applying policies

• Not offering career development paths

If you’re a small or mid-sized employer, here’s where to start:

1. Audit your current compensation and benefits.

2. Benchmark salaries realistically for your market.

3. Ask employees what they actually want.

4. Eliminate underused benefits.

You may not be able to “compete with the big companies” on wages and benefits, but you can compete with a fair total compensation structure. Be clear about what you offer, make sure it supports your business goals, and design it with purpose.

Reinvest in what drives retention.  If you haven’t reviewed your total compensation strategy recently, now may be the time. Let’s talk.