How to Revise Your Compensation Strategy for DFW’s Rising Salaries

October 25, 2017
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A competitive compensation strategy is a vital element in attracting and retaining the best talent. As that talent becomes harder to acquire in the Dallas market – with low unemployment and rising wages – it becomes even more important to refine your strategy in order to stay well-staffed.

The latest compensation data from the U.S. Bureau of Labor Statistics shows that Dallas metropolitan area wages and salaries advanced at a 3.1 percent pace for the 12-month period ended in June 2017. This outpaced the national growth of 2.4 percent during the same period. Of 15 major metropolitan areas studied by the BLS, just three outperformed Dallas: Seattle, Miami, and New York.

In light of the performance of the local economy, employers may need to take the following steps to ensure compensation strategies are competitive:

  1. Benchmark Salaries by Position: Using a variety of online salary data sources, including Payscale, Salary.com, Salarygenius, and Glassdoor, update your pay grades and ranges for each of your current and for-hire positions. Working with the averages from each of these sources or the source you find most accurate, compare your employees’ compensation with the benchmarks for the same or similar jobs within your industry. This will enable you to identify compensation inequities and determine which of your high-performing employees are most at-risk for leaving.
  1. Determine Compensation Allocation: As the cost of healthcare and other benefits rise, your employees will likely value your contributions to certain benefits more than they did one year ago. In other words, if healthcare as a percentage of the compensation budget was 6 percent last year, you may benefit more from raising that budget segment 2 percent than from raising salaries 2 percent. The objectives are to be competitive with other local employers with retirement, health, tuition reimbursement and other benefits known to be important to DFW employees.
  1. Adjust Your Performance Management System: Employee performance must always be judged in light of changes in the global, national, and local economy, along with the strength of your particular industry. The development of annual goals for employees and management’s assessment against these goals must factor in current and projected conditions.
  1. Communicate Changes Throughout Your Organization: When you do all of the work involved in maintaining and updating a successful compensation strategy, share your findings with your employees. Communicate how important talent retention is to your organization and why you are making the necessary investments in employee compensation.

Local market conditions are just one reason to revisit your compensation strategy. For employee retention, it is always easier to make continual incremental adjustments than to make sudden major alterations.