Challenge:
A privately held company in the transportation industry had been shipping products across the United States to various companies for decades. Despite a strong legacy and consistent growth, the company faced significant challenges in hiring and retaining key employees, particularly field employees. As the company expanded, it recognized the need to modernize its approach to compensation to remain competitive in a rapidly changing market.
The company’s compensation structure had not been updated in many years, and it lacked alignment with industry standards. While the company had a loyal workforce, they were struggling to attract new talent and retain their existing employees, particularly in critical operational roles. Field employees, in particular, were experiencing turnover, which impacted the company’s ability to maintain productivity and service quality.
With an outdated pay structure and no dedicated compensation department, the company needed expert guidance on ensuring their pay levels were competitive and that their pay structure was aligned with market expectations. The goal was to create a compensation system that was fair, attractive to new hires, and capable of supporting long-term employee retention.
Solution:
NBBS was brought in to conduct a comprehensive review of the company's compensation strategy. The process involved several key steps:
Collecting Job Descriptions: NBBS started by gathering detailed job descriptions for all positions, including both corporate and field employees. This helped to understand the specific responsibilities, skill sets, and qualifications required for each role, providing a baseline for further analysis.
Benchmarking Compensation Levels: We performed thorough benchmarking against industry standards and competitors in the specific sectors. This analysis helped to identify where the company’s pay levels stood in comparison to others in the same market. By collecting compensation data from similar-sized companies across the region, NBBS was able to offer valuable insights into current pay trends, including base salaries, bonuses, and benefits packages.
Designing a New Pay Structure: Based on the benchmarking analysis, we were able to develop a new pay structure that aligned with industry standards and the company's financial capabilities. This new structure took into account factors such as geographic location, job responsibilities, market demand for specific skills, and the company’s growth trajectory.
Cost Analysis: We also analyzed the financial impact of implementing the new pay structure. We worked with the HR team to model the cost of adjustments, factoring in the budget for the upcoming year, to ensure the company could transition to the new structure without exceeding its budgetary limits.
Implementation Strategy: Finally, we developed a clear implementation strategy for rolling out the new pay structure. This included integrating the new structure into the company's budgeting and annual merit processes, ensuring that employees were compensated fairly in line with their contributions and the company's financial health. We also created targeted communication for employees, supervisors, managers, and executives to help with their understanding of the new compensation structure.
Result:
The company successfully implemented the new pay structure as part of its budgeting and annual merit process. The updated pay levels were immediately recognized as competitive within the industry, helping the company to attract top-tier talent and retain key employees.
One of the more significant outcomes was that the company did not have a compensation manager or a dedicated HR department for compensation matters. Recognizing the need for ongoing support in this area, they hired NBBS as an outsourced partner to handle all compensation-related needs moving forward.
This partnership ensured that the company could maintain a competitive compensation strategy without the need to hire additional internal staff. By leveraging NBBS’s expertise, the company could continue to adapt its pay structure as market conditions and internal needs evolve.
Competitive Compensation: The updated pay structure allowed the company to remain competitive in the labor market, addressing the challenges of hiring and retaining talent.
Cost-Effective: By conducting a thorough cost analysis, we helped the company implement a new pay structure within budget constraints, minimizing financial strain.
Ongoing Support: The decision to outsource compensation management to us ensured the company could focus on its core business while maintaining an up-to-date and strategic approach to employee compensation.
Ultimately, the company is now better positioned to continue its growth trajectory with a workforce that is motivated, engaged, and compensated fairly for their contributions.