How to Create a Women-Inclusive Compensation & Benefits Strategy
Every time you need to hire a new employee or promote one internally, you have to consider their compensation and benefits package.
Compensation and benefits packages aren’t made out of thin air. They’re part of and include your salary structure. They also need to factor in hierarchy and job requirements.
In other words, compensation packages are all part of a company’s compensation and benefits strategy.
And in today’s job market, employees consider salaries as a main element but also other benefits your company has to offer.
Women, especially, want to see compensation and benefits packages that ensure their rights.
So, how can you create a compensation and benefits strategy that ensures equal pay?
In this article, we’ll cover the benefits of having a compensation and benefits strategy and answer the above questions.
What is a compensation and benefits strategy?
A compensation and benefits strategy is your approach to hiring and paying employees.
Compensation refers to the money or salary you’ll give each of your employees. Meanwhile, benefits refer to the perks employees get when working with you.
Benefits can vary from non-monetary benefits to monetary ones. They can include medical insurance, paid-for courses, employee engagement activities, among others.
Your compensation strategy should cover the different types of employees you hire or different work modes you rely on.
This means that while you’ll mainly offer compensation and benefits to full-time employees, it’s best to have a clear idea on how you’ll handle part-timers and freelancers.
What does a compensation and benefits strategy do?
Having a clear compensation and benefits strategy means
- Knowing what the salary ranges for each position and employee grade are.
- Being clear about the benefits you provide your employees, across your company’s hierarchy.
- Knowing how to calculate employee promotions and salary increases.
- Knowing how to calculate bonuses and commissions for employees.
Types of employee compensation strategies
To understand how employee compensation works, you must first understand how your employees work.
This gives you a clear picture of the requirements of the different jobs in your company and, accordingly, the types of compensation you can offer.
For example, if one of your teams has to work in shifts or employees have to work out of hours, your compensation and benefits strategy and packages have to accommodate that.
Let’s look at the 4 types of compensation strategies most companies have or use. Companies will often have a combination of these compensation methods
1) Salaried compensation
This is the basic form of compensation. Almost all job offers include the gross and net salaries along with the benefits accompanying that role.
It’s for candidates accepted into new positions and for employees who are promoted to new roles. They are offered a fixed salary based on a number of hours and days per week.
2) Per-hour compensation
This type of compensation isn’t common in Egypt or the Middle East. However, it’s the common compensation method in the United States and some parts of Europe.
With this method, you pey your employees, whether full-timers, part-timers, or even freelancers by the hour.
3) Commission-based compensation
This method is most commonly-used with sales executives and teams.
With commission-based compensation, sales employees get a basic salary, while the rest depends on the number of sales they complete each month.
Usually, sales executives and managers have a pre-determined target to achieve each month. However, if they achieve their target, they get paid more. If they fall below that target, they get their basic salary and the commissions of the sales they have achieved.
Bonuses come in various forms. Some bonuses can be at the end of the year, while others may be at the end of a month or when employees make a certain achievement or pass a goal.
Some companies give bonuses to an entire team or department.
Like commission-based pay, bonuses are considered variable pay. They’re not part of an employee’s basic salary.
Types of benefits companies can offer
Before we dive into how to create your compensation and benefits strategy, let’s look at the different benefits that companies may use.
Of course, you don’t have to have all of them. And you can easily add more benefits as your company grows and the number of employees increase.
It’s worth mentioning that some companies that are unable to offer high salaries may sometimes provide great benefits as a way of enticing candidates. However, this may not be a good strategy for all your employees or may not be suitable for your industry.
Company benefits can include:
- Medical insurance
- Vehicle allowance
- Driver allowance
- Gym membership or discounted options
- Beauty salon vouchers or discounts
- Life insurance
- Mobile phone allowance
- Travel opportunities or discounts
- Retirement plan
- Stock options
- Profit sharing
- Buy now, pay later (BNPL) options or partnerships
- Relocation expenses
- Education reimbursement (for courses or workshops)
Benefits may also include holidays and leave, such as:
- Paid time off
- Maternity leave
Time-off benefits do not include annual and sick leave, which are a government requirement and therefore not a benefit.
Other benefits may include:
- Work-from-home or remote work
- Hybrid work environment
How to create a compensation and benefits strategy
It’s time to create your company’s compensation and benefits strategy. We’ve divided the process into 9 steps including an optional step.
Step 1: Create a company hierarchy and structure
The first step in creating your compensation and benefits strategy is to create a hierarchy of jobs and roles in your company.
This hierarchy should be flexible enough to support the company’s growth. It should also factor in potential roles you may need to add in the coming 3 to 12 months.
Let’s say your company wants to increase the number of clients from 4 to 10 by the end of the year. These 6 new clients will need employees to manage their needs.
If you don’t hire people to accommodate your growth, you’ll be risking employee burnout and faster turnover.
This doesn’t mean you’ll need to hire these new people now, but you’re just including them in your hierarchy and later on your HR budget plan.
Step 2: Create a salary structure
After creating your hierarchy, create your salary grades and pay structure for this hierarchy and the roles you’ve defined.
To ensure your salaries are in line with the market, review salary surveys for the roles you have and those you’ll add later.
If you need help finding salary surveys for specific industries or jobs, get in touch with Tawzef.
Step 3: Identify the average age of your employees
To determine employee salaries, you need to consider the average age of your employees and the degree of their expertise.
This step helps you pinpoint a salary range for the different roles in your company.
Are you planning to hire juniors, fresh graduates, or employees with 2 to 3 years of experience?
Or are you looking for managerial-level employees?
It’s natural to have both in your company. However, you should know that the more experience you seek, the higher the salary you’ll have to pay.
If you’re looking for a person with 2-to-3 years of experience to be your marketing manager, you’d be looking for a unicorn. (And they don’t exist)
Step 4: Identify the compensation methods you’ll be using
Now, it’s time to determine which compensation methods you’ll be using to pay your employees.
Do you plan to have an annual raise for employees? and what about employee bonuses?
Will you have part-time employees? Or just full-time ones? Do any of the roles require hourly pay?
These are all questions you need to answer and include in your compensation and benefits strategy.
Step 5: Identify how commission-based payments will work
You should also note if compensation includes commission-based payments.
Does your hierarchy include a sales team? Will this be the only team getting commissions for their sales? Or will your partnerships team also get commissions?
If you’ll be offering commissions to certain teams, what will be the criteria for awarding them with these commissions? Once a new client signs a contract?
Will they get commissions once or for the duration of the contract? and will they get commissions at the end of each month or once every quarter?
Step 6: Review competitors’ benefits and offerings
An important step in creating your company’s compensation and benefits strategy is to see what your competitors are doing.
What do they offer as compensation to their employees? Do they offer benefits and what do their employees think of those benefits?
Step 7: Choose the benefits you’ll offer
After you’ve completed the above steps, it’s time to see what benefits you’ll offer your employees.
You can review the benefits you can offer your employees from the list above.
Most companies offer company-wide benefits like medical insurance. Then, there are other benefits that vary based on an employee’s salary grade. Benefits like gym memberships or travel benefits or BNPL options.
By including benefits like these in your compensation and benefits packages, you incentivize potential candidates to join your company.
It’s also important to consider your outsourced employees as part of your company and team. If you’re working with a manpower outsourcing agency like Tawzef, you can choose to provide your outsourced employees with benefits like internal employees.
This will help you keep your external or outsourced employees for longer, which in turn can translate to better customer retention, experience, and more sales.
Step 8: Consider an employee engagement and rewards program
This is the optional step but it’s one to consider when your company grows and adds more employees.
Employee engagement isn’t just about making employees happy. It’s about building enthusiasm and dedication towards their job and the work they do.
“Engaged employees care about their work and about the performance of the company, and feel that their efforts make a difference.” (Investopedia)
Employee engagement activities can range from team-building activities, to workshops, to special employee events like Christmas.
Step 9: Set and review KPIs
The final step in creating your compensation and benefits strategy is measuring its impact and seeing if it’s successful or not.
To do that, you’ll need to lay down the key performance indicators (KPIs).
The KPIs for your compensation and benefits scheme should measure both the compensation element and the benefits aspect.
As your company grows, your compensation and benefits KPIs should be flexible to accommodate that growth.
Make your compensation & benefits strategy inclusive for women
When building a company’s compensation and benefits packages and strategy, it’s important that you also identify your different employees’ needs.
Today, women work in almost all industries. Their workloads affect them personally and professionally.
Most business owners don’t consider that women have lives outside of work. These lives can include aging parents, ill siblings, children, or personal mental health.
And while men may struggle with these same, many often forget that the load is doubled for women.
Here are a few more tips and steps to include in your compensation and benefits strategy that make your business inclusive and considerate of women and their needs.
1) Ask women about their problems
The first step is to look at women’s needs in your market and industry. Some industries may require women to travel long distances or work longer hours.
The best way to do this is to ask your current employees about their problems – at or with work. What can you as a company do better that would improve their performance?
Sometimes it can be as simple as letting women work from home or offering a hybrid work environment.
Reviewing your competitors’ benefits may also help you in this situation. By knowing what your competitors are doing, you can offer similar or better benefits.
2) Women-specific days off
It’s no surprise nor is there any shame in admitting, women struggle every month due to their time-of-the-month.
You can give women 2 or 3 days each month. Make it more appealing by not subtracting it from their annual leaves.
It can be considered as additional sick days or it could be divided into 1 day from their annual leave and 1 extra sick day each month.
3) Child care leave
Child care leave is the 1 hour women get after they give birth and finish their maternity leave.
In Egypt, the labor law offers women a 1-hour early leave every day for 2 years. Alternatively, they can come in 1 hour late.
In other words, their working hours are reduced to 7 hours each day so they can care for their children.
As a company, you can provide an additional benefit by increasing the number of child care leave hours, providing women with discounts to daycare centers or something else.
You can even have an in-house day care center for working women and working parents in general.
4) Extend your medical insurance to cover pregnancy and birth
One of the biggest problems working parents struggle with is getting healthcare insurance to cover a portion of women’s pregnancy and birth costs.
The costs of tests for mother and baby and for a Cesarean section (C-Section) are quite expensive in hospitals all over the world. Helping parents, especially women, by covering some or all the costs of these tests and this procedure can go a long way into making your company more desirable to work for.
As you can see some of these benefits can be offered to men so they can support their wives and families.
Why do you need a compensation and benefits strategy?
You may be wondering how a compensation and benefits strategy helps your business. It’s a lot of work, why do you need it? Is it just to make employees happy?
The answer is ‘No. It’s not just that.’
There are 4 main benefits to having a compensation and benefits strategy, specifically one that considers women and their needs.
1) Employee retention
One of the top benefits of having a compensation strategy is that it helps you retain employees for longer.
When employees join your company, discover your company culture, and see how it builds-up employees and their careers, it entices them to stay longer.
Having a clear hierarchy and pay structure keeps employees motivated and helps advance their careers and skills in your company.
2) Attracting talents
When you offer attractive benefits, candidates want to work for you. They hear about the good things you do and offer and work harder to become a part of your team.
People want to join your company because you have great branding and benefits.
3) Increase morale and engagement
Incentivizing your compensation and benefits schemes increases your employees’ morale, keeps them challenged and motivated.
Whether you have an in-house ping pong table for employees, a PlayStation room, a break room with coffee, all of this increases engagement and collaboration.
Offering regular workshops that help employees grow professionally and improves their interpersonal skills is another way to do so. You can offer opportunities like special events or outings or educational options, both count as engagement and reduce employee turnover and improve your branding.
4) Builds employer branding
How many times have you seen or read ‘The Best Places to Work’ reports? It’s an annual global report, with some editions released for the Middle East.
Employees love to read these reports and want to join these companies named ‘best places to work.’
These companies have achieved what few companies in the Middle East even consider achieving. They’ve created an environment that attracts and retains employees.
Moreover they’ve transformed the so-called 9-to-5 grind into an opportunity for employees to build, get creative, and grow both personally and professionally.
And also, they’ve built an employer brand that makes current employees stay and that entice potential candidates to apply and join.
Having a clear and well-executed compensation and benefits strategy that takes the needs of women and the disabled into consideration improves your employer branding and achieves those results.
An effective and well-thought-out compensation and benefits strategy helps you increase employee retention.
Having a clear compensation and benefits scheme for the different roles in your company helps you as a business owner and support your HR team.
All the benefits for compensation and benefits support each other. The longer employees stay with you, the more your company is seen as a stable work environment.
And the more people see you as a company offering stability, the more likely you are to attract top talent who want to spend years working for your company.
By avoiding the mistakes employers make during recruitment and keeping your employees happy and motivated, you can reduce burnout and, accordingly, turnover. This translates to fewer hiring and administration costs for your company.
If you need help creating a compensation and benefits strategy for your company, reach out to the Tawzef team. We’ll help you create and manage compensation and benefits to ensure you make the most of your offerings.