Monday, 02 September 2019
Beyond the Paycheck - Designing a Great Tech Compensation Package
by Paul Murphy
According to the Australian Computer Society, Australia needs 100,000 additional tech workers by 2023.
However, only 4,000 new grads are joining the workforce every year.
That means the supply of tech talent is falling dangerously short of demand… approximately 84,000 qualified IT employees short.
Needless to say, attracting tech talent to the insurance sector is more difficult than ever in 2019.
With the demand for top tech talent so strong, companies need to be ultra-competitive to attract the best people. But what can you do beyond throwing more money at candidates to attract them to the role you urgently need filled?
You need to think in terms of offering a package, not just a salary.
Yes, salary is still an important part of compensation. But if you’re trying to attract a top performing tech candidate and there are several companies offering the market rate, suddenly the perks and benefits become a huge factor in determining which role they choose.
So how do you go about designing that kind of package?
In this blog, we will introduce a few ways can you design a highly attractive package for your next dream candidate AND get them to say yes to your offer without paying for it.
Know what job seekers are really looking for
Before we get started, it’s important to note that everyone is different. The package that attracts one IT professional won’t appeal to the next. But there are a few key perks and benefits worth adding to your compensation toolkit so you can include them in a personalised job offer.
According to Stack Overflow’s 2018 global tech hiring landscape, tech talent assess potential jobs on a range of different factors.
The study found the top 5 things people look for when changing roles are:
- Compensation and benefits - 18% of respondents identified this as the highest priority when looking for new roles. When broken down, 70.2% of respondents said a good salary and/or bonus was the most important consideration here, followed by whether the company offers health insurance (8.6%). Childcare benefits (1.1%) and company provided meals or snacks (1.4%) were ranked as least important.
- The technology used - 17% of respondents identified this as the highest priority when looking for new roles. This includes such factors as the programming languages and frameworks they’ll be using. In a sector where trends in the predominant languages used can change quickly, this can be a very important factor for many candidates looking to work or specialise in the most in-demand languages.
- Opportunities for professional development - 16% of respondents identified this as the highest priority when looking for new roles. Job satisfaction is strongly linked to people feeling there are opportunities for them to progress in their career.
- The office environment or company culture - 14% of respondents identified this as the highest priority when looking for new roles. The tech sector has played a major role in transforming the modern office environment and work culture. So yes, a ping pong table or staff recognition program can make a big difference to how people view your company.
- The opportunity to work from home/remotely - 10% of respondents identified this as the highest priority when looking for new roles. With commuting times constantly increasing in major cities and people trying to restructure their lives to create a better work/life balance, the ability to work remotely or from the comfort of home one or two days a week is increasingly a high priority for many candidates.
So while salary will always form a major part of the attractiveness of any package, don’t forget about other potential priorities. Especially the top 5 factors outlined above, which have been specifically reported by current tech professionals as being most important to them.
It’s one thing to know what tech talent as a collective are looking for, but more importantly, you should delve into what your interviewee is looking for in their next role.
During the interview, you should not only be assessing the person’s technical suitability for the role, you should be asking questions that give you a deeper understanding what they are looking for from you. Do they have kids? Is their commute long? Do they need extra leave? Are they interested in learning or working in a specific programming language?
These are the questions that will give you an insight into what their priorities are and what kind of benefits likely appeal to them most. So try and find out answers to as many of these types of questions as you can without being too forward. You don’t want to seem like you’re probing, but people also genuinely appreciate being asked about their personal interests and hobbies and what their priorities are.
Crafting a customised offer
First things first, you need to take into account your budget. Don’t offer what you can’t afford. So know the maximum you have available and then use other aspects of the package to make it more attractive to the individual.
Since you’ve already developed a few insights into the candidate during the interview, you should now have an idea about what they most value in life. So some of the things you might consider in your customer offer are:
Do they need flexible working hours to get to and from work because of a long commute?
Are they in the early stages of their career and would value extra training or career development courses?
Are they interested in working in or improving their skills in particular programming languages or frameworks?
Does one of their hobbies take a lot of time so they might highly value a paid week to spend on their hobby?
Maybe they want to trade an extra week of leave for a paid training course they would like to do?
Include these in your offer.
But don’t just include them. Make sure you talk your candidate through their offer and explain why you chose those benefits. Make sure you ask them if those benefits meet their needs, or if they had something else in mind! That’s true flexibility.
You should also be prepared to continue to be flexible after you take on a new hire. You should be ok with allowing staff to trade-in existing benefits for new benefits from time to time.
Another positive of this approach is that your company starts to become more widely known for offering good benefits, and you will begin to find it easier to recruit top talent in the future. And you may even start to notice some positive effects with respect to your brand and marketing.
When you find the talent you’re looking for, don’t forget that to actually land the candidate you need to be quick and decisive. Gartner research has found that that the amount of time it takes a hiring manager to make an offer after interviewing is now 33 days, which is an 84% increase from 2010 to 2018. With increasing numbers of tech candidates also considering multiple offers - 92% compared to 61% in 2016, this means you need to be prepared to act fast or risk missing out.
Decisive hiring managers show traits that not only benefit landing the best candidates but also demonstrate other valuable characteristics such as focusing on future talent needs, engaging with candidates, and sharing hiring decisions across the organisation. Each of these approaches will help ensure better long term planning so talent shortages don’t become dire and help establish a good hiring culture within the organisation.
If you want to learn more about the current state of the insurance market and find out how Ensure can help you source the best tech talent, get in contact here.