Compensation Consultants for
Growing Private Companies
Is your company seeking specialized advice
for creating strategic compensation systems?
The POE Group can help.
Our firm understands the unique challenges faced by
private companies and we use our 25+ years of
experience to provide valuable insight and direction
for our clients.
Get Compensation Strategies and Insights
Tailored to Privately Owned Companies
When you consider that compensation can account for over 60% of total business costs, an effective pay program is critical to the success of companies.
What are the compensation challenges facing your privately owned company?
As private companies grow, they face issues that require compensation solutions – specifically to attracting, motivating, and retaining top talent. Developing a compensation approach that links to your company culture and business plan is vital to maximize the ROI of your compensation expense.
Businesses evolve either through growth, strategic change, or a change in management. Compensation programs should also evolve to support these changes.
Private companies may find that they struggle to hire top talent, and have high turnover, or low employee satisfaction – many of them could benefit from adopting three practices commonly used by public companies in order to maximize the return from their compensation systems.
How private companies should act like public companies to get the most from their compensation systems
1. Establish a Foundational Total Rewards Strategy
Companies differ significantly in their size, industry, culture, and place in their business life cycle.
A well-crafted total reward strategy considers a company’s business strategy, values, and demographics, as well as the capabilities of the workforce. Relevant external factors such as available talent, governmental regulations, and competition are also important.
The outcome is a strategy document that articulates the various components of total rewards and their relative importance to an approach that is unique to the company.
2. Consider All Available Levers in Designing Reward Programs
All of the different components of total rewards (salary, bonus, long-term incentives, and benefits) should be considered as part of a comprehensive approach.
In our experience, private companies tend to rely predominantly on base salary and benefits in their reward programs.
Depending on the level of the position, variable pay (short- and long-term incentives) should be leveraged to create a link between pay and performance, especially for senior management. The short- and long-term plan design alternatives are almost limitless for private companies.
3. Add an Appropriate Level of Structure and Governance Processes
Companies often don’t add structure to their pay systems until they feel the pain of increased employee pay issues and realize that something has to change.
Although there is no bright-line rule, our experience is that this occurs when the workforce population approximates 50 employees.
Adding an appropriate degree of structure to compensation programs can lead to increased employee understanding and satisfaction with pay programs. Pay practices should address processes such as merit pay, promotions, and new hire rates.
Partner with the POE Group to maximize the return of your compensation systems
Private companies have the advantage of less outside regulation and the ability to evolve their pay systems more quickly compared to public companies. They can leverage these characteristics and strengthen their compensation systems by adopting the three practices listed above.
One area where we often see private companies fall short is in-house compensation expertise, or their human resources team's ability to find the time to advance compensations projects. In these situations, bringing in an outside consultant allows compensation initiatives to successfully move forward.
A strategic compensation system that tailors pay systems to the unique culture of the firm, links pay to performance, and is communicated so that employees understand their stake in the program creates a win/win scenario for companies and their employees.
Do You Have Comp Questions About Your Private Firm?
Talk to Joe.
We know that compensation can be complex,
but we're here to help. Let's talk today with
a Free 30-Minute Consultation.
Call 813-661-3111 to speak directly with Joe Kager, Managing Consultant of the POE Group.
Joe Kager, CCP
POE Group Managing Consultant
We work with companies, large and small, across all industries and throughout the United States.
Further reading for Private Companies seeking insight on compensation systems
POE Group Blog: Think Public in Designing Private Company Pay Programs
Chief Executive Magazine: How Private Companies Can Lead on Executive Pay