In an era known as "The Great Resignation," the ability to attract and retain talented workers is paramount. In an effort to differentiate themselves, many manufacturers have begun to adopt Pay For Skills programs to identify top talent and ensure they are compensated as such. Unlike traditional tenure or title-based compensation, these programs base wage-progression on quantifiable, unbiased skill attainment data. When structured correctly and driven by strategic workforce planning, these initiatives better align individual incentives with the current and future needs of the organization, while driving a merit-based culture and further motivating workers.
The first step in developing a Pay for Skills program is to understand role progression for each position in your organization. This requires not only a detailed understanding of current skill requirements but also where there are and will be skill gaps that need to be filled. Plant leadership can develop these progressions into two different categories. There are transferable skills that can be developed to drive a more agile workforce. Secondly, there are more role-specific skills. The progression of these qualifications is based on developing a deep level of understanding of a specific job or process. Every necessary skill for a role can be mapped out in the Covalent solution so that workers are well aware of what skills are needed and the required training to be qualified in each skill. From within Covalent, workers can keep track of their progress through clearly defined pathways and supervisors can review this progress against pre-defined benchmarks.
Once mapped, the program must be maintained to ensure long-term success. Plant leadership can manage pay rate increases from skill attainment by applying custom attributes in Covalent. This information can be consumed by payroll systems to automate pay-increases. Long-term maintenance of this program also helps promote buy-in across your workforce as they can see that their peers can continue to raise their pay by developing new skills. This not only ensures that the company has a highly trained workforce, but also promotes retention through unbiased wage progression.
Finally, plant leadership must always have a forward-looking view on the pay for skills program. Covalent enables plant leadership to accomplish this by forecasting and highlighting future skill gaps. Plant leadership can then install additional incentives for specific skill attainment to close these future skill gaps. Understanding industry trends, attrition risk, and operational changes can enable plant leadership to develop new pay for skills pathways and future-proof their workforce.
Developing and implementing pay for skills programs is not a small investment. Organizations must be prepared to invest time and resources into the proper personnel to manage these programs and communicate the benefits to workers. Without a sound foundation, it will not be easy to gain buy-in from your workforce and ensure the program's success. That being said, as many manufacturers are realizing that taking a thoughtful, data-driven approach to wage-progression can be a significant win for both the company and the worker. To learn more about how Covalent can help your organization with pay for skills programs, contact us here.
