How Does Compensation Impact Talent Attraction and Retention? Seeking Insights and Articles

Hi all,

I have been given a new project on "Implication of the new tax structure on attraction & retention of talent". This incorporates FBT and all. Actually, the importance of compensation in the attraction & retention of employees. I have got all info on FBT and other tax issues.

Can anyone please email me some articles on how compensation is used to attract & retain employees? The relationship between compensation and the attraction and retention of employees? Or even some opinions and views of the HR fraternity.

Thanks a ton,

Regards,
Kruti

Hello Kruti:

Case 1 - Competitive compensation will allow many applicants to accept your job offers.

Case 2 - Compensation that is too low will cause many applicants to reject your job offers.

Case 3 - Compensation that is too high will cause many applicants to accept your job offers.

In all three cases, compensation won't turn a bad hire into a good hire or cause good employees to stay if they are mismanaged.

Hi Kruti,

As the project concerns the new tax structure, you need to redraft the compensation structure of the firm to achieve the optimum salary structure. The best option would be to remove maximum items that attract the FBT from the salary structure and instead provide cash in the salary for the same, as the FBT is higher than personal tax.

Additionally, Sodexo has been removed from FBT, so giving maximum Sodexo (as most super malls nowadays accept Sodexo, which can save some tax for the employees) would be beneficial. Other benefits such as pick-up and drop services can be provided at cost, and the same can be deducted from the salary. This approach will reduce the commuting costs for employees and exempt the company from paying the FBT (Free car/subsidized car is taxable under FBT).

Similarly, the canteen facility can be offered at cost instead of at a subsidy. The amount of subsidy, if Sodexo is provided, is taxable under FBT.

Thank you.