It is, by most accounts, the single greatest challenge across the kitchen and bath market spectrum – hiring and retaining a workforce that is, at once, highly skilled, performance-driven and committed to their employer’s long-term success.
That’s why, perhaps more than ever, it’s essential in 2024 that companies think outside the box when it comes to implementing compensation strategies aimed at enhancing productivity, motivating employees, reducing attrition and recruiting new talent.
The concomitant issues of labor shortages, compensation strategies and employee retention each lie at the heart of recent nationwide surveys by Kitchen & Bath Design News and the National Kitchen & Bath Association, as well as within an American Institute of Architects’ report that offers key insights into how architectural firms are addressing employee compensation in the face of current workplace issues.
Indeed, according to both the KBDN and NKBA surveys, the current dearth of in-house employees, as well as subcontractors in many key trades, is palpably impacting kitchen and bath design firms of all sizes, market niches and specialties – with business owners scrambling to implement successful strategies for mitigating what has become a generational challenge.
For example, according to the NKBA, surveyed kitchen and bath firms, faced with worker shortages, expect to raise their hourly wages by 4.9% on average in 2024 – even as other companies are stepping up their marketing and networking efforts to recruit skilled workers, developing apprenticeship and in-house training programs, increasing their oversight on scheduling, and introducing compensation strategies aimed at incentivizing today’s post-pandemic workforce.
According to the AIA, while recent compensation gains have failed in most cases to keep pace with cost-of-living increases, there has been a significant increase in architectural firms offering innovative “quality-of-life” benefits such as casual dress policies, child- and pet-friendly offices, flexible scheduling and similar new-age perks.
A sizable percentage of AIA-member firms also report creating a better pipeline to part-time employment for students, while addressing gender and racial pay gaps, helping their workforce navigate childcare and other family needs, and offering salary premiums based on professional accreditation. Architectural firms, like others across America, are also grappling with the continued evolution to a hybrid workplace, in which a vast majority of employees wish to continue working at least part-time from home.
In short, the age-old way of compensating workers – through base salary and common benefits such as healthcare coverage and paid time off – is rapidly morphing in the face of heightened competition for fewer workers, a cultural shift in Americans’ attitude toward work, and a vicious cycle of employee turnover and ennui.
There are myriad compensation models, and an equally wide range of factors, to consider as companies attempt to navigate today’s challenging workplace realities – from simple hourly compensation for entry-level positions to variable pay programs featuring performance-based commissions, incentive bonuses and profit sharing for senior-level personnel. Companies must also consider what kinds of benefits – for example, health insurance, retirement incentives, flexible work hours, subsidized transportation, and tuition reimbursement, among other perks – are most appealing to their workforce’s specific demographics.
It’s up to corporate management to research current and emerging industry trends, conduct competitive benchmarking, define pay grades based on job requirements and experience, and implement a compensation strategy that aligns with their company’s corporate mission, helps define its culture and reputation, and allows employees to feel valued, motivated and rewarded for their efforts.
Addressing workplace issues will doubtless require design firms and other companies to implement flexible and creative new strategies for recruiting, attracting and retaining qualified talent, boosting morale and setting themselves apart from their competitors.
Deciding how to compensate their people should be a top priority for business leaders across the kitchen and bath industry, both in 2024 and for the foreseeable future. ▪