Dateof submission:


Thispaper seeks to find out the human resources landscape which at themoment is experiencing rapid changes in the US economy. The immediateeffect of this dramatic twist of events in human resource managementhas prompted most companies to streamline its strategies, policies,roles and functions to conform to the current market standards. Humanresource management is a wide discipline that encompasses severalareas such as the Employment Law Manager and Employee Relations,PerformanceManagement Labor Relations, HR Consulting &amp OutsourcingSuccession Planning employee and compensation and benefits amongother areas (AREVIEW ON THE BENFITS OF TRAINING AND DEVELOPMENT FOR INDIVIDUALS,TEAMS, FIRMS, AND SOCIETY, 2014). In these different areas of humanresource management, employee compensation and benefits tops the listas the most variable sector in most companies and organizations. Assuch this paper will focus on this area of employee compensation andbenefits of human resource management which is a leading groundfacilitating the dynamic changes in the Human Resources landscape.

Humanresource management abbreviated as HRM or simply HR is the disciplineprovided for in any organization which is tasked to alleviate theperformance of employees in order to achieve strategic objectives ofthe organization or the employer (A REVIEW ON THE BENFITS OF TRAININGAND DEVELOPMENT FOR INDIVIDUALS, TEAMS, FIRMS, AND SOCIETY, 2014). HRbasically is focused on the people or employees management in anygiven organization with regard to achieving the set policies andstandards. This department carries out several activities such as employee recruitment, performance appraisal, employee development,training and rewarding (Dessler, 2000). In addition the HumanResource department handles any arising industrial relations whichinvolve the organization balancing its practices emerging fromcollective bargaining and from the government Laws (Dessler, 2000).

Sinceits inception in the early 20thcentury, HR was mainly concerned with transactional work with suchtask as benefits administration and payroll, but owing to increasedrate of globalization, Human Resource Management has undergonetremendous evolution and as of 2015, HR has broadens its initiativesto include talent management, diversity, mergers and acquisitions,succession planning, labour and industrial relations and inclusion (AREVIEW ON THE BENFITS OF TRAINING AND DEVELOPMENT FOR INDIVIDUALS,TEAMS, FIRMS, AND SOCIETY, 2014).

Thescope of this paper will solely focus on the recruitment compensationand benefits. It is an important tool that Companies utilized toattract, maintain and motivate its employees in a bid to attain itsobjectives and goals. Compensation refers to the employer monetarypayment of an employee for the work done over a certain period oftime while benefits refers to the non-financial form of compensationgiven to an employee in addition to the monetary salary in attempt toenrich and motives the workers (A REVIEW ON THE BENFITS OF TRAININGAND DEVELOPMENT FOR INDIVIDUALS, TEAMS, FIRMS, AND SOCIETY, 2014).

Reviewof literature

Therecruitment compensation and benefits has experienced tremendoustransformation in the recent years in many organizations in US. Thisquest to adopt new policies and strategies in the labour market islargely driven by the needs of the young professionals in search ofan improved working terms and conditions .They are aligning foremployment in companies with progressive benefits and compensationpackages which ultimately delivers new value proposition foremployees CITE. Currently compensation and benefits has evolved toinclude an ever broadening array of innovative packages which includejob sharing, incentivized performance, flexible working hours, moreopportunities for advancement, a vibrant culture that fetches higherproductivity among other packages (IndustrialRelations Services., &amp Synergy (Online service), 1990)

Thedifferent benefits are given to the employees based on theirmembership and in most cases it is based on the level of performanceof an employee but other benefits are strictly membership-based.Examples of these benefits include employee training, providingmobile phones to the employees and provision of two or three days’to rest in a month among others. Compensation and benefits packagesare designed to offer a number of benefits to the workers. Itprovides job satisfaction to the employees the employees feel asense of happiness in their positions and hence increase theircommitment to be more driven to work in exchange of the privilegesprovided.

Theemployees get motivated, after their needs are taken care, they willbecome more dedicated for service since they worry little about howto source extra money elsewhere. Firms that readily offer promotion,development, and learning will elevate the workers value and hencethe workers will become more motivated with such companies. Goodpackages of compensation and benefits significantly reduces the levelof absenteeism among workers, the employees would not be willing tomiss their work places bearing in mind they receive good salaries andother benefits. On the part of the employees, these improvedcompensation and benefits give them peace of mind and also increasethe employee self-confidence (Mondy at al., 2005).

Inthe healthcare industry compensation and benefits play a significantrole in recruiting and retaining of healthcare workers. Thehealthcare centers are often in competition to secure the besttalents in the market. But the employers in the healthcare believethis healthcare benefits bring an added burden and cost that resultto an increased expenditure (Bjork, 2012). This understanding by mosthealthcare providers failed to put into consideration that improvedcompensation and benefits offers the most powerful tool to attractand retain the best healthcare workers.

Thehealthcare centers are constantly in search of hiring the bestworkers, which proves to be the most difficult recruiting task forsmall healthcare providers (Bjork,2012). To compete well with the larger employers these smallorganizations provides highly unique and planned benefits of theiremployees. Despite a highly feasible benefit packages, top talentsare still reluctant to commit their services to this small centersdue to their little publicity (Bjork,2012).

Themost dynamic approach that has been adopted by most employers is totarget students and current experienced health professionals to fillfuture positions and vacant positions. An effective program thatfosters the health workers recruitment is provided for by the state,federal and local levels of governance. The benefits accorded includeloans, loan repayment programs, scholarships and signing bonuses.Healthcare centers and organizations at most cases may provideincentive programs which include improved total compensation,work-life balance support and mentorship by experienced healthcareproviders (Mondy at al., 2005). The recruitment program is anessential process due to several reasons. It facilitates theattainment of the right number and qualified personnel in order tooffer specialized services and care for the patients and ensuresthere is adequate diversity of providers (Mondy at al., 2005).

Theright compensation and benefits privileges are focused to retain thehealthcare workers employed in their healthcare centers andcommunities. To undertake this task the employers make appropriatematch of the potential candidates with the healthcare set standardsand expectations. For instance, the best examples of the retentionincentives that motivate workers to maintain their positions includeloyalty bonuses, work-life support, opportunities for careeradvancement, support for continuing education and competitive salaryand benefit programs (Gashi,2013).

Themain challenge faced by most organizations in the US currently is thespiraling cost and burden of compensation and benefits packages.Recruitment by most companies has been made a bottom priority due tothe unmanageable cost incurred. At the moment the rate ofunemployment is significantly high, and the labor market is floodedby job seekers with varied talents levels (Gashi, 2013). Owing tothis change, employers have rich selection pool of candidates. Tocushion the unsustainable level of cost, most companies are reducingsalaries and abolishing certain benefits to its new hires and currentemployees. These companies fully understand that its employees areready to accept the reduction due to unprecedented unemployment rate.

Costreduction proves to be an instant way to cushion the companiesagainst increasing cost, but this strategy offers short term solutionwith a number of risks coming along. According to Human resourceexperts, the challenge of high cost particularly at the lean timesshould not be an opportunity for employers to make excuse of pay cutsto its employees, the compensation and benefits that aresignificantly below their worth. The reduced cost proves to bedifficult to bounce back once from the operational standpoint oncethe economy resurges and the demand of services and products resumes(Gashi,2013).

Inthe event the wage and benefits reduction do not solve the prevailingspiraling cost, the companies have not hesitated to merge payrollaltogether. According to the Society for Human Resource Management(SHRM) poll conducted indicated that about 72% of companies in the USlayoff some of its staff as a means of saving staffing cost during aneconomic slump. It indicated that about 48% of other companiesadopted hiring freezes in such periods (Arthur,2001).

TheHuman Resource experts further highlights that in order to cushionagainst such sudden changes, they suggest that the companies shouldadopt feasible approaches. That is they are required to be flexiblewhen looking at the best possible technique of reducing cost andinstead choose a long term and the best futuristic approach whenperforming recruitment.

Thekind of recruitment done by the companies is influenced by culture,legal structures and economic development these factors dictate thekind of employees to be employed by companies that have internationaloperation. The international human resource managers have a difficulttask than their domestic counterparts due to varying cultures, legalsystems and economic development existing in different countries. Thecompanies will be required to adapt its hiring, training andcompensation program as dictated by the climate in each country(Arthur,2001). Different international companies will make a choice ofwhether to conduct a recruitment of its managers from the hostcountry, home country, or from another third country. Thecompensation set in place must meet and be in line with therequirements of each country labor market (Arthur,2001). The stated human resource management strategic significanceprovides an in depth understanding of strategic context of the HRMcontained within the company’s overall strategy, of selecting andrecruiting managerial personnel, offering appropriate development andtraining and examining their performance (Arthur,2001).


Therecruitment compensation and benefit plan serve as an important toolin employee attraction and retention. While many employees will shyaway from companies and firms giving poor compensation and benefitsprivileges, majority of the employees on the other hand will beattracted to companies offering better packages. Once employed,employee retention is largely dictated by the compensation providedbut this factor may not be always a true indicator. A closerevaluation of the compensation package reveals that it is composed ofa benefits, salary and wages thereby it is possible for employers toimprove it without necessarily increasing the cost(Armstrong&amp Cummins, 2011). And consequently with a good package ofcompensation, employees are more than likely to be retained.

Whena company retains its employees the overall cost saved issignificantly more compared to undertaking a replacement of thecurrent workers with new lower paid recruits (Armstrong &ampCummins, 2011). In essence there is always another cost incurred inthe recruitment process and training of the new employees, whichmakes the firm decrease its productivity in the long run. What ismore, the organization will lose the memory of that employee and ineffect may move to a competitor firm who will in turn improve itsshare market. The employee moving to another firm will not onlydeprive their current firm with their expertise but also that workermay move with some clients or customers to the new firm (Armstrong &ampCummins, 2011). This migration of workers, therefore, is an expensiveundertaking compared to improving the compensation packages to retainan employee.

Theimprovement of salary and wages obviously will attract and retain theemployees. At face value these seems to be true, provided thecompetitors are paying more. On the contrary it is not always true tolose workers purely on monetary terms, but employees are retained byprovision of a competitive package which involves making a comparisonwith that of the competitor companies (Biswas,2013). For instance, when other companies offers more basic salary but another offers more benefits which will contribute to reducedtaxes, the later company will give an improved financial package. Inaddition, giving bonuses or a little raise yearly provides theworkers with more incentives. The package provides the bestalternative to salary increment which will reduce the cost and in theprocess achieve the set policies and standards of the organization.

Whena firm gives more benefits to its employees, it reduces the overallcost incurred for retirement plan and healthcare(Biswas,2013). The employers giving more incentives through voluntarybenefits as dental, vision, and health insurance, will significantlyimproves the employee retention fully understanding that leaving thecompany will lose those benefits upon moving to another companywithout such privileges.

Thebest way forward to be adopted by companies to attract top talent isto offer training. Training improves their skills which in turn givesthem a chance to get promotion, to many workers this program motivatethem and consequently contribute to their retention. Companiesundertake this training program through tuition reimbursements, thatis taking their employees to seminars and workshops in order toassist them learn and obtain new skills that will help them becomemore productive at the work place (Biswas,2013). The company possessing a highly skilled work force saves thecost of recruiting experienced employees from outside and insteadmakes promotion of staff from within the company.

Thecompanies should tie their compensation packages to tenure. Thismotivates the employees to stay longer and makes them happy at theircurrent centers with little interest to seek new employer. As suchthis area of compensation and benefits packages need to be furtherresearched to ascertain the best form of privileges to attract newrecruits and consequently retain these employees (Biswas, 2013).


Itis apparent from the discussion that the recruitment compensation andbenefits is an area of human resource management that has experienceddramatic changes. It is an important tool that young professionalsuse as essential parameter to check on the best firms to settle foremployment. Also provided in the discussion in more details is theability of the companies to retain its employees. Firms with improvedcompensation privileges tend to maintain its employees compared toother competitor companies adopting poor policies on compensation andbenefits plans.

Totap top talents the companies have modified their benefits to includescholarships given to better performing candidates required tofurther their studies. Other benefits offered include loans, signingbonuses and loan repayments, these privileges attract the bestperforming students. In addition, these packages attract theexperienced workers to occupy vacant positions.

Onthe other hand, these privileges offered has increased theoperational cost in most companies which has prompted compensationreduction and seen some employees’ layoff in order to reduce thespiraling cost. But many human resource experts believe that is notthe best approach to handle rising operational cost. Instead theysuggest the best alternative is to strive to explore other ways ofmanaging increasing cost. The best strategy is not to increase basicsalary in a bid to retain employees but instead increasing benefitslike insurance and healthcare proves to be the best approach which inthe long run saves money incurred in the recruitment process andtraining programs of the new recruits.


AREVIEW ON THE BENFITS OF TRAINING AND DEVELOPMENT FOR INDIVIDUALS,TEAMS, FIRMS, AND SOCIETY. (2014). ELK Asia Pacific Journal Of HumanResource Management And Organisational Behaviour.doi:10.16962/eapjhrmob/issn.2394-0409/20140930.v1i1.02

Armstrong,M., &amp Cummins, A. (2011). The reward management toolkit: Astep-by-step guide to designing and delivering pay and benefits.London: Kogan Page.

Arthur,D. (2001). The employee recruitment and retention handbook. New York:AMACOM.

Biswas,B. (2013). Compensation and benefit design: Applying finance andaccounting principles to global human resource management systems.Upper Saddle River, N.J: FT Press.

Bjork,D. A. (2012). Healthcare executive compensation: A guide for leadersand trustees.

Dessler,G. (2000). Human resource management. Upper Saddle River, NJ:Prentice Hall

Gashi,R. (2013). Strategic Human Resources Management: Human Resources orHuman Capital. AJIS. doi:10.5901/ajis.2013.v2n9p88

IndustrialRelations Services., &amp Synergy (Online service). (1990). Humanresource management journal. London: Industrial Relations Servicesand Personnel Publications, Ltd.

Mondy,R., Noe, R., &amp Gowan, M. (2005). Human resource management. UpperSaddle River, N.J.: Pearson Prentice Hall.