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Aligning Compensation with Recruitment and Retention Goals

The Role of Compensation in Hiring and Retention

Compensation isn’t just a line item on your to-do list — it’s one of the most important tools a company has for attracting the right people and keeping them on board. Your ability to offer competitive, fair, and transparent pay can make or break your hiring pipeline and long-term retention.

This guide shares 5 steps for connecting your compensation strategy directly to recruitment and retention goals, and why that connection matters more than ever.

Step 1: Define Your Recruitment & Retention Strategy

You can’t align comp with hiring and retention unless you know what you’re aiming for. If you ask any company what their talent goals are, one resoundingly common answer will be, “we want to attract top talent.” Which is usually closely followed by, “but we have to work within our budget.”

This is where talent strategy comes into play. Companies need to build understanding around which roles are the most impactful for the business, where they’re recruiting (e.g., direct from college, through apprenticeships, from competitors, from outside the industry, etc.), job architecture and career paths, and of course, how employees are being rewarded for their work. 
As you’re focusing in on retention and recruitment specifically, a few questions to consider include:

  • How quickly do you need to hire key roles?
  • What’s your target for offer acceptance rates?

  • Where are you seeing regrettable attrition?

  • Are there patterns in where (and why) people leave?


Talent Meets Comp

Once you have the answers, your compensation strategy should support these hiring and retention goals.

Comp teams need to have a fundamental understanding of their organization’s talent goals and how their work impacts it. Conversely, HR teams and hiring managers need to understand the company’s comp philosophy to help ensure pay is fair and equitable across the organization and effectively communicate compensation decisions.

That understanding will help HR and compensation work together to offer competitive ranges for in-demand roles, build and maintain a consistent internal structure, and give managers the confidence to make fast, fair offers. Compensation is a gatekeeper or conversation-opener when it comes to hiring and retaining top talent, which means lining up your compensation philosophy and people goals is imperative for growth.

For example:

How Comp Supports Success

Identify if there are key areas where new grad talent has the greatest business impact. Compensation and HR work together to develop a job or job family-based plan where a percentage of entry-level hires in key job families or roles have a higher range relative to the market, while less business-critical roles have ranges that top out lower.

Remember, there are a lot of reasons people choose a given company. Collaborate across Compensation, Total Rewards, and Talent Management to look at options like hiring bonuses, variable compensation, long-term compensation/equity, benefits, perks, career pathing, learning and development opportunities, and more to aid in achieving the goal.

How Comp Supports Success

Markets move quickly, and pay compression and/or the perception of pay not being market-competitive can be a major factor in an employee’s decision to leave. Being proactive to maintain a positive employee outlook on compensation could mean adding a mid-year pay event, utilizing real-time data to regularly confirm market alignment, equipping managers to handle questions and conversations around comp, or improving internal transparency and communication about your compensation strategy.

How Comp Supports Success

Often part of the challenge with speed to offer is a misalignment around base or total compensation. Recruitment and Compensation teams can work together to align on ranges that reflect what a candidate is actually likely to receive based on job level and description. Comp professionals can give recruiters the tools to discuss compensation early and be clear about how a candidate’s salary expectations align with the role, while recruiters can offer honest feedback from conversations with candidates. While compensation work and analysis is often separate from the recruiters who are talking to candidates, the two workstreams have to run parallel to keep things moving quickly. 

Step 2: Use Market Data to Support Hiring Goals

When recruiters and hiring managers don’t know how a role is priced — or if the data is outdated or inconsistent — it slows everything down. Candidates get mixed signals. Offers stall. Negotiations drag on.

A strong, data-based compensation strategy helps your hiring team make competitive offers faster,
avoid over- or under-shooting salary expectations, and feel confident explaining ranges to candidates.

As your company scales, relying on market data is the best way to make sure your salary ranges keep up with internal growth and external changes. Remaining competitive is a major part of meeting your hiring goals, and evaluating how each role in your organization lines up to candidate and employee expectations helps you devise your unique compensation strategy.

Step 3: Build for Retention, Not Just Offers

Pay isn’t the only reason people stay — but it’s often a reason they leave. If your company makes great offers but doesn’t have clear guidelines for internal equity, raises, or promotions, employees will notice. Eventually, they’ll start looking elsewhere.
To support long-term retention:

Create a job architecture that scales.

Identify clear levels, job families, and titles, then apply consistent salary ranges for every role. As your team grows (with promotions or new verticals), you’ll have to revisit your job architecture, but getting started helps provide clarity for your team.

Establish guidelines for promotions and raises.

Reward hard working employees as they grow and make positive change with what matters — career progression. Career progression isn’t just throwing a “Senior” in front of an existing title, it’s about carving clear pathways and planning for compensation steps along the way.

Monitor internal pay equity and adjust as needed.

Your employer brand isn’t built on LinkedIn followers or Glassdoor reviews. It’s created by showing your employees that they matter and upholding your reputation as an employer. Internal pay equity drives the point home to your employees that you value their contributions, and adjusting as your team grows shows you want to retain them. With pay transparency guidelines and laws regularly expanding, our partners Trusaic and Syndio offer resources for teams that are monitoring their internal pay equity and navigating the complexities of pay gap reporting.

Make sure your compensation work is visible and understood.

While compensation work is complex, offering insights into elements like your compensation philosophy, job architecture, and career pathing helps share the big picture (and the reasoning behind it) with your team. Communicating the “why” behind your compensation decisions can clear up employee questions or wonderings about their current compensation or growth opportunities, which are major contributing factors for retention.  

Planning for retention doesn’t have to be complex. Even simple guardrails (like a range for each job level and a rule of thumb for promotions) can help your team stay aligned and avoid surprises.

Step 4: Equip Managers to Lead Pay Conversations

One of the most overlooked stakeholders of the compensation process? Your people managers.

They’re often the ones fielding questions about raises, explaining offers to candidates, or having tough conversations about budget limits. And yet, many feel underprepared or unsupported.



Giving managers access to ranges, talking points, and your compensation philosophy empowers them to have consistent, confident conversations about pay
and reinforce your company’s values around fairness and transparency.

When managers are supported, your whole system works better. Compensation management training sessions can equip your leaders with the knowledge and skills necessary to navigate complex compensation conversations. Managers very rarely choose to step into supervisory roles because they will get to manage difficult conversations, it’s just a part of the job. Think of your managers as your “boots on the ground” when it comes to employee engagement and candidate conversations, then prepare them accordingly. 

Step 5: Review and Adjust Regularly

Compensation alignment isn’t a one-time project. As your company grows and goals evolve, your compensation structure needs to evolve with it.

Schedule regular reviews to:


  • Evaluate how your market data
sets meet your organization’s current needs and refresh your data with annual survey participation or purchased market  data sets like BetterComp Prime.
  • Analyze salary ranges by iterating different models and analyzing for compression or equity issues.

  • Align with changing business goals (e.g., shifting from aggressive growth to profitability).

  • Gather feedback from recruiters and managers on what's working (or not).



Think of this as a living system—not a static spreadsheet.

Supporting Compensation with Technology

BetterComp gives HR teams and business leaders the tools to align pay with the real-world demands of recruiting and retaining top talent.

In BetterComp, you can quickly:


  • Access fresh, role-specific market data

  • Evaluate salary ranges at scale

  • Monitor compensation trends and adjust with confidence



Using a single compensation platform like BetterComp empowers your team to spend less time on gathering information to analyze and focus their efforts on:

  • Increasing transparency through reports that provide actionable insights
  • Sharing ranges and rationale with hiring managers
  • Clarifying employee growth pathways 

When your compensation strategy is built to support your talent strategy, everyone moves faster — and with more clarity.