Attract and retain top talent by advancing pay-for-skills

Agile workforce management requires identifying, keeping and moving skilled talent. Advancing pay-for-skills practices can secure top talent at competitive rates and help future-proof businesses.


  • It’s difficult to attract and retain the skills required to transform for the future.
  • Our traditional compensation methods are not aligned with new workforce requirements for agility and flexibility.
  • The lack of transparency in our compensation programmes is an obstacle to building employee trust with the organisation.
  • We don’t know which skills are most valuable, and we’re concerned we’re over- or underpaying for the wrong skills.
Rethinking compensation plans is a top-five agenda item for HR, with 36% of respondents citing it as a top priority.

Mercer’s Skills-Edge Suite can help you advance pay for skills

Pay-for-skills practices can lead to increased attraction and retention of critical skills. In addition, they can strengthen and reinforce other people initiatives, such as workforce planning, performance management and career development. Mercer products that can support pay-for-skills initiatives include:

Skills library

Lay the groundwork for skills-based decision-making.

Learn more about Skills library

Skills pricer

Determine which skills are most valuable to your organisation.

Download Skills pricer overview

Skills pay planner

Reinvent your rewards with pay for skills.

Download Skills pay planner overview

Watch our interviews on approaches to skills-based pay

In this interview series, several Mercer consultants talk with IBM executives about the journey IBM has taken to plan and adopt a skills-based pay approach.

What set IBM on the path to include skills in compensation decisions?

Who were the critical stakeholders and how did you build your business case?

How did you manage the transition and change across the organisation?

What were the business impacts and how did it affect recruiting and retention practices?

How did you link your performance review programme to the pay-for-skills programme?

Did the pay-for-skills programme bring a pay change across all job families, including for soft skills?

How did employees react to the transition?

How do you see pay-for-skills developing in the future?

Only 12% of respondents indicate that they formally monitor market demand for skills, but this figure is rapidly increasing with access to new data sources and technology.
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