Our thoughts on Salary Benchmarking for recruitment and retaining top talent

4 out of 5 job seekers will not apply for a position if the salary range isn’t published.

That’s a sobering statistic…

Most companies cannot be transparent with their compensation packages externally because they aren’t transparent internally.

And this is causing a whole bunch of other issues too…

Unless you are comfortable to run secretive recruitment processes at the cost of weighty recruitment fees, you’ll want to make use of direct attraction methods.

Candidates expect pay transparency

We’re not simply trying to appeal to Gen X anymore, who followed their parents’ approach of respecting the confidentiality of pay data.

Our younger workers openly talk about their pay and have high expectations of being paid comparably and fairly to their colleagues.

Secrecy and inequity lead to speculation, frustration and disengagement.

Reward can drive the performance

When pay isn’t perceived as fair, it quickly becomes a demotivator.

Support your managers to have sensible pay conversations based on how their reports can gain traction through a pay scale by performing better, or as a tool for development by supporting team members to plot their career journey through your pay scales.

Reward strategy: surprises are for birthday parties and not rewards

Control the pay agenda by setting your pay strategy in stone.

If you are clear about how your company calculates pay by stating your methods, you’ll avoid an expectation for anniversary pay reviews or speculation.

Why working with an unbiased third-party is sometimes essential…

We are all operating within the restraints of commerciality, which means that we’re instantly associated with being biased towards saving money (to the perceived detriment of the employee) but, in reality, we’re simply trying to serve our people fairly.

To gain credibility, it’s helpful to disassociate yourself from the findings and assure your people that the numbers have been derived by an unbiased party, better still a reward expert who can explain how the bandings have been arrived at scientifically.

Addressing the elephant in the room…

We’ve all been in a scenario where we know that someone is paid outside of what is appropriate, either under or over.

Having proper salary scales in place will ensure that you can candidly discuss with those affected and implement corrective action so that your people understand your plans.

Whether this means ‘red circling’ a role, or a staged process of increasing above the cost of living, you can ensure that people understand that their pay is important to you.

What are the consequences of NOT Salary Benchmarking?

In the best-case scenario you limit your access to talent (or lose talent), but in the worst-case scenario you can find yourself with an unfair pay complaint and no data to justify your position.

Salary Benchmarking isn’t an art, it’s actually a science…

But if you don’t know the difference between a ranking point and a compa ratio, it’s probably time to call upon the experts – and in this instance, that isn’t the finance team.

We know that your CFO will have their eye on the purse, so it’s advisable to call upon a reward expert to give you credible and unbiased advice.

Not only will they have access to quality benchmarking data, but they will also support you in building a reward strategy that will support your future performance strategy.

Takeaway

Progressive employers are transparent and strategic, and that is what our workers expect from us.

To best budget, set the pay agenda, defend or correct your pay position, it is highly advisable to have a proper structure in place and call upon expert reward specialists to support an unbiased and credible process.

We can help…

Talk to us about how our reward specialists can support your Salary Benchmarking, building solid foundations to drive your performance and engagement agendas.