The most popular answer is to improve the organisation's ability to recruit, motivate and retain the people it needs. There is a belief that unless your terms and conditions are competitive:
Before deciding to participate in or buy a specific salary survey, there are a series of decisions you need to make that have a material impact on the outcome. The main questions to answer are:
Salary benchmarking provides an understanding about whether your existing approach is competitive. You can use the information in the survey to:
Start by asking the simple question, “Where do the people we recruit come from and where do they go when they leave us”? Add to this list those companies you see as direct competitors in your business sector, and finally consider the companies that you would like to recruit talent from to enhance your organisation’s skills.
The answers will be different for different groups of employees. You may find you have to participate in a variety of surveys to give you a complete picture of your comparators across local and national markets, job functions and business sectors.
There is a lot of benchmarking data available and it breaks down into two main categories:
When choosing which surveys to buy, start off by asking the survey publisher to provide you with a list of jobs covered, some details about the job-matching approach, a participant list and a sample report. Ask yourself the following questions:
It’s very likely that only a small number of the surveys that are available will tick all the boxes. You may have to use several sources to cover all your roles, because some surveys focus on specific industries, some on specific functions, and some on specific locations.
Having participated in the right surveys, you need to review the information provided. Most surveys analyse the cash elements of the package individually e.g. base pay, bonus payments, etc., some combine all the cash elements into a total compensation figure. Many examine the key benefits e.g. holidays, private medical, pension scheme, company car etc.
To maximise the value of the survey, you need to be clear about your desired market position. Analysis of the data will then inform you as to where your reward policies and practice sits in comparison to your preferred position and the levels paid by your comparator groups. From this you can then review the approach to your cash and non-cash elements to create a well-balanced overall package.
In summary salary benchmarking is neither an art or a science, it’s both! Considering the information provided requires both interpretation and decision making skills to enable you to use the results appropriately. The data will be telling you a story; it’s then all about how you translate this into your reward approach to gain competitive advantage.
Paydata are a leading source of UK salary benchmarking data and provide the expertise, insights and tools to help HR professionals manage their pay and reward practices. Get in touch with us if you need support with your benchmarking requirements.
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