What are the benefits of salary benchmarking?
There are several benefits of salary benchmarking that feed into its importance, with the first being that it allows you to ensure you are paying your staff what they’re worth. It isn’t uncommon for long-term employees to get left behind in regard to competitive pay, meaning newer employees can and often do get paid more.
This occurs mostly because the employment landscape has shifted and continues to do so. It is no longer dominated by employers – candidates are now more highly skilled and better educated, making competition even fiercer. This means job seekers hold all the power and employers tend to do all they can to entice them, often with a higher salary that doesn’t necessarily match that offered to existing employees.
By using a salary benchmarking service, you’ll be able to better determine whether your existing employees are getting paid a fair amount in-line with current trends, as well as whether your new employees are on an inflated salary that exceeds what others are offering their recruits.
There’s a lot that goes into keeping employees happy, and whilst money isn’t the main reason workers tend to leave their jobs, around 12% of people quit as a direct result of poor pay. The cost of living is rising and so is inflation, but wages have remained stagnant. This means we’re likely to see more people seeking higher pay to compensate for the rising cost of bills. If you are already paying your staff well, they won’t need to look elsewhere for a more lucrative job opportunity.
Outside of paying employees enough to live, there are other advantages that come with proper pay. Firstly, your employees will feel valued and appreciated because through salary benchmarking, you’re demonstrating that you are keen to ensure they are being paid fairly.
When employees feel valued, they are more likely to have a better morale, and a higher morale often translates to employees that are less likely to seek employment elsewhere. With this in mind, the most crucial answer to the question of why is salary benchmarking important is because it lowers your staff turnover.
The importance of a low staff turnover
There are several reasons why a high staff turnover is bad for business, with the most obvious being that you will inevitably end up with a skills gap due to an interrupted work cycle.