Speak to an expert +44(0)1733 391377

Toggle Sidebar

As an employer, your top priority should be ensuring your employees are happy, content, and unlikely to move to a competitor. Unless you’re in the retail or hospitality sector where high staff turnover is expected, if you find a lot of your employees are moving elsewhere, this usually means there’s a problem with an aspect of your company culture. 

There will always be those who want to change careers, accept a new challenge, or who simply find the role doesn’t suit them, but outside of these, you shouldn’t be losing a high number of your team on a regular basis. If you are, it could be attributed to an unhappy atmosphere, poor training, heavy workloads, or an uncompetitive salary.

The power to enact change lies with you as a manager, and whilst it might seem like an uphill task to tackle the root cause of a high staff turnover, one of the easiest and most effective things you can do is to look at salary benchmarking services. This will allow you to address any salary issues that may be causing your top talent to seek employment elsewhere.

benchmarking on clipboard

What is salary benchmarking?

If you are unsure what salary benchmarking is, don’t worry. Essentially, salary benchmarking is akin to a salary review. Employers can use a salary benchmarking tool, like the one offered by Paydata, to determine what the average salary of their employees is on a job specific level.

To do this, we collect data through salary surveys. This involves a number of employers across certain industries detailing what their employees earn. Using this data, we can assess what the average salary for each job role within an industry is. Employers can then look at this data and compare their own employee’s salaries to it.

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.

Every time someone leaves, a new person must be trained. This takes time and money, and if you are having to do it on a regular basis, it will eventually start to affect work output.

Through a high staff turnover, your company can earn a poor reputation which can turn potentially skilled candidates away. This means you could see yourself losing out on top talent.

“ It’s important to foster a positive working environment, and one of the best ways you can do this is by ensuring everyone is paid fairly.”

How can we help?

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.

Speak to an expert

You should find that current employees are more inclined to stay, and prospective candidates are more inclined to apply. This will, in turn, make you more competitive in your sector, and a lot of it simply comes down to salary benchmarking.

Find out more

Paydata is one of the leading salary benchmarking companies in the UK. Our expert team is on hand to help you with the salary benchmarking process. Please contact us to find out more about how we can assist you.

 

Stay up to date

Sign up for briefings on pay benchmarking, salary surveys, reward strategy and statistical updates.

sign up for updates

© Paydata Ltd 2022 All rights reserved.
Registered in England no: 3632206
VAT no: 728 0808 28

Paydata Ltd, 24 Commerce Road, Lynch Wood, Peterborough, Cambridgeshire, PE2 6LR