Our recommended approach
1. Discovery phase
Our research encompasses internal and external factors. Internal elements cover existing business and HR strategies, culture and values, key business drivers, views of stakeholders and current policies and processes. The external research considers competitor, market information and trends and takes into account the type of talent the organisation is trying to attract and retain. We examine the economic and political context alongside legislation and regulation to inform our recommended approach.
The analysis of the research will be examined through the lens of the organisation’s short and long-term priorities, the organisation’s values, the type of talent to successfully deliver the strategy and who the organisation is competing with for talent. Wider market and economic conditions and what employees, and future employees, want will be used to guide the analysis.
2. Design phase
We can help you identify the best reward choices that suit your business’ requirements, based on our findings from the discovery phase. Often, we find that customers are keen to get on and implement their ideas, but the discovery and design phases are critical to ensure that your approach is evidence-based and fit for purpose. This will determine whether your total reward strategy is built for the long-term.
When it comes to defining the financial rewards, there are a number of pay structure choices available and different methodologies that underpin these systems. Some structures will lend themselves better to performance related pay or managing job sizes, while others will be a straightforward series of pay points depending on management-capability. We can help if you are considering carrying out a job evaluation to organise roles and set up a framework on which pay can be objectively set.
Businesses will also choose between setting pay ranges or spot rates for each grade and each grading structure. External pay pressure can influence the structure chosen. All of this evidence collated in the discovery phase will be factored into the design, demonstrating the importance of following the tried and tested process to strengthen your long-term approach to reward.
Companies need to understand the market context around pay to help them make these decisions – understanding where the employees are typically recruited from and where they go when they leave the organisation. This again goes back to the discovery phase to identify competitors, potentially in multiple markets. This helps you access the right data to benchmark yourself against.
Organisations need to make the strategic decision as to whether a higher market position increases the pool of people attracted by the offer and decreases the pool of organisations that can match the offer. This has to be carefully balanced against the question of affordability. From a recruitment and retention perspective, it certainly helps these challenges, but it does not guarantee that you access the right talent. Arguably, the recruitment process itself will be more indicative of how well you attract top performers and the right skills, so many opt to benchmark against the median pay levels in the market to remain competitive.