Salary Benchmarking Top Tips
With 2022 well underway, it is already apparent that businesses may face employment challenges because of wider environmental factors – from rising cost of utilities to an incredibly competitive job market driving pay demands and ongoing COVID challenges.
Many organisations are beginning to face mounting skills shortages, with challenges increasing around recruitment and retention as companies compete for talent. Combining these factors means we’re operating in a candidate led market, with significant salary growth across many areas. With this potentially causing significant cost implications for employers, businesses are re-evaluating working practices, pay policies, recruitment strategies and employee engagement.
Salary Benchmarking – Top Tips
A key tool available to businesses is salary benchmarking, enabling organisations to assess their competitiveness in the marketplace in order to retain staff and attract new talent.
Find out what salary benchmarking is here >>
In order to get the most from your salary benchmarking exercise, check out our top tips and considerations:
- Reliable Data: It’s vital to use a pay and benefits database that is trustworthy, and provides reliable and accurate data. Be mindful that many recruitment companies can provide data, but make sure the figures aren’t inflated if they’ve been compared to advertised salaries as opposed to actual.
- Accurate Job Description: Make sure you are comparing like for like when undertaking a benchmarking exercise. A job title alone is not a specific enough indication of the role, you must use an up to date and accurate job description that is a comprehensive outline of the role, covering its duties, required skills and responsibilities.
- Organisation Chart: Much like the Job Description, having access to an up-to-date Organisation Chart for your business will drive more accurate results. By understanding the role’s reporting lines, both upward and down, you gain further insight into the job’s seniority and can match to the most accurate level in your benchmarking survey.
- Data Collection Methods: In addition to data available in databases, it’s advisable to combine your research with live industry results. This primary research means you’re able to gain a full picture by identifying similar vacancies in the market right now, and can combine this insight with the wider research available in databases.
- Consider Affordability: Salary benchmarking is an excellent tool for both retention and recruitment, but make sure you’re considering the full financial picture. Employee costs are broader than just their salary, so include all costs such as pension contributions, employee national insurance and other employee benefits in your calculations.
- Accurate Role Matching: Salaries can vary significantly across roles, so make sure your survey matches your business profile. From location to turnover and size of business, it’s advisable to consider your organisation’s characteristics when benchmarking a role to ensure you’re comparing like for like.
hr inspire uses salary benchmarking to support reward structure development or as a stand-alone service for individual positions that are either new to the business or simply need updating, giving you the opportunity to undertake either regular small-scale activity or larger departmental or company-wide exercises.
Our team provide fast and accurate salary benchmark reports, from which management can base sound and independent reward management decisions.
For more information on salary benchmarking, please contact our expert team.
