You may have read our last insight on the changes to the National Living Wage (NLW) and the impact that this will have on the gap between employees on the NLW and all other employees within each business. Apart from the cost implications this may have on a business, there is also a risk of key employees having their heads turned by higher salaries being offered from other employers.
We all know the current job market is candidate-driven and with the pick of the bunch, candidates will be choosing roles based on their main motivators. And let’s face it, even before the current cost of living crisis, we know that more often than not there’s one main factor: money.
We hear so often how important people are to any business, so it is important to ensure you’re doing everything in your power to retain them. By having all the information at your fingertips, you can stay ahead of the dreaded ‘pay increase’ conversation and take a more proactive approach. If you know what the market is offering, you can pre-empt what your employees may be expecting.
This is where benchmarking comes in.
Benchmarking allows businesses to compare their salaries against the same roles across competing companies. From this information, you can then calculate the average salary for specific roles within your business. This is also sometimes referred to as a salary review.
Salary Benchmarking is an important process within businesses to ensure your people are being paid appropriately, and it creates a competitive job market.
Here are a few more reasons to get started…
Saves Time & Money
As benchmarking revolves around existing data it means you don’t need to be making up your figures, you’re simply pulling in numbers from elsewhere and making sure your salaries match your competitors.
Use The Good & Change The Bad
Benchmarking enables you to see what is and isn’t working in your pay structures. You can take what is working across the industry and apply it to your business or, alternatively, you can adapt areas that don’t add as much value. Ultimately, benchmarking enables improvements in your business structure.
Realistic Comparisons
Salary Benchmarking enables realistic conversations and comparisons, not only can you form your pay structure using existing salary brackets, but you can also compare the salaries in your company with your competitors. You could find that the salaries you are offering are above or below that of your competitors and you can then adjust your salaries accordingly…or shout about the fact that you come out on top!
Improves Employee Retention
If your salaries are too low, you run the risk of your top talent looking elsewhere, but by being proactive and regularly reviewing your salaries, you can keep your staff satisfied. Even if you can’t match a competitor’s salary, there are several alternatives you can offer to boost your packages and retain your best employees.
Create a Sense of Value
A competitive salary and other perks are ways to make your people feel as though their work is valued. Whilst it’s not the be all, end all, if your people know their pay and perks can’t be matched elsewhere, they are more likely to stay with you!
Enhance Loyalty
For particularly sought-after roles, your competitors may try to poach your people by offering a multitude of perks. If these perks such as a competitive salary, a pension plan, paid time off, and other bonuses are already a component of your company, they will not be tempted to go elsewhere.
Helps with Recruitment
Someone looking for a job is typically aware of the standard salary for the role that they are applying for and will have a target in mind. Benchmarking means you should already be at this target, giving your business a head start.
Equal Opportunities
Benchmarking removes bias when assigning salaries and means an individual is not an affecting factor as their salary is determined by stats. This makes for a fairer place to be, which will be another feature of your business that attracts prospective employees.
We know what you’re thinking – that’s all great, but it sounds like a lot of work. But fear not, that’s where we come in.
By partnering with a trusted HR company like ours, you can gain access to valuable insights and data that will help you make informed decisions about your employee salaries, without all the hard work. With our help, you can ensure that your team is well taken care of and that you're not losing your top talent to the competition.
Don't wait until it’s too late, give us a shout and let's make sure your business stays ahead of the curve!
