COMPENSATION & BENEFITS

 
 
 
 
 
 
 
Though usually not ranked the most important, compensation is an important factor in job quality. Organizations have some obvious challenges when it comes to providing competitive salary and benefits to attract and keep the best staff. Organizations can, and should, market their strengths because people are also looking for jobs that make a difference, offer interesting and varied challenges and have positive working relationships.

However, we'll never be able to escape the fact that compensation is important - and a deciding factor for people when they consider a job. The HR Council is currently developing new content to add to this section of the HR Toolkit to help non-profit organizations manage their employee pay and benefits.

In this Section:

  • Employee and retirement benefits
  • Salary surveys
 

Employee and retirement benefits

Only about half of the people who work in non-profit organizations have access to employee benefit plans such as life or disability insurance, dental plans or supplementary medical plans. Less than half (about 45%) have access to employer pension plans . If we are to recruit and retain the most committed and knowledgeable people in the sector, we will have to find ways and means to improve access to employee benefit plans and retirement plans, especially as the competition for talent becomes more intense.
 
 

Three reports below have been prepared to build a body of knowledge around organizations and employee benefits and retirement plans.

 

Report #1: Employee Benefits - Barrier Identification (PDF 96KB)
The first report identifies key issues and barriers affecting the acquisition and management of employee benefits in the voluntary sector.

Report #2: Employee Benefits - Recommendations for Action (PDF 90KB)
The second report identifies 23 recommendations for action to deal with organizational, affordability and knowledge/ information barriers related to employee benefits. This useful report contributes to possible solutions and steps to address the issues identified in the first report.

Report #3: Retirement Plans - A Primer for Discussion (PDF 56KB)
The third report outlines some key issues surrounding retirement and pension benefits in voluntary sector organizations. This report, available below, is meant to start the discussion around the challenges in offering these benefits to voluntary sector employees.

 


Salary surveys

Surveys collecting information about employee compensation, including salary and benefits, are commonly called "salary surveys". Salary surveys, in conjunction with other tools, can provide useful information to attract, support and retain employees within the context of an overall human resources and organizational plan. When designed and used properly, salary surveys can provide useful benchmarking information for comparing salaries and benefits.

Many organizations want to use salary surveys to set the compensation levels for their organizations. Unfortunately, it's not always as easy as reading a survey and using the information. Below you'll find important information about how to assess salary surveys and get the most out of the information they present.

 

How to assess a salary survey

Salary surveys need to be readily comparable and scientifically credible to be useful for benchmarking. The following provides a summary of how to assess a salary survey.

 

Compare apples to apples

It's important, when reviewing salary surveys, to make sure that you are comparing information that is similar. Looking at salary and benefits levels in organizations vastly different from your own will not provide the information you need. Here's what to look for:

  • Review job descriptions or position profiles in the survey report
    It is important to look at job duties and responsibilities not just job title when deciding if salary survey information is comparable. To be comparable the jobs must have a similar level of responsibility and range of duties.
  • Note province and region
    Appropriate salary comparisons will come from agencies with a similar geographic focus: local, regional, provincial or national. At the local level, the best salary comparisons will come from other organizations in the same city or town. Good salary comparison may come from a different city or town with similar labour market characteristics and a similar cost of living.
  • Note operating budgets of respondent organizations
    As a general rule larger the operating budgets mean higher salaries. Comparable salaries come from organizations of a comparable size. Size is usually estimated by using the operating budget or looking at the number of paid full-time staff.
  • Note the type and description of respondent organizations
    Are the functions, services offered, clientele, and sources of funding of the organizations in the salary survey comparable to your organization? For example, an organization providing child care services through provincial funding may have very different salaries than an organization providing a parent/child resources through its own fundraising.
  • Note the education level and (full/part-time/union/contract) status of respondents
    The level of education required for a job and the type of employment arrangement can have an impact on salaries.
  • Note the year of data collection and the date of the report
    Labour market forces can result in significant changes in salaries in a short period of time. More recent data will be more useful in establishing current salaries.
  • Note if the survey is a one time event or if it's repeated
    Surveys that have been repeated provide an added advantage of showing trends in salaries over the years of the survey.

 

Is it scientific?

  • Methodology and technical details are reported and discussed
  • Study is objective, valid (does what it is supposed to do) and reliable (accuracy of measurements)
  • Note sampling frame, sample size, and response rate
  • What is the margin of error? Is it reported?

For information to be valid it has to come from a large enough sample size. For example, if you collected just three salaries for the same position and one salary is high, one is low, and one is in the middle, you wouldn't be able to conclude much because your sample is too small to provide valid and useful information.

You also want to be sure that the information is reliable. Reliability means that the survey gives consistent results. You should therefore carefully consider how the information is gathered and decide if it makes sense to you. For example, if the survey instrument is included in the report, assess if it would be easy for you to give accurate answers to the questions.

 

Easy to use and understand

  • Technical terms are explained; report is comprehensible to non-specialists

A good salary survey will define terms and provide the user with enough information to help him or her easily understand the data.

 

Look at all of the numbers

  • Numbers include mean, range, median
  • Breakdowns are provided for positions (with profiles provided), sub-sectors and regions

The actual salary paid to an individual will be influenced in part by the person's years of experience and qualifications. Therefore, the salary range for a position provides more useful information than the actual salary an individual is being paid. Other statistical information such as median - the value in the middle when all the values are arranged from lowest to highest - will also help make sense of the data.

 

Consider the total compensation - review the benefits

  • Consider total compensation
  • Make sure that all of the benefits are listed

Having information on the total compensation package - retirement plan (pension or RRSP ), bonuses , benefits and salary - allows for better comparisons. Without this information you might make wrong assumptions about salary level and not have the full picture. For example, in a situation where no benefits are provided, many people (particularly those in higher positions) will negotiate for higher salaries. Without seeing the whole compensation package, you might not understand that the high salary compensates for no benefits.

 

Other considerations when setting salaries

  • Use more than one source of salary information; this will help you avoid any bias found in a single source.
  • Determine who your competitors are: what other organizations, agencies, institutions, businesses, quasi-governmental organizations or governments requires staff with the same knowledge and skill. Based on exit interviews, to whom are you losing employees who leave your organization?
  • Position your salaries relative to your competitors. Strategically determine if your organization wants to pay at the going market rate, above market, or below market.

In conclusion, salary surveys do not replace judgment. From deciding if the salary survey provides useful comparisons for your organization to finally deciding what to pay your staff, good judgment will be essential for any compensation decisions.

 

 

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