Are you Paying Enough to Attract and Retain Top Talent?

For companies to be able to attract and retain the best talent, it is crucial to ensure compensation remains competitive and in line with industry standards. This is not only important when hiring new employees, but salaries should be regularly reviewed to avoid excessive employee turnover. Salary benchmarking is a popular tool used by HR professionals to offer insight into what competitors pay employees in similar positions.

How Much Should I Pay for That Role?

Salary benchmarking is not a straightforward exercise. There are many things to consider when you benchmark a role including external factors such as:

• Industry

• Geographic location

• Company size

• Cost of living

Other factors will be directly influenced by the specific role and applicant:

• Education level

• Years of experience in a similar capacity

• Experience in a certain industry

• Specific skills that you are looking for, all of which are easy to identify

• Will the role have direct reports, if so how many

What is the role responsible for: assessing work quality, doing performance reviews, hiring, promotions, terminating and also who this role reports to is something to weigh in.

You may also want to consider if the role handles certain budgets for the company, and if the role has a direct impact on your sales, how you tie in revenue to a commission-based approach.

Salary Benchmarking can get very technical quickly, and there are many third-party tools available to support you during this process. The Pearson scale is a commonly used solution that requires hiring a third-party provider to embark on a research exercise in order to study the market and give you relevant guidelines.

Benchmarking Solutions

There are also many free solutions that can be used to the same end. Here are our four favourite tried and tested methods.

1. Salary Surveys

Some sites are willing to disclose what the role goes for in a specific market if you give them some information about yourself! By doing this, sites are able to crowdsource salary information and ensure their database is always up to date. It’s a trade, you give them some information and they give you some information back. Pay Scale is one such option payscale.com.

You can also access surveys done by organisations that have this information readily available, for example Career Junction. This job search engine gets this information when employers publish job ads, and they can summarise the information given in order to create high-level reviews. Check out the latest Career Junction review here.

2. Job Search Engines as a Job Seeker

If you are curious to know what other companies in your area are paying, you can always access job search engines as if you were a job seeker and search for the role that you are benchmarking for. You will find companies that are hiring for the same role and what compensation they offer. Be careful when doing this to ensure you look at the responsibilities of the position to make sure you are comparing like for like.

Pro trip: this can also be a good exercise if you want to furnish your own job description for a role. Take a look at other job ads and see what their descriptions say, it might help you craft your own descriptions better.

3. Recruitment Agencies

Recruiters are peer focused on finding the right people for the right role. With that comes a certain expertise when profiling roles. Recruiters know how to ask the right questions: city, experience, direct reports, skills, and can give you an accurate estimate of what the position may go for.

Recruiters are often willing to disclose their own feel for the market when you engage in conversation regarding a role you want to benchmark for. Especially if you have engaged with them in the past and have a trusting relationship. You are not asking to undertake a full-on exercise to benchmark the position for you for free, you are just asking them if they know what the average pay for the position is.

For recruiters, giving you an idea of salary expectations is a step on the door to actually engaging with you in the recruitment exercise, which you may need to tap onto if you are struggling to find the right talent with an organic search.

4. Job Ads

Let’s say you have time, and you want to do a bit of research on your own. Then we suggest posting a job ad! What better way to find out what salary expectations are for a specific role than to ask candidates themselves! Bit confusing? Hear me out on this one:

When you open a job ad in any search engine, you will start receiving applications in the search engine’s portal. This can be time-consuming, as it means sifting through CVs on multiple search engines, making the exercise rather complex - who did you see where? We suggest creating your own application form and adding the link to the job ad you are posting. And here is the golden nugget: in your application form add the question “What is your salary expectation for the role?”

Now you will have several applications coming through to your own database and it will be very easy to see what people are expecting for the role. This is a natural comparative tool, and the absolute best way to benchmark for a position as you are asking the people that are wanting this role, to tell you how much they want to earn.

What’s great about this approach is that you won’t underpay a candidate. Once you know how much they want to earn (which they will disclose even before the first interview), you will be able to confidently send a job offer to the selected candidate and can expect a higher acceptance rate.

Choosing the Right Approach for You

When deciding what the right approach for you is, you will need to balance the cost and time involved with each approach. Hiring an expert to benchmark for you will have a cost associated with it, but will be fast and will require little time from you.

If you don’t want to pay an expert to benchmark for you, the trade-in is your own time! If you choose to embark on this four-point exercise, we are confident you will get a really good understanding of the role’s compensation in your market.

If you choose to only explore one of these approaches, you may end up with misleading data. You will only get a complete picture when you cover all points and are able to make sense of the insights gained.

VHRS can help you with salary benchmarking and any other HR needs. Contact us for more information on how we can support you at: rose@virtuehrsoluctions.com