Our Perspective on Salary Benchmarking

Did you know that four out of five job seekers won’t even consider applying for a role if the salary range isn’t advertised? That’s a stark reminder of how crucial transparency has become in today’s job market.

Many companies hesitate to disclose their compensation packages externally because they’re not transparent internally. This lack of openness creates a host of problems, impacting not just recruitment but employee engagement as well.

Why Pay Transparency Matters

We’re no longer just targeting Generation X, who followed the tradition of keeping pay details under wraps. Younger generations are more open about their earnings and expect to be compensated fairly and equitably compared to their peers. Lack of transparency and perceived inequity can lead to speculation, frustration, and disengagement.

Reward as a Motivator

When employees believe their pay is unfair, it quickly becomes a demotivator. It’s essential to empower your managers to have informed discussions about compensation, helping employees understand how they can progress through pay scales, whether through performance improvement or career development.

A Clear Reward Strategy: No Surprises

Surprises might be delightful for birthday celebrations, but they have no place in your reward strategy. By clearly communicating how pay is calculated and what the criteria are, you can avoid confusion and unrealistic expectations.

The Value of an Unbiased Perspective

We all know that commercial realities can create perceptions of bias towards cost-saving measures, which may not sit well with employees. Bringing in an unbiased third party—ideally a reward specialist—can lend credibility to your pay strategy. An external expert can provide scientifically derived benchmarks and explain pay bandings in a transparent and fair manner.

Addressing Pay Disparities

We’ve all encountered situations where someone’s pay seems out of line with their role—whether too high or too low. Establishing proper salary scales allows you to address these issues head-on, offering a clear path for correcting disparities. This could involve ‘red circling’ a role or gradually increasing pay above the cost of living, showing employees that their remuneration is a priority.

The Risks of Not Salary Benchmarking

Failing to benchmark salaries doesn’t just limit your talent pool—it can also expose you to unfair pay claims, with no data to defend your position. Salary benchmarking is a precise science, not an art. If terms like ‘ranking point’ or ‘compa ratio’ are unfamiliar, it’s time to seek expert advice—and this doesn’t mean asking your finance team.

Partnering with Experts

Your CFO will undoubtedly be focused on the budget, but for unbiased and credible advice on reward strategy, you need a reward specialist. They bring access to high-quality benchmarking data and can help you build a reward strategy that supports your business goals.

Progressive employers are both transparent and strategic with their pay structures, which is precisely what today’s workforce expects. To effectively budget, set the pay agenda, and address any issues, a solid structure and expert support are essential.

We’re here to help. Talk to us about how our reward specialists can assist with your salary benchmarking, laying strong foundations for enhancing your performance and engagement strategies.

Need a Confidential Chat?

If you’d like to discuss any aspect of your HR strategy or need further guidance on supporting employee wellbeing, feel free to get in touch. We’re here to help.

You can call us directly on 01243 – 967961 or email [email protected]