Salary benchmarking data can help retain your best executives and ensure you recruit top talent. The data can give you a truer sense of how your total compensation package stacks up to the competition.
Being able to offer high-performing employees appropriate incentives or rewards can help make them more likely to stay onboard. You will also recruit new qualified candidates at the right salary.
Benefits of paying for current benchmarking data
By leveraging a salary benchmarking platform, you will be able to identify appropriate market rates easily for your internal positions. A solution does this automatically by using analytics to match similar external offerings with your internal roles. Depending on the solution you choose, you can generate compensation reports, calculate sales incentives, build salary ranges, and track compensation trends by title, industry, and/or location.
Compensation management solutions can create customized incentive-based compensation plans, commission or complex plans that meet the needs of your business.
Benchmarking data can improve recruitment and retention
Salary benchmarking data can help your business promote a pay-for-performance foundation, which can help improve your recruitment and retention strategies. For example, you can create a recruitment strategy to attract candidates looking for pay-for-performance opportunities or above-average compensation.
Once an internal performance process is in place, consider mentioning that your business is a performance-focused organization in all your recruitment marketing materials or job postings. This will help relay a message to your candidates that your business pays the appropriate compensation or offers recognition for outstanding efforts.
For retention purposes, salary benchmarking analysis can provide insights for common questions like: how to manage merit increases, how to effectively manage compensation differences across your business, and how to retain top talent. For example, certain business practices, such as paying external hires more than internal talent, may cause higher turnover rates. With the proper data in hand, you can make informed decisions to either change the existing practice or implement risk mitigation measures to help high-performing, internal employees stay.
Risk of not investing in benchmarking data
High turnover cost, employee dissatisfaction, and lack of engagement can occur when a business is unable to implement an effective reward strategy.
To mitigate this risk, Susan Hanold, ADP Vice-President of Strategic Advisory Services specializing in Talent Strategy, offers insight on the importance of real-time benchmarking salary data to ensure competitiveness in the marketplace. Hanold recommends a "total rewards package" by determining the attraction features for your business and where you want to spend your budget.
Once the reward strategy is aligned with overall strategic goals, Hanold encourages businesses to communicate their pay philosophies to their employees. She advises businesses to conduct a pay survey to ascertain how employees feel about their compensation and to share any information on pay structure during performance reviews to communicate employee total rewards. This survey approach collects feedback to make improvements in your compensation offerings.
Overall, by using salary benchmarking analysis, you can appeal to a multi-generational workforce. As a result, you'll can offer a total compensation package that can help your internal employees strive to succeed. External candidates will appreciate the transparency and be more apt to apply for open positions because you're making a demonstrable investment in your people.