What is a Competitive Salary?

Clare Parkinson


14 Jun 2019


There’re a number of factors that determine an employee’s appointment to your organisation, including pay and benefits.

A competitive salary is among the top considerations when an applicant is applying for a new position or rethinking their current one.

There’re numerous benefits to offering a competitive starting salary. As well as reducing the costs associated with recruiting and retaining staff, it also contributes to improving morale, loyalty and productivity among employees.

In a previous piece, we explored salary benchmarking as well as the process, importance and benefits.

This piece aims to answer the question ‘what is a competitive salary?’. It also explores the process of comparing pay packages and the benefits of offering employees competitive pay rates.


What does competitive salary mean?

It’s offering employees competitive rates of pay.

It means paying your staff members’ salaries that are either at or above the current market rate for employees in similar roles at other organisations.

For example, your organisation hires HR consultants and offers them £35,000 a year although the market average pay rate for employees in that position is £32,000 a year.

In this case, you’re offering a competitive rate of pay as it’s almost 10% above the market rate.

While some job listings may include the employee’s expected pay, a majority of them will either state ‘competitive salary’, ‘negotiable salary’ or ‘DOE salary’, meaning their pay’s dependent on their experience and skillset.


How much is competitive pay?

The amount you offer your employees depends on the current industry standard.

Remember, the way you handle your employee’s pay and benefits package can have an impact on their morale and productivity.

To ensure your pay and benefits are on the right level to attract and retain staff, you’ll need to be able to determine what’s competitive pay for your industry.

The first step to determining this is to calculate the median wage for the position in question. Once calculated, it’ll provide you a clear picture of what applicants will expect.

There’re a variety of salary reports, surveys and benchmarking tools available to make that process a little easier.

Once you’ve got the median wage, you should also conduct some research into what is on offer at other organisations. This way you’ll be able to offer a more competitive salary, meaning pay will be at least the same if not better than the competition.

Websites like Glassdoor and Payscale can serve as great resources for this. You can also use the Office of National Statistics to identify changing trends in wages so that you can stay ahead of the competition.

You’ll then need to place a value figure on the role you’re recruiting for. The value being subjective, this could be hard to calculate.

Remember that salary offers mustn’t be influenced by sex, age or any other protected characteristic as this would be discriminatory.

However, what you can consider are the:

  • Duties expected of the employee.
  • Their range of skills.
  • What their educational background is.
  • The responsibilities in their role.

It’s worth considering the value an employee will bring to the business and reflecting that in their pay package.

Expert Support

Croner is here to provide you with competitive salary benchmarking information to help you reduce staff turnover. Speak with one of our pay and benefits experts on 01455 858 132.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

Free to Download Employer Resources

  • Letter Informing Employee they are to be Dismissed for Gross Misconduct


    Letter Informing Employee they are to...

    Read more
  • Letter Informing Employee they are to be Laid Off


    Letter Informing Employee they are to...

    Read more
  • Social Media Policy Template


    Social Media Policy Template

    Read more
  • What is a Health & Safety Policy


    What is a Health & Safety Policy

    No matter the industry, size, or nature of your organisation, health & safet...

    Read more
  • Groundbreaking Case Overhauls Holiday Pay Rules


    Groundbreaking Case Overhauls Holiday...

    On the 10 June 2019, the Court of Appeal made a groundbreaking ruling on workers...

    Read more
  • Construction Regulations: Guide for Employers


    Construction Regulations: Guide for E...

    The Construction (Design and Management) Regulations 2015 affect you no matter w...

    Read more
  • Numark



    Numark serve as a virtual head office for independent pharmacies on the high str...

    Read more
  • Gilmour Quinn


    Gilmour Quinn

    Gilmour Quinn Financial Planning Ltd is, as the name suggests, a small financial...

    Read more
  • Wardman Brown


    Wardman Brown

    "I would say it has has a noticeable impact, in particular it has improved the H

    Read more

Ready to focus on what you do best?

Get your free consultation and speak to an expert today.