If you work in HR, you would no doubt have heard about salary benchmarking. But what exactly is it? Is there a salary benchmarking process? How does the process work? Are there any reliable salary benchmarking companies?
What is Salary Benchmarking?
The salary benchmarking process gathers information on pay and benefits for various organisations. It then goes on to compare the pay package on offer against those offered for the same role by competitors.
This information is then used to calculate the average salary for specific roles within an organisation. Salary benchmarking is an important part of managing a business with employees. The process used by a business to identify, track and compare similar salary rates to determine the pay package for their employees.
In terms of HR, salary benchmarking is essential for comparing the pay and benefits on offer against those offered by competitors. The process prevents the loss of employees to competitors with better packages. It also allows businesses to see how competitive they are within the marketplace.
Why do businesses need salary benchmarking?
Most employers don’t want to risk losing their top executives to better offers and pay packages from competitors. Salary benchmarking offers employers a justification to show the value of their employees. It will also keep stakeholders up-to-date with the latest salary trends in their industry.
How to do salary benchmarking
Salary benchmarking involves research from outsourced benchmarking tools and data sources. Results are listed according to location, experience levels and more.
You'll find information on salary benchmarking and simple tools on recruitment sites. Some recruitment companies can have access to salary information from hundreds of employers.
Salary Benchmarking Tools
There are lots of salary benchmarking tools available online for businesses and employees. For generic information on pay, according to location and industry, check recruitment sites like Hays, Hudson, and Total Jobs.
For a more detailed report consider hiring expert salary benchmarking professionals. Croner offers two essential software tools designed to simplify the salary benchmarking process.
They base their reports on data from over 3,000 employers and 50,000 jobs all around the UK. You would get a detailed and customised report specific to your company and compared to your competitors.
Benefits of Salary Benchmarking
Salary benchmarking allows recruiters and employers to better understand the job market. It helps to track changing trends in salaries, benefits and compensation within industries. Some other benefits of salary benchmarking include:
- Improved retention rate: A major issue facing organisations today is employee retention. With higher rates of employee turnover harming productivity within businesses, investing in the right salary and benefits package for employees has never been more important. Offering competitive benefit packages can increase employee motivation and retention within the company making it harder for staff poaching. Compensation includes salaries, bonuses, paid time off, pension plans and more.
- Unique Selling Point for potential employees: Up-to-date salary benchmarking reports help your organisation stand out from the competition. The process allows you to offer fair and competitive salaries to your employees which can act as the USP for your company.
- Identifies room for improvement: Salary benchmarking allows comparison between your pay and benefit package alongside your competitors. It offers you the chance to adapt your offer, according to market demand and current trends. These reports identify areas where competition might be outperforming your organisation and vice visa.
Croner Reward has two essential software solutions that are compatible with one another. We designed the tools to simplify the job evaluation and salary benchmarking processes. Speak to our experienced professionals about insights and up-to-date salary benchmarking reporting.
Find more information regarding our salary surveys and benchmarking tools. You can also check out Croner Reward online tools for salary search explaining the essential information that employers need for a detailed report.
For advice on how to close the pay gap or for any other pay & benefits issue, speak with one of our pay and benefits experts on 01455 858 132.
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