Smart Benefits: Is it Time for a Compensation Check-Up?

Smart Benefits: Is it Time for a Compensation Check-Up?

With continued low unemployment, it may be a good time to make sure your pay is on par with other companies in the industry so you can attract and keep the best talent.

And one of the most relied-upon tools is compensation benchmarking, which allows you to check the rate for each position against market data to determine just how competitive your salaries are.

When relying on compensation benchmarking to set pay levels, here are some things to keep in mind:

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• Look for reliable sources. Some dependable sources include the US Bureau of Labor Statistics and professional association surveys – some of which you can get for free if you participate in their salary surveys. Other free sources are available online but be wary of the accuracy of those that contain self-reported data. And watch the date; if the data is old, you’ll want to add in an annual adjustment factor.
• Use relevant criteria. To get the most value from your efforts, select those data points that will give you the most accurate comparison to your peers like geographic location, industry, and company size.
• Consider third-party support. If undertaking a benchmarking study will overwhelm your HR staff, you may want to look to a data vendor or consulting firm for help. In addition to conducting traditional surveys, they can also work with your organization to design a custom survey just for your business; however, it’s likely to be more expensive.
• Find a match. To make an informed decision, you’ll need to match the jobs, knowledge, and skills in your organization to job descriptions in survey data as closely as possible. And don’t rely on titles alone but instead look at the role’s requirements. If there aren’t exact matches, you may need to combine the survey data with other factors like who the position reports to in your organization or the education level.
• Document your process. Whether you’re using benchmarking in recruiting or to review employees for possible raises, it’s important to outline how you determined the compensation for each job so you can share it if your policy is to be transparent so employees understand what they’re paid and why.

 

Once you have the results, apply your compensation strategy – like how competitive you want to be or the overall goals of your program and how salary fits in – to determine what effect, if any, the data should have on your pay ranges.

 

Rob Calise is the Managing Director, Employee Benefits of The Hilb Group of New England, where he helps clients control the costs of employee benefits by focusing on consumer-driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance