Am I paying my employees enough?
By partnersinhr, Aug 4 2016 03:56PM
Benchmarking is a way of assessing how competitive the pay & benefits that you offer your employees are, compared to other businesses of a similar nature, size and within your geographic region.
Knowing what benefits your peer businesses offer their employees, in terms of pensions, healthcare, company cars, bonuses and shares, can help you maintain competitive edge. This is especially important in a market where you want to attract top talent. But, it's not just about making sure you're offering enough; in some cases, benchmarking can be useful to determine if you're being unnecessarily over-generous, which may not be cost-effective.
New research has revealed that almost half of all UK workers (48 percent) think their current employee benefits package is not tailored to their needs. Since market salary rates and benefits preferences change over time, businesses should carry out a benchmarking exercise annually. It can also be useful if you're new to a particular sector, you've recently merged, or if you're struggling to fill a top vacancy.
There are various ways you can carry out benchmarking. In some cases, data is free, but in other instances, you have to pay. The more detailed information you require, particularly if it's very specific or niche-related, the more likely you'll have to pay to obtain this data. It could cost several thousand pounds if you use a broker or benefits consultant. Websites, such as PayScale, Reed and Glassdoor, let you compare salary levels for specific roles for free. In addition looking at similar advertised roles on jobsites and in local publications, will give you an indication of what is currently being offered by your competitors.
The important thing to remember when undertaking benchmarking, especially if you're paying for data, is to know what you want to achieve from the exercise and how you intend to use the information obtained. It could be that some incentives offered by other companies may have little value to your employees.
It's also important to bear in mind that if you're a small or medium sized company, you might not have the resources or financial means to match the employee packages of your bigger rivals. With 58 percent of people saying that their employer has never asked for feedback on their benefits programme, employers could be falling out of touch with the needs of staff. In this case, you need to understand what motivates candidates and tailor benefits to suit their preferences. Candidates are increasingly attracted by aspects that improve their work-life balance, such as working from home or flexible working, but you might also want to consider promoting other benefits. You may be able to offer benefits such as greater role autonomy, a cycle to work scheme, employee wellbeing & recognition schemes, free parking and Friday freebies!
Once you've completed your benchmarking analysis and decided what makes up your employee package, don't forget to highlight them in job adverts, to encourage candidates to apply.
If you want to ensure your company remains competitive to employees, Partners in HR can help to fine tune your pay & benefits package.