Wage benchmarking is the process of gathering information on job salaries that organisations in your industry are paying employees engaged in similar roles.
Once you collect the relevant information, it should be possible to establish a market rate for pay and benefits in jobs required in your industry.
If your salary levels fail to match the market rate, you risk losing staff and failing to attract suitable job applicants.
HR salary benchmarking process
Does your organisation regularly survey salary information that’s freely available to employees? Recruitment agencies, job boards and online forums frequently carry out and publish the results of salary surveys (in Ireland).
This means your employees have up-to-date access to what the market is paying comparable employees in their position.
If you don’t remain in line with what your competitors are paying, you risk losing staff and finding it difficult to attract good quality candidates for open positions.
Pay benchmarking goals
If you’ve lost employees or have concerns your employees are looking at other roles primarily as a result of your pay levels, you should, at minimum, consider carrying out a salary survey based on freely available information.
Establishing the market rate for your employees’ salaries and matching your competitors will help you to resolve a high staff turnover problem.
Likewise, if you need to attract new talent, a salary package that isn’t in line with the salaries offered by your competitors will not grab the attention of the best-qualified candidates.
Finding reliable benchmarking data
You should be mindful of relying on free information that comes from salary surveys carried out by recruitment agencies or job boards.
While such salary surveys may be useful guidance documents, you need reliable data to take account of discrepancies that exist based on region, industry or job function.
At any one time, there's a wide range of open positions advertised online and there can be huge variances in the salaries available.
Job candidates and existing employees have an understandable tendency to focus on the highest salaries paid in their position. Investing in market research carried out by an independent body will enable you to objectively justify your salary levels to existing staff and job candidates.
Remuneration benchmarking essentials
Establishing appropriate salary levels for all positions in your organisation will help you attract and retain key employees.
If you are failing to retain or attract key employees, your pay rates may be the issue.
Carrying out a pay benchmarking exercise based on independent primary data will allow you to accurately assess what your salary and benefits package should aspire to.
Need our help?
If you would like further complementary advice on wage benchmarking from an expert, our advisors are ready to take your call any time day or night. Call us on 0818 923 923 or request a callback here.
