The Importance of Salary Benchmarking
A lack of accurate salary benchmarking data is causing fresh problems in the Digital, Data and Technology sectors. More than 60% of businesses have seen an increase in pay rise requests in the last year due to the cost-of-living crisis, according to reports. Here we look at how the demand for higher salaries from existing employees and applicants, coupled with a lack of accurate and up-to-date salary data, means that employers are rapidly losing the battle to secure and retain vital skills.
A recent report by PwC has revealed some stark statistics among global workers, with 26% of the 53,912 who were questioned stating that they intended to leave their jobs during the coming year. Much of this discontent was put down to the cost-of-living crisis which is affecting UK workers especially badly; 47% of them said that they had little or no savings to fall back on at the end of the month, with an additional 15% of them saying that they struggle to pay their bills.
If employers are to retain their existing workers, and attract new talent to drive innovation and growth, one simple but vital step they can take is to ensure that their salary benchmarking processes are up to date and that they reflect the new reality for digital, data and technology talent.
What is salary benchmarking?
Salary benchmarking is the process of compiling information on pay and benefits from different organisations within a specific sector in order to compare them and allow interested parties to assess what the industry standards are. It allows employers and both prospective talent and current workers to compare the average salary for roles within an industry and see what an organisation’s competitors offer.
Benchmarking is important to employers because it allows their business to identify comparative salary rates for potential employees, track their fluctuations, and compare them against what their competitors are offering to ensure that their workers are being compensated appropriately.
For current employees it allows them to compare what their existing employer is offering them to what they could potentially achieve elsewhere, and for talent it gives an indication of what kind of salary and benefit package they can expect from a future employer.
The benefits of benchmarking
Benchmarking has many benefits including:
Improving employee retention – making informed decision which ensure that workers have the right salary and benefits package increases motivation, and maintains a high level of retention, making employees less likely to look elsewhere for a better package
Enhancing recruitment – offering prospective talent a salary that outshines their current one will make them more likely to consider taking a job within an organisation
Boosting an organisation’s image – if a company is seen as offering competitive salaries, in line with industry standards, it will stand out against its competitors, and attract higher quality talent
How is it achieved?
There are three main methods of benchmarking:
HR departments spend many tens of hours researching benchmarking data, sorting by experience, location, industry etc. They may also investigate recruitment websites to glean the information they require to produce a salary benchmarking survey which may or may not be accurate, depending on the data
HR departments use basic salary benchmarking tools which again can sort by location, industry, experience level etc. This information may cover salary but may not include additional extras such as benefits
HR departments contact industry experts who can assist in providing accurate and up-to-date data insights by using their first-hand knowledge and expertise.
Global Resourcing has over 26 years’ experience in providing inclusive digital, data and technology talent to the public and non-profit sectors. In that time we’ve placed a huge range of highly-talented people in organisations throughout the country, at many different experience levels, and in a variety of roles.
It’s no wonder that we’ve developed the tactical experience which allows us to offer industry insights that utilise the data which we’ve gathered over the years. Our in-depth market consultancy solutions are a direct result of the complex analysis we perform when we receive a new client role or take on fresh talent looking for their next challenge.
In the same way that we perform precise market searches for specific talent for organisations, we can offer our clients and candidates up-to-the minute salary benchmarking, providing them with essential data on which they can base their decisions.
In today’s uncertain economic climate, and with many people concerned about their standard of living, it makes sense for clients and candidates alike to ensure that they have up-to-the minute data on salaries and benefits so they can make an informed choice about the rewards packages that are being offered and maintain their competitive edge.If you’d like more information about salary benchmarking and how it can help you, as an organisation or as a candidate, you can call us on 020 8253 1800, email us at firstname.lastname@example.org or fill in the contact form here.