Determining competitive salary for employees can make the difference between securing top talent and struggling to fill open positions. Competitive pay can also contribute to employee satisfaction, reducing turnover in today’s candidate-driven market. Here are our top tips for establishing competitive pay rates to help you find the top talent your organization needs to succeed.
1. Create a thorough job description
Job duties and responsibilities are two key factors that determine pay rates, so having a thorough understanding of the daily tasks and responsibilities of the role will help you develop a compensation structure that adequately covers the full scope of the position. Detail the daily activities the candidate will be required to perform, if and who they will supervise or manage, and the responsibility they hold for the success of the organization.
2. Review online job boards
To remain competitive, it’s important to have an understanding of what your competitors are paying. Collect this data by reviewing online job boards. Search for positions with the same job title, responsibilities and requirements to gain insight on pay scales offered by other organizations.
3. Consult additional resources
Online job boards may provide insight into other organizations’ pay structure, but they don’t paint the full picture. Be sure to conduct research using additional resources such as PayScale and Glassdoor to stay up-to-date on compensation trends that are both position and industry-specific.
4. Establish a target pay range
Getting stuck on one number in the recruitment process will make salary negotiation with that dream candidate simply impossible. Rather, with an in-depth knowledge of competitor salaries, you’ll quickly discover how to establish salary ranges. Compare industry trends with your position budget to create a competitive salary range for the role.
5. Develop a salary banding model
Salary bands can assist in evaluating the candidate’s worth to your organization as a whole. Positions are ranked by factors such as education, experience and responsibility to guide the pay rate for the employee. For example, if the candidate under consideration is right out of college or university, they likely will have little to no experience and will fall into a lower pay band. Establishing set pay grades can help employees feel motivated to work towards promotions or the next salary band.
6. Consider additional forms of compensation
Remember, a competitive compensation package does not solely consist of a high salary. It also includes benefits, pension and RRSP options, and other perks such as group home and auto insurance discount rates, education reimbursement programs or corporate gym rates. And don’t overlook the attractiveness of competitive time-off policies and flexible work schedules.
Incorporate these tips into your process for establishing pay rates and watch your competitive position grow!