Having market intelligence as well as a good understanding of where your organisation sits in relation to the market is essential in order to set an effective reward strategy. This will enable you to recruit new employees at the right salary and ensure you are rewarding your existing employees appropriately in order to retain your key talent.
With a wealth of information available for free through recruitment agencies and online forums, employees are more informed than ever about market rates of pay for their roles. In order to compete for talent and retain key people in the long run, your organisation must not only develop fair and market competitive salary ranges but review them on a regular basis to ensure you are keeping up with the market.
It’s important to remember you can’t always compete, you might be a CRO, HEOR or Market Access consultancy, competing with big Pharma for talent, Big Pharma often have deep pockets offering larger salaries, car allowances and bonuses that can’t always be matched by consultancies and agencies, and that’s OK, think about what else you have to offer, flexible working, remote working etc and have these positives ready for when you’re talking to candidates.
Where to start?
You need to start by investigating and answering the below questions:
What roles will you be benchmarking?
Who are your competitors?
Identify the recruitment agencies you have good relationships with, in the area you are benchmarking
Who has asked you for the data, be cautious on who you give the results too, it’s best to handover to a senior HR person and let them decide who needs to see the results?
Choosing the market data
The market data you use is the first and possibly the most crucial step in the salary benchmarking process If the right data sources are not used you may end up carrying out an extensive Salary benchmarking exercise which lacks credibility as the business and line managers do not trust the data.
You should be able to clearly articulate how the data is collected, whether data is aged, geographical coverage as well as how the final output is calculated. After all, this data will have an impact on the pay decisions managers make in the annual review process or when recruiting or promoting team members. If they don’t trust the data that is being provided to them then it is very unlikely that you will be able to influence their decisions and coach them.
Where to find your data
You’ll be surprised how much data you already have, start by mapping out the data from your ATS, from all your previous screening and pipelining calls of suitable candidates for the roles you are benchmarking.
There is a wealth of information available for free through your recruitment agencies and online forums like Glassdoor, Speak to your recruitment agencies and partners that normally support you with your recruitment, most recruitment agencies complete a yearly benchmarking exercise for their specialist areas and will normally share this with you.
For robust and trusted data you need to get as much data as possible from 3-5 other sources like recruitment agencies beyond the data from your ATS. the more places the better.
Challenging the data
When looking at the information you have collected from outside of your ATS and recruitment partners it is important to consider the following: Use data based on in-depth market research and analysis rather than anecdotal data from a handful of companies Job adverts and recruitment data tend to show what companies are willing to pay for positions in their company rather than what they are actually paying. For example, a role may be advertised with a salary of ‘up to £50K’ but the actual salary offered to the successful candidate may be significantly lower
Recruitment and job advert data is not robust and often based around job titles only. They don’t tend to undergo a job evaluation and data cleaning process. For example, a finance analyst in one company may be equivalent to a finance manager in another. A good salary survey will look at the content of the roles and try to ensure that we are looking at equivalent roles when establishing salary ranges rather than equivalent job titles.
Matching your Jobs to the data
Most salary surveys tend to have a job levelling structure. A job levelling structure will describe a series of progressively higher jobs distinguished by levels of knowledge, skills, and competencies. If your organisation also has a job levelling structure, then it would be a good idea to establish a link or matrix between the levels in the survey data you have chosen and your organisational levels. This will simplify the job levelling process although I would still recommend a robust validation process and reviewing the roles thoroughly.
Collate your data:
Now you have your data, it’s as simple as creating a Excel spread sheet, like the one below and begin inputting the average ranges that that have come from your data sources.
Below is an example for a Medical Communications benchmarking exercise
Presenting your salary benchmark data
As I mentioned earlier, be careful who you share your findings with, ideally you would hand it over to a senior HR professional in your organisation so they can decide who should have visibility of the data. Salary benchmarking in the wrong hands could end up damaging moral and creating more work for your HR team and Hiring Managers and will cause you to fall out of favour fast.
Comparing current employees’ salaries with your market findings
There are many ways you can present your salary benchmark data. However, the simplest and most effective way to do this is by showing the compa-ratio for each employee. Compa-ratio is calculated as the employee's current salary divided by the current market rate for that role as defined by the salary surveys you are using. Presenting reports in this way to the managers gives them just the right amount of detail and enables them to make more informed pay decisions.
When finished, think about the below
Do you want to match your competitors, or offer better packages to attract candidates away from your competitors and be the employer of choice? (market median payer or, lead the market?)
How does base salary fit into your overall reward strategy in relation to, for example, bonus or benefits?
Daniel Laghaney - Healthcare Communications Recruitment Agency
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