What Are Salary Surveys and When Do You Need One?
The hiring process never ends in companies across the globe. And most companies wish they can reduce their turnover and retain employees. But it’s not that simple. That’s where salary benchmarking and salary surveys come in.
Employee retention is becoming harder every day. With new companies and startups emerging offering stellar salaries, it might be hard to compete.
And though salaries aren’t the only deciding factor whether a candidate will leave or join a company, they play a major role in that decision.
So, how can you ensure you’re offering fair salaries inline with the market? How can you retain employees for whom salaries are a deciding factor?
The answer is using salary benchmarking and surveys.
In this article, we’ll be talking about what salary benchmarking is, why salary surveys are important, and when you need a salary survey.
What Are Salary Surveys/ benchmarking?
Compensation benchmarking or salary benchmarking is the process of identifying job salaries in the market to ensure you’re offering fair and competitive salaries to attract candidates.
To match your company’s salaries to those in the market, you’ll need to match the job description, title, and job requirements.
When conducting your research, you’ll need to take the following into consideration:
- Geographical location (are you in a large city? A small one?).
- The size of your company.
- Level of education.
- Years of experience required.
You’ll then need to conduct your market research for those roles and salaries and compare your findings with those in your company. Are the salaries offered in-line with the market? Or are they above average or below average?
The best way to benchmark salaries is by using a salary survey.
What are the benefits of salary surveys?
Salary surveys offer insight about salaries for a certain job role or several, thereby helping companies in many ways.
Here are a few reasons why you should consider salary benchmarking surveys:
1- Helps you stay competitive
Let’s face it: Top talents are few and companies are constantly competing for them. Moreover, some fields are more competitive than others.
Hiring network engineers or software engineers can be tricky, for example. Similarly, hiring senior executives, team leaders, and managers regardless of field can be a tiring process. Not to mention, you’ll need to offer competitive compensation alongside other benefits to attract talents.
Analyzing salaries in the market allows you to see industry averages and where your business stands in the industry.
It also helps you ensure your salaries aren’t too low to drive away potential candidates or current employees.
2- Helps with employee retention
Salary surveys are important for businesses today because they help you retain employees and reduce turnover.
Whether companies admit it or not, employee turnover is a costly headache.
It’s a headache for the HR team to find suitable candidates and for hiring managers to conduct interviews and find suitable candidates for available jobs.
Hiring managers are also tasked with easing the transition between the person leaving and the newcomer. Moreover, high turnover means hiring managers lose time, productivity, and may have to spend time teaching the newcomer ‘the works’ of their new role.
But salary benchmarking surveys help you reduce all that lost time and money (and possibly clients). By offering employees what they’re worth – based on the job needs and their skills and expertise – you can retain them for a longer period of time.
Using salary benchmarking data also helps you boost retention by offering fair pay so your employees don’t leave you for the competition.
3- Helps you maintain balance
Salaries are one of the most important factors for many employees. So important that many employees are willing to leave their jobs – and even their comfort zones – for a higher salary.
And with inflation on the rise around the world, this shouldn’t come as a surprise.
So how does a compensation benchmarking help?
Compensation benchmarking helps you see the pay ranges for various jobs in your company compared to the market. You can then compare your organization’s salaries with available budgets, request higher budgets, or decide how your HR strategy will operate.
Reviewing salary surveys also helps you make salary adjustments internally to stay in-line or ahead of the market.
You don’t want to offer low salaries and watch your employees leave so you can realize you’re not paying them fairly.
Compensation surveys support your efforts – as a company or HR team – to maintain a fair pay structure within your organization.
4- Helps you keep up with expectations and trends
Conducting compensation benchmarking surveys helps you understand the market and job roles in your company better. They can also offer forecasts into certain fields along with hiring and pay trends in the market.
Salary survey data is regularly updated. However, these updates may differ from one survey creator to another.
However, conducting your own survey is a lot of hard work, along with time and resources you don’t have.
When do you need a salary survey?
You now know the benefits of conducting and reviewing salary benchmarking surveys regularly. But when do you need a salary survey to begin with?
Here are the three top cases companies and organizations tend to seek out salary surveys.
1) Opening new position(s)
If your company is opening a new position – one that you didn’t have before – then you’re going to need a salary survey to understand what this role entails and the pay range for it.
This also applies to businesses and organizations adding new teams or departments. Many businesses today are adding digital marketing teams for example.
But how can you hire people whose salaries you’re not familiar with? More importantly, hiring a team means creating a hierarchy of positions with several pay levels.
A salary survey helps you identify how much you should be paying for these new roles and whether or not you can afford them.
2) Launching a company or business
Whether you’re planning to launch a small business, a startup, or any other form of business, you’re likely to need to benchmark salaries to attract candidates.
Even when hiring fresh graduates, you cannot offer the lowest salary and hope for the best. Candidates today have to work hard to acquire both soft and technical skills.
Accordingly, they expect to be paid for the hard work they’ve put into acquiring those skills and the job they’re applying for.
3) Ensure fair salaries
Before the coronavirus pandemic, salaries were a taboo topic in the Middle East in general and in Egypt specifically. However, post-pandemic, candidates are more open and willing to talk about and negotiate their salary expectations.
As a business, it’s important that you offer fair salaries to your current and future employees.
While some startups have taken the route of offering significantly high salaries to make up for the risks involved, a salary survey ensures you’re being fair.
After all, offering fair salaries and not underpaying employees is a key to employee retention and business success.
Wrapping it up
Benchmarking your company’s salaries against the market is an essential step for any business that wants to be successful and retain employees.
Businesses that review salary benchmarking surveys regularly are better positioned to attract top talents in the market.
They’re also more likely to create a better workplace culture that helps with employee retention and growth.