I’m often asked ‘Where do we find the market data?’ There are a lot of salary reviews and documents online. However, I think the best way to get market data is to simply use a job search engine. Put in the job title and see what kind of salaries people are paying for it. That’s really what market data is, this is what an employee looking for a job today will see.
While paid salary data subscriptions are available, this information will have a delay on it, because the data might be from six months or nine months ago. You’ve got to supplement it with more current information.
‘the best way to get market data is to simply use a job search engine’
Considering internal relativities is crucial. Someone might say, ‘I want more money. I’ve seen the job ads, and I can get this amount’. But if you agree, it will have an effect on other roles within the business, for example, roles that are just as senior or employees who have the same level of experience.
You can’t simply change the pay for one role, you need to have a look at the salaries of other roles relative to that position. You may still decide to raise a salary, but it may mean you need to increase the salary of more than one person. If you don’t consider internal relativities, you can end up with inequity over time that can impact on employee engagement.
For smaller businesses that may struggle to compete on salary alone, exploring other options can be beneficial. This may include implementing incentive plans or retention bonuses – which means if somebody’s still with you in 12 months or 24 months to get a certain amount of money.
You can also offer non-salary-related benefits. Exploring various employee benefits can also help attract and retain talent. For some ideas, check out my previous post 12 Employee Benefits that will Attract and Retain Top Talent.
In addition to having a pay strategy, open and transparent conversations around pay are crucial. You don’t want all your conversations to be ‘squeaky wheels’ asking for salary increases. That’s not fair and it’s not equitable. The people that are constantly asking for money are also going to feel dissatisfied, which is not good for your employees or for you as a business.
Transparency is key. Workday reported that people quit when they can’t discuss their pay, not necessarily when they’re not paid enough. Having something in writing outlining the pay strategy and processes around pay can help people to understand the system.
‘people quit when they can’t discuss their pay, not necessarily when they’re not paid enough’
In my experience with employee focus groups across different businesses, employees often say they are confused about the process for salary reviews rather than voicing concerns about being underpaid. It’s really important to have this information documented and available to people.
You’ve also got to think about affordability. If the business is not in a position to afford a salary increase, this should be part of the conversation with employees.
However, if affordability is your primary concern, it’s important to review your pricing strategy for products and services. Are they priced to provide enough profit to afford the employees you need? Maybe you need to be more innovative and develop new products and services that you can offer the market, so that you can increase the salaries of your people.
If people are saying ‘I want more money,’ maybe they’re asking because they’ve been given more responsibility. It’s crucial to evaluate whether they are in the right role and if their position has evolved.
You may need to recognise them with a new position, title, or description, or even a hierarchical change. Reviewing your structure can be really important to understand how to accommodate your employees.