Are you paying your employees competitive salaries?
According to the Wall Street Journal, 'hiring employees is just a start to creating a strong work force. Next, you have to keep them.' Offering your employees competitive salaries is one way to help retain them. Here are two tips you can use to ensure your employee's salaries are market related.
High employee turnover can cost your company time and productivity, especially when employees leave because their salaries aren't market related.
But pay restructuring can help your company retain its employees. And the benefits go beyond just retaining employees.
In fact, pay structures have the following benefits:
You can ensure non-discriminatory pay and eliminate favouritism.
You can determine if and where wage gaps exist.
Pay structures can assist you in retaining key staff and attracting necessary skills.
You can create a defensible base for wage negotiations.
You can take strategic pay decisions and link pay to strategic objectives.
But how do you ensure your company is paying employees market related salaries?
Two ways to make sure you're paying market related salaries
Develop pay structures according to guidelines you develop. These guidelines are best developed with various company stakeholders. Examples of stakeholders you can include are: Representatives of line management, employee representatives and your company's finance department, which has to effect payment and determine the tax implications of your guidelines. The Practical Guide to Human Resources Management advises you consider these factors when you develop your guidelines: How will your corporate mission, vision and objectives best be achieved? Which skills are in short supply or are strategically important to warrant better than average pay levels? And what does the law dictate?
Conduct market remuneration comparisons. There are three ways to conduct market remuneration comparisons:
Conduct your own research into market rates. You have to consider the time you'll spend to design the survey, conduct the survey and collect, analyse and report on the data.
Research job advertisements in the media. For example, look in the job section of the newspaper at the salaries offered for various positions. But 'keep in mind that salaries offered in job advertisements are intended to attract a response and are likely to be high and don't reflect true market rates,' says the Guide.
Buy a commercial remuneration survey. These are available commercially from consulting firms. These surveys vary in costs depending on the type of survey and the extent of the database. Companies running surveys include P-E Corporate Services SA (Pty) Ltd and 21st Century Pay Solutions Group.
There you have it! Using these methods will help ensure your employee's salaries are market related.
Note: 5 of 1 vote