How Competitive Are Your Salary Rates in Today’s Market? (And Why It Matters)
In today’s saturated job market, candidates are looking to take advantage of competitive pay, making it increasingly necessary that employers offer competitive salaries to attract qualified candidates. Competitive pay is often affected by the geographic area your company is in, the job title, supply and demand, and the skill set of the candidate. With an added emphasis on work/life balance, workplace safety and company culture, many employers are struggling to determine where salary should be prioritized in the recruiting process.
Why does competitive pay matter?
You might be thinking that raising pay rates is just a quick fix to attract applicants; however, this isn’t the case. When you offer wages that are competitive to similar positions, you’ll get the best candidates possible. Furthermore, you have to ask yourself if you’ll risk losing current employees or potential applicants to companies paying higher wages.
So, where should you start?
1. Have you done an internal wage review recently?
An internal wage review allows your company to stay on top of market changes and shifts, impacting employee engagement, retention and productivity. If you haven’t conducted a wage review in the past six months, it’s a good idea to evaluate salary data for each position. After compiling data, assess where your salaries align, and if necessary, take steps to address overlooked compensation for your top performers.
2. Define what your market pays for the position.
If your company only analyzes salary on an individual basis, you might be missing out on critical insights. Ensuring you’re paying employees competitive pay for their skill level is a good indicator of employee retention and can help in the hiring process. If you don’t already have them in place, look to develop wage benchmarks for positions based off your findings. This will make it easier to frequently appraise pay rates, define how competitive you are, and assist with future financial planning.
3. Make comparisons to other local companies.
After conducting a salary review, compare these numbers to local companies in your geographic region with the same positions or companies of comparable size. Not only do you want to make sure you’re paying your employees market value, but you want to be sure you are offering comparable salaries to your competitors. Gathering this intel is as simple as making it a habit to run periodic searches on popular job boards, scanning social media or reviewing current advertising being run by businesses with similar workforce needs.
Recruiting for top talent is as aggressive as ever. There are many factors at play in order to be competitive, and predictably pay will always be one of the top considerations. Consider putting a system in place to continuously look at data trends. Apply this knowledge to make sure that salary won’t be a deterrent in attracting top performers and retaining your own. If you’re unsure of where to start, consider working with a staffing agency like The Reserves Network. We have a wealth of experience working with different companies in need of employees in a variety of markets. To get started, visit our website today.
