In the world of aggressive hiring practices, high attrition rates, poaching by competitors, and escalating salary expectations, salary benchmarking serves as a tool to attract new talent and retain older ones while still keeping the budget in check. Due to the dynamic nature of the job market, keeping a finger on the overall pulse may be difficult, and companies and market researchers should instead focus on individual sectors. Data needs to be used carefully and any conclusion drawn should be verified before being worked upon. For instance, falling salaries in one sector or region may not have an impact on another. Similarly using only last year’s internal data to decide on Salary Benchmarking figures for this year may also backfire.
Salary Benchmarking in 2024
Due to the massive amounts of data available on various job review websites, the methods of salary benchmarking have also evolved. Today, you need to factor in the role, the years of experience asked for, the location, sector, industry trends, and non-financial benefits such as remote work options. The process also helps you zero in on how much an employee is worth to your company in 2024.
The new breakthroughs in Artificial Intelligence, Natural Language Processing and Advanced Data Analytics has also revolutionized the way in which salary benchmarking is being conducted. Vast amounts of data now allows HR personnel to analyze market trends, benchmarks, and compensation packages with accuracy that was unimaginable earlier.
Having access to a real time job data feed as well as algorithms that can consume this data in real time would enable you to make salary-decisions using historical and fresh data in tandem.
What maketh the salary
Salary Benchmarking decisions can be complex and no matter the amount of data in your hand, even a slight difference in the role requirements may change the equation. Instead of just looking at the name of the role or position, you need to take into account the years of experience with a particular tool, the unique skills required, and the responsibilities that need to be shouldered.
Salary benchmarking has quickly moved from a “good to have” to a “must have” within a few years. Given its importance, let’s look at some of the benefits that companies can harvest when planting the seeds of using salary data effectively–
Competitive Salaries
One of the biggest challenges faced by companies who offer salaries that are not at par with the market is employee retention and getting their hands on top talent. Similarly those who pay much higher than market rates to hire quickly are likely to face internal issues due to salary discrepancies between employees in similar roles or will soon see their operational costs boom.
Mitigation of Legal Risks
Companies that do not ensure uniformity in salaries between employees with similar responsibilities can end up facing litigation on discrimination based on race, age, or gender. Using salary data effectively enables companies to stay compliant with labor laws while promoting a transparent and healthy work environment. Companies today are struggling to meet their diversity and inclusion goals and salary benchmarking can go a long way towards fostering a more inclusive workspace for all.
Strategic Workforce Planning
Salary benchmarking is not just comparing numbers and deciding how much you need to pay the new analyst you are hiring. It also involves an understanding of market trends and figuring out which roles or skills are difficult to hire for. All of this information helps in creating a year-long plan for hiring. Salary data helps in strategic workforce planning since you would have the total budget on one side and the role wise salary ranges on the other. With these two, you can mix and match and finalize your hiring potential for the given time period.
Better Branding as an Employer
Companies that pay as per market rates (often better than it), and also offer a healthy work environment with decent perks are often well-known among job applicants. They usually take up the top spots in the “dream company list” of most college-goers. This enables them to get the cherry on the top of the cake. Also whenever candidates have multiple offers in their hands, they are more likely to join such companies that have a better brand value and higher following.
Leaders who grow with the Company
If your company follows salary benchmarking to the tooth and ensures both new joiners, as well as existing employees, are paid what they are owed, employees are likely to stick around longer. This in turn would give rise to a new generation of leaders who would have grown with the company and would best portray its ethos and culture. This would serve the company far better than having to hire only outsiders to fill up all senior-level positions. Hiring for senior-level positions can also come at a higher cost as compared to promoting internally.
The Complexity of Comparing Job Data.
Given the rise in job boards, job review websites, and job platforms (like LinkedIn), the data is spread far too wide for you to tackle all by yourself. You may very well need to scrape data from hundreds of websites and thousands of web pages every day, just to collect salary information related to a particular job role. Things become even more difficult since a lot of companies do not post the salary in job posts.
Others post salary ranges- which are again slightly more complex to consume. Similarly, employees also post salary ranges along with a variety of perks. For instance, two companies offering the same salary may look like equals on paper. However, in the fine print, you may find one offering a hybrid 2-day-in-office model along with free lunch and cab service and a yearly paid vacation. This would tip the scale easily.
New-age companies also offer variable salaries, bonuses, and stock options. Putting these into the mix, you need to have a fully mature mathematical model at your disposal to make any sense of the data that you consume. Otherwise, you may end up drawing highly erroneous conclusions.
This is why at JobsPikr, you get both the raw job data from thousands of sources across the globe as well as a ready-to-use salary benchmarking tool in case you want to directly jump into the analysis phase. With millions of job records being pulled in daily, there’s no dearth of data on our platform and no chance of you missing market trends when comparing salaries.
