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An essential guide to salary benchmarking

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  • 30 October 2021
  • Pay Benchmarking

Paydata is one the leading salary benchmarking companies in the UK, providing employers with the tools and information they need to ensure they are offering fair and competitive pay to their staff. 

The job benchmarking process is essential in retaining existing team members and attracting new top talent to your company, but it’s something many employers overlook and don’t see the value in.

There are many benefits to be gained from using a salary benchmarking tool. To help you better understand what it is and how it can help you, we’ve put together an essential guide to salary benchmarking.

an employer is discussing salary with an employee

What is salary benchmarking?

Salary benchmarking is the process of employers assessing the salaries and benefits packages on offer for specific job roles across their industry. This allows them to see how much their staff could be getting elsewhere and whether they’re competitive in their offerings. Salaries tend not to be plucked out of thin air – they are based on existing data collected through salary surveys carried out by companies like Paydata. Whilst pay isn’t the only incentive behind employees choosing to take up a new a job offer or stay at their current workplace, it definitely plays a role. No one wants to be underpaid for their work, and no employer wants to lose their employees to competitors. Salary benchmarking can prevent this, ensuring your staff are paid in line with other workers in similar job roles, as well as allowing you to implement new reward packages that make you a desirable employer that attracts the best people in the industry.

What is the salary benchmarking process?

Salary benchmarking without using a consultancy like Paydata can be difficult. Job adverts are often posted online with approximate salaries next to them, but this isn’t guaranteed, and what’s actually on offer can differ greatly to what has been posted. This is because personal employee experience can affect the salary on offer dramatically, and there’s also the chance that an inflated rate has been posted alongside the job offer to attract top talent, but it won’t necessarily be paid out. This makes self-research unreliable.

Paydata’s salary benchmarking process encapsulates the results of salary surveys. We have been doing salary surveys for 20 years, over which time we have refined our process to cover most job titles and sectors, providing accurate information to employers who want to benchmark salaries.

What are the benefits of salary benchmarking?

There are a number of different reasons as to why salary benchmarking is beneficial to you as an employer. Firstly, it will ensure you’re retaining your existing workers and not losing them to competitors based on salary alone. As mentioned previously, salary isn’t the only driving force behind employees seeking employment elsewhere, but it certainly plays an important role. This is the case even more so for longstanding employees in a position you haven’t recruited for in a long time.
“As time passes, employees tend to get paid more.”

How can we help?

Paydata are a leading source of UK salary benchmarking data and provide the expertise, insights and tools to help HR professionals manage their pay and reward practices. Get in touch with us if you need support with your benchmarking requirements.

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For example, an entry level marketing executive can expect to get paid more now than their predecessors did just five years ago. If you haven’t recruited for a marketing executive during that time, there’s a high chance your current marketing executive is being underpaid and they could reasonably expect to get paid more elsewhere. So, to keep existing employees happy and to ensure they’re getting paid what they’re worth across the industry, make sure you’re regularly checking out salary surveys and how to benchmark a salary.

group of colleagues discussing salary structures

 

Another benefit of salary benchmarking is that it can help you attract new employees to grow your business. You can advertise true to form salaries online, and you can also encourage your reputation as a fair and competitive employer. Word of mouth is invaluable to job seekers, so if you want to ensure you’re able to expand your workforce and fill vacancies quickly, you need to ensure your reputation is up to scratch. Paying your employees poorly compared to other companies will do nothing for word of mouth recommendations, so this is another reason why salary benchmarking is so effective.

The final major benefit of salary benchmarking is the effect it has on your employees. Knowing they’re well compensated for their efforts will boost their morale and make them feel more appreciated, and this can lead to improved productivity and job satisfaction.

Paydata salary benchmarking services

It is clear to see the importance of salary benchmarking, but if you’re unsure on how to benchmark your salary offerings, Paydata can help. Our team are experts in salary benchmarking based on our comprehensive, professional salary surveys. If you want to learn more about the meaning of salary benchmarking, the benefits of it, and how to do it, please contact us and we will be more than happy to assist you.

 

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