The Importance of Benchmarked Compensation Data - American Society of Employers - Anonym

The Importance of Benchmarked Compensation Data

Benchmarked compensation data provides organizations the information they need to make sound pay decisions for hiring, promotions, internal equity salary adjustments, and general compensation planning.

 

Do you want to pay more than you need to for your next hire?

Can you afford to guess at your biggest expense–what you pay your workforce?

Do you want to lose key employees because your wages are not competitive?

 

Assuming you answered no to these questions, then benchmarked compensation data would be of value to your organization.  The ability to balance the needs of attracting and retaining talent with fiscal responsibility of the organization is a key priority for corporate leaders.  Salary benchmarking can be a vital key to the success of an organization.  If salaries are above market, then you are losing out on profit; if they are below market you’ll suffer from high turnover.

 

A lack of salary data could not only make it difficult to retain talent if you are paying below the market, but you could also be paying above the market without knowing it.  Your wages might already be competitive, but possibly more competitive than they need to be.  Think about even over paying by just 1% of total payroll.  That could easily be thousands of dollars needlessly spent each year.

 

Organizations must ensure they are paying their employees fairly; it directly affects employee retention.   The 2016 Global Workforce Study found that 53% of employees believe their pay is fair when compared to people in similar roles at other companies. However, nearly one quarter of respondents (24%) said they are not paid fairly.  Employees that feel underpaid can reduce productivity and result in increased turnover.  It’s important to address pay issues with employees, and have local, benchmarked data to back up what you are paying them.  Local data is key, since wages vary drastically across different regions of the U.S.

 

Every organization needs to be competitive when it comes to talent, and without compensation data to understand what the market is paying, you could be at a disadvantage when it comes to attracting and retaining your talent. In ASE’s 2017 Pay Administration Survey the majority of Michigan employers cited market pricing as the basis for their compensation program for all classifications other than Production Union employees.  

 

It’s important to review data annually. While the overall market might not be seeing big changes, there could be exceptions based on industry or career fields.  For example, in 2017 the overall actual salary movement was reported around 3% in Michigan, but within that overall figure there were departments and positions where the wage movement was significantly more than that – and some much less.  It’s important to keep your finger on the pulse consistently.

 

It is always recommended to utilize multiple survey sources in order to make the most sound and defensible decisions when it comes to pay.   If you are looking for accurate, local compensation data, ASE is currently collecting data for its 2018 Compensation Surveys.  With one online questionnaire we collect data for our three local compensation reports: the Production and Maintenance Compensation Survey; the Office, Clerical, and Technical Compensation Survey; and the Supervisory, Managerial, and Professional Compensation Survey.  This is local, benchmarked data updated annually.

 

We encourage you to participate in our surveys.  When completing salary surveys, the biggest chunk of time is spent matching your jobs to the benchmark positions in the survey.  While that may seem tedious and not important, you are not only making sure that the data you are reporting is to the correct benchmark positions, but you will also be able to better use the reported data with accuracy in adjusting your organizations’ wages.  This is time well spent in that most salary surveys offer the results for free or heavily discounted rates to those organizations who participated.  We at ASE provide free results to member participants and discounted results to non-member participants.

 

If you are interested in participating in ASE’s 2018 Compensation Surveys and have not yet received participation materials, please contact ASE’s Survey Services department at 248.223.8051 or [email protected].

 

 

 

Sources: hrdailyadvisor.com, robertwalters.co, helioshr.com, ASE 2017 Pay Administration Survey, ASE 2017 Compensation Survey

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