July 27, 2023
Cheryl Goh, Product Marketing Manager
In the contemporary business world, it's not only the quality of products or services that set you apart. Believe it or not, the battle also encompasses who can provide the most attractive compensation packages. This is where compensation benchmarking comes into play, a concept our platform, compensly, embodies.
Compensation benchmarking is akin to the adage, "keeping up with the Joneses," but in a business context. It involves comparing your company's compensation policies with those of your competitors or the market average, a process that allows businesses to determine the most suitable pay and benefits to offer their employees. For a more comprehensive understanding, you can check out our comprehensive guide to compensation benchmarking.
Compensation benchmarking isn't just about base salary. It takes into account all aspects of compensation, including bonuses, benefits, and equity. Imagine it as a puzzle, each piece fitting together to form the perfect compensation package.
Compensation benchmarking is crucial for a variety of reasons:
Would you rather have an industry expert work for you, or for your competitor? Competitive compensation packages, like honey, attract top-tier talent.
Keeping your top performers is as important as bringing them in. A well-benchmarked compensation package gives employees fewer reasons to look elsewhere. In today's job market, this is increasingly important. Read more about the importance of compensation benchmarking in today's job market on our blog.
Companies that pay well are viewed favorably, and compensation benchmarking can enhance your company's reputation, making it a preferred employer.
"Equal pay for equal work" is simple but crucial to uphold. Compensation benchmarking ensures employees are paid fairly, an aspect compensation analysis can shed more light on.
Compensation benchmarking is a process that involves several steps:
Job roles should be matched appropriately during the benchmarking process, just like apples should be compared with apples.
This step is similar to a treasure hunt. The data you uncover will guide you in structuring your compensation packages. At Compensly, we make use of API integrations with HRIS to gather reliable, real-time data.
After the analysis, it's time to implement changes. This could involve adjusting pay scales, updating benefits, or redefining job roles. Our blog post on how to transform your compensation strategy with compensly can guide you further.
Despite its benefits, compensation benchmarking isn't without challenges. They might include a lack of comparable data, rapidly changing market conditions, or resistance to change internally.
Compensation benchmarking is more than just a numbers game. It's a strategic tool that influences your company's success significantly. It aids in attracting and retaining top talent, enhances your company's reputation, and promotes fairness and transparency.