How Frequently Should You Research Competitor Compensation Packages

When crafting compensation packages, you will want to have a competitive edge over your competitors. As this is the case, researching your competitor’s compensation packages can help you understand what the market looks like in comparison to what you offer. So, how often should you conduct compensation research?

While there is no definitive answer as to how often you should conduct these types of research, there are some guidelines that can help you decide. There are many factors that affect when and what type of research you will conduct. In this article, we will look at what you can do when researching competitors’ compensation packages and how frequently you can conduct this compensation research.

Understanding Your Organization’s Current Compensation Package

Before researching competitor compensation packages, you need to understand your organization’s current package. Knowing how your current compensation packages are structured will help you look at competitors’ packages in the same way. There are a few areas that you should look at.

Be sure to look at all available data points, including base pay and equity information where applicable. You should also include additional benefits, such as flexible work schedules or work-from-home options. Understanding the differences in compensation packages and what each team member receives can help you decide who may benefit from additional compensation or added benefits.

Researching Competitor Compensation Packages

The more up-to-date the research on competitors’ compensation packages, the better. This helps you be aware of any changes happening in your industry or market. As well as this, understanding what other organizations offer can help you make sure your compensation package is competitive and attractive to job seekers.

When researching competition, you should consider:

• Job titles

Many organizations will use different titles for the same job. As this is the case, you need to make sure you use consistent terms when conducting compensation research. Ensure you do an analysis of job titles and responsibilities to help inform your decisions as you move forward.

• Unadvertised benefits

When performing compensation research, you must remember that it isn’t just about salaries. Find out whether other organizations are offering additional benefits, such as insurance or vacation days. Different benefits can give one organization an edge over others when recruiting.

• Location also matters

When studying compensation packages, it’s important to realize that location may be a deciding factor for job seekers and employees. Study what other organizations in the same city or region are offering to their employees. Pay scales can vary by location even within the same organization, so it is vital to take this into account.

Gathering Relevant Information

Once you have researched the basic components of competitors’ compensation packages, you can begin to dig deeper. This will be a time-consuming task that will require effort and often money to acquire information. Here are the main pieces of information you need to look for:

• Salary data

When looking at a certain position, you need to understand what the market rate for it is. Use industry surveys and job postings to find this information.

• Benefits

As mentioned earlier, there are many unadvertised benefits that organizations offer. Organizations do also advertise their benefits packages, however, which can provide you with an understanding of what else you can offer. Benefits include health insurance, retirement plans, vacation policies, and any other unique incentives like free gym memberships.

• Company culture

Company culture also needs to be taken into account when researching your competitors’ compensation packages. A competitor may have a great benefits package, but they could have an unhealthy work environment that deters job seekers. The poorer the work environment, the more dissatisfaction there will be among employees, which can lead to high levels of employee turnover.

Analyzing the Data

Once you gather this data, you need to analyze and interpret it. There are many tools that you can use to help inform your decisions on your own compensation packages. To start, you can create a spreadsheet of your findings so you can easily compare data about offers side-by-side.

You must decide which metrics are most important to your analysis. This can be a specific job position or the median pay rate for several jobs. Once you’ve done this, you can see how they compare to your compensation packages.

From this, you can make any changes in your pay structure and compensation packages as you see fit. Pay decisions should be made with the intention to maximize your organization’s growth while staying within the remits of your budget. Examine the data carefully and determine how your organization’s values and objectives affect the pay for each role.

How Frequently Should You Analyze Competitors’ Packages?

When deciding on the frequency of analyzing your competitors’ compensation packages, you need to consider how often you will need to re-evaluate your compensation practices. Generally speaking, you should be researching competitor packages at least once a year. If market trends or indicators suggest that the market is becoming more competitive, you should analyze it more often.

Researching the way your current compensation packages and benefits compare to those offered by competitors helps you stay ahead of the curve. Here are a couple of pointers for you when deciding how often to analyze competitors’ compensation packages. Here they are:

• Assumptions

When you choose to analyze competitors’ packages, you should start by making a few assumptions. Gather data on competitors and make assumptions about what they are offering their employees. Doing this will help you understand how others are structuring their packages and give you ideas of how you can tweak yours.

• Market research

Look beyond salaries to see what type of benefits the competition is offering. Analyzing total compensation packages can help you determine where your organization stands in relation to competitors. This helps you make data-driven decisions when you create a new package or develop new incentives.

Ultimately, the more often you research your competitors, the more up-to-date you will be. It depends on the resources at your disposal, the trends of the market, and how accessible information will be to gather data. If effective, however, you have the opportunity to put together better compensation packages that are attractive to job seekers and employees.

Conclusion

Researching competitors’ compensation packages can be critical to your organization’s success. Having an understanding of the market rates can keep you informed and help you make better decisions for your compensation packages. Undertaking this research should be done periodically – at least once every year. This helps ensure that your organization’s compensation policies are keeping up with the changes in the market and helps you have an edge over the competition.