How to Stay Current with Market Rates for Jobs in Your Organization

Strategic thinking that allows your organization to remain competitive in the long run requires understanding the market through compensation research. But each industry, position, and location have its own considerations. Staying up-to-date requires proactive wide-scale research on a regular basis to ensure your data is relevant and offers the best insights.

Read on for our tips on how to conduct your market compensation research for each job in your organization. We’ll also explain how to use this information to make the best compensation decisions.

The Importance of Compensation Market Research

Companies have compensation budgets. These budgets play a role in cost management. When you’re making informed compensation decisions, you can ensure a budget for rewarding your top talent. As we all know, pay and benefits are vital in employee engagement and retention rates.

Making data-driven pay choices means your organization can confidently set pay ranges for each role and remain competitive in the industry. The process of conducting market research will also contribute to writing better job descriptions and encourage pay transparency as you’ll be making informed decisions and have the data to prove it.

What is the Best Strategy for Researching Current Market Rates?

Unfortunately, there’s no one-size-fits-all approach to compensation research. Your strategy will depend on the size of your organization, industry, and budget.

Here are some tips on how to conduct your research:

• Start by taking an inventory of your existing staff and their positions. Ensure you have accurate job descriptions for each role that match each team member’s responsibilities. Note how much each role earns.
• Develop a compensation strategy that defines how your compensation choices align with your company vision. How much are willing to pay the talent you’re attracting? This will help you define who your competition is.
• Research external market data to understand how competition in your industry is paying their staff for similar positions. Consider the geographic location of all your staff so you have relevant data. Take data from companies that are comparable to yours.
• Use online salary surveys or benchmarking software to compare datasets organized into each important variable, including job type, skill level, and location.
• Review your data regularly and adjust job descriptions and compensation packages accordingly – this is an ongoing process.

Taking the time to do this research systematically will ensure you have the current market data. You’ll be making compensation choices with confidence knowing you’re doing what’s best for your organization to attract and retain the best of the best.

Tools & Techniques Used for Compensation Research

So where can you find up-to-date information on market rates? There are a number of tools and techniques that can help you find relevant data.

• Salary surveys –Compensation surveys are a valuable tool for establishing market benchmarks to understand what other companies are offering their employees.
• Job boards – Online resources such as job boards give you insights into the salaries on offer within your industry for specific roles and their job descriptions.
• Third-party reports –Reports measure salaries at an industry level to help you understand what your competition is willing to spend on wages.

These tools can help you paint a picture of the way other employers are paying their staff. You’ll need to collate the data in a spreadsheet or use software that can help you chart the data. This will help you decide whether your compensation plans will be above, below, or on average with market rates.

Things to Consider When Benchmarking Jobs for Research

When conducting market research, you’ll need to consider some factors. The obvious first step is analyzing jobs within your industry. Then you need to consider geographic locations, company size, facilities, and budgets. A startup tech company can’t compare its compensation choices to those of Google, for example.

To reliably compare a role in your organization to another’s, you’ll need to identify specific skills and responsibilities. Don’t match jobs based on titles alone. Often these can be misleading, and they vary greatly depending on the company. This step will also help you fine-tune your job descriptions.

Don’t overwhelm yourself benchmarking every role in your company at the same time. Consider one type of position or department at a time. This flexibility will allow you to revisit a role if it suddenly rises in importance or when a skillset grows in demand.

Tips & Best Practices for Keeping Market Rate Data Up to Date

You want to ensure that the compensation choices you make continue to be effective. This requires staying on top of market rates and trends. You’ll need to review your data, pay grades, job descriptions, and benefits accordingly. Let’s discuss the best practices to do so effectively.

Job boards are updated constantly and are possibly the easiest way to see when there are shifts in market trends. Regularly monitoring them will allow you to scope out your competition and see who is willing to pay what for roles that are relevant to your organization.

Job market reports provide a detailed analysis of what is happening with salaries overall in your industry. These are updated regularly and are comprehensive, reliable sources of information. You must leverage them when considering compensation revisions based on market shifts.

Don’t forget to look internally. What are your turnover and retention numbers like? Analyze whether you’re offering compensation packages that your employees expect or desire. Could there be a disconnect in salary or benefit offers that could lead to turnover? This doesn’t mean you need to raise everyone’s salary, but it could mean your competition is doing something differently.

In Conclusion

Understanding market rates will help you offer competitive compensation packages. By leveraging the right online tools and patiently updating your data, you can be confident that you’re making good choices for your organization. Top talent will be more likely to apply and stick around.