For small-to-midsize organizations, it can be incredibly challenging to design pay plans that are robust enough to attract the right workforce to support your business strategy at an affordable price. However, the right research and preparation will help ensure your compensation strategy is in step with your industry in spite of your budget constraints.
Overall, compensation data can make sure your pay strategy is competitive, even if you are searching for information on just a few positions. Yet, keep in mind there are specific ways to maximize your investment in survey data:1. Understand what data coverage you need.
As you begin the compensation planning journey, assess your data needs. Make certain that anything you purchase meets your specific requirements to help keep your costs — and effort — low.
- What are the current talent issues most pressing to your organization or industry? (Consider attraction, retention, cost control, union/works councils and so on.)
- What are your current reward philosophy and strategies? Do you have any? Have they been effective in the past or do they need reshaping?
Gaining a solid business context will help you identify the most relevant data for your needs as well as recommendations applicable to your business.2. Determine your benchmark jobs.
One of the most challenging aspects of determining employee compensation is categorizing your positions so that you can compare your compensation with that of your competitors. A simple benchmarking lets you establish anchor points that represent the depth and breadth of the positions across your organization.
For example, some common benchmarks for deciding pay include:
- Chief executive officer
- Operations manager
- Marketing assistant
3. Define talent market criteria.
A talent market is where you compete for, recruit and potentially lose employees. You may not have time to fully understand each talent market in which you compete, so you might just need a snapshot.
Talent markets to consider are:
- Geographic area
- Worker classification (full time versus part time, exempt versus nonexempt)
The more specific you can be about each talent market, the easier it will be to discern pay practices or rates that are comparable.4. Compare quality.
Once you understand what data you need, your job benchmarks and the criteria you wish to compare against, you can compare the quality of the offerings from various data vendors.
Some things to consider when choosing a compensation data source:
- Reliability: Is there a strong process for gathering and cleaning the data? Is it submitted by compensation/HR professionals?
- Robustness/Sample size: Are there enough relevant companies and data reported?
- Pay elements: Does the survey include the data elements you need (e.g., base pay, total cash, long-term incentives, total direct compensation)?
- Simple to understand: Is the report format easy to understand, and do job descriptions match what you need to present to your managers?
5. Find the right product.
In addition to evaluating available research, it’s important to compare vendor products. Here are some things to consider when choosing a product:
- Is the product quick and easy to use?
- Is data interpretation advice offered to clients?
- Does the total cost seem fair, relative to the perceived value?
What’s the next step?
As an HR leader in a small organization, you are likely to know most, if not all, of your people and their needs. Pay is a complex and highly sensitive topic. Getting it right is hard. The time required to submit your data into a compensation survey can be overwhelming if it is an unfamiliar process to you.
We can help. Our Benchmark Select Reports are designed to help organizations like yours obtain data for common positions without the need to participate in a compensation survey. The reports provide data that support your assessments of pay against the market for each of your roles to enable you to attract — and, most important, retain — your top talent.
This blog was originally published on the Willis Towers Watson Wire, June 25, 2019. This article was adapted from a previously published blog post by Willis Towers Watson, focused on larger organizations. Our expertise can be adapted to address your specific challenges, regardless of the size of your employee population.
Hatti Johansson, Global Innovation and Product Development Leader
Hatti is a Senior Director in the Talent & Rewards business of Willis Towers Watson. She is responsible for global innovation and product development vision and strategy for Rewards data products and solutions, and is always looking for creative ways to bring value to our clients through new or enhanced products that address their data questions.