Salary Benchmarking Is a Vital Tool When Hiring Employees
What is Salary Benchmarking?
Salary benchmarking, or compensation benchmarking as it is also called, is the process by which internal job descriptions are matched to external jobs with similar responsibilities, to identify the market rate for each position. When creating a new position complete with job responsibilities and a corresponding salary, it is vital for those working in human resources to perform these salary assessments and market comparisons efficiently and accurately. Many factors such as geographic location, company size, and education level factor in to the final salary, and all must be considered before filling the position.
Why is Salary Benchmarking So Important?
Before hiring employees, you first need to build a foundation. And if that foundation is rotten, then you've already set yourself up for failure. If done incorrectly or haphazardly using bad market salary data, you could have a hard time attracting the best candidates, or risk looking foolish by advertising a position with a salary range completely out of whack with the rest of the market. Even if you hire someone and the salary benchmarking mistake is later discovered, any adjustment (especially downward) could create employee dissatisfaction, poor employee engagement, and end with higher turnover costs when that employee ultimately has to be replaced. This makes salary benchmarking a vital part of the hiring process.
What Tools Can Help with Salary Benchmarking?
Sure you could do all of the market research and aggregation yourself, but you're busy trying to start, build, and/or run a business. To save you time, use a tool that does it all for you. Something like the IBM Kenexa CompAnalyst Market Data for US on Cloud provides on-demand access to compensation data that allows you to benchmark jobs easier, using a single, web-based tool. Save time on the market pricing process with a robust database of 100-percent human resources-reported market data, analyzed and updated monthly by Certified Compensation Professionals.