Compensation Matters for Retention

COMPENSATION MATTERS FOR RETENTION

COMPENSATION INSIGHT & SALARY BENCHMARKING

In 2022, we have seen the highest recorded proportion of employees receiving a bonus, regardless of gender, since gender pay gap reporting became mandatory in 2017.

WHICH IS RIGHT FOR YOUR ORGANISATION?

Salary benchmarking is the process of comparing and evaluating the compensation practices of an organisation against relevant market data. Typically, it involves gathering information about salary levels and benefits offered by similar companies or industries in the same geographic region or industry sector. Often this is repurposed information, sold multiple time over to similar clients.

Companies identify retention as the number one reason to have a sound compensation strategy, followed by better hiring and paying for in-demand skills.

WILBURY STRATTON THINKS ABOUT COMPENSATION INFORMATION DIFFERENTLY

Compensation Insight refers to the process of evaluating and comparing the compensation practices and packages within an organisation or across different organisations at the time the information is required. It involves rigorous data gathering through first hand conversations, and assessing various aspects of compensation, such as salary, bonuses, benefits, LTIPS and other forms of remuneration, to ensure fairness, competitiveness, alignment with organisational goals and in many cases to assist in hiring of top external talent and reducing attrition.

RETAIN & ATTRACT THROUGH COMPENSATION AS A KEY COMPETITIVE ADVANTAGE

If you are considering using remuneration as an attraction and retention benefit, Wilbury Stratton recommends Compensation Insight over Salary Benchmarking, here is why:

1. Competitive positioning: Compensation Insight helps organisations determine whether their compensation practices are competitive enough to attract and retaintop talent in their industry.

Employees are more likely to stay with an organisation if they feel they are being fairly compensated, and compensation strategies remuneration incentives are transparent and well communicated.

Analysis of remuneration strategies of individuals in competitors enables organisations to identify any gaps or disparities in compensation and take appropriate steps to address them. It helps ensure that their employees are compensated in a manner that aligns with their skills, experience, and contributions, providing assurance that employees are not an easy target for competitors when recruiting externally.

It doesn’t matter if your compensation system is fair if employees don’t know about it.

2. Attracting top talent: Offering competitive salaries is crucial for attracting high-quality candidates. Gaining insights into prevailing market rates, allowing organisations to set realistic, expected, market and attractive salary ranges that appeal to potential candidates from the outset of the recruitment process. This helps organisations stand out from competitors and increases the chances of attracting qualified individuals – particularly in high demand talent markets.

3. Setting fair and equitable compensation structures: Compensation analysis helps ensure that compensation is based on objective criteria rather than arbitrary decisions or internal biases. By aligning their pay practices with market rates, organisations can reduce pay disparities and promote a culture of fairness and transparency. See more on Pay Gaps here.

Organisational Benefits to Compensation Insight & Analysis through Wilbury Stratton

Compensation strategy development: Our range of Compensation Insight products provides valuable data and insights that can inform an organisation’s overall compensation strategy. It helps organisations understand how their compensation practices compare to industry norms and market trends. This information can be used to make informed decisions about salary adjustments, incentive programs, and other components of the compensation package.

Pay-for-Performance: Evaluating the correlation between compensation and performance to determine if employees are adequately rewarded for their contributions. This analysis helps identify areas where performance-based incentives can be improved or adjusted inline with market rates, and is particularly useful in commercial and front office positions.

Overall, salary benchmarking is a valuable tool for organisations to assess and refine their compensation practices, attract and retain talent, and remain competitive in the job market. It enables organisations to make data-driven decisions about employee compensation, enhancing fairness, and supporting their overall business objectives.

73% of organisations provide some type of variable pay. (e.g., bonuses or incentives), and 55 percent of them come in the form of annual bonuses.

NEXT STEPS

To conduct a compensation analysis, organisations typically gather relevant data on compensation practices and job descriptions in their own organisation. Wilbury Stratton primary method of delivering compensation insight is direct conversations with individuals in seats within target organisations. WS will then use analytical methods like regression analysis, market surveys, and statistical comparisons are often used to derive meaningful insights from the data.

The results of a compensation analysis can inform strategic decisions related to salary adjustments, bonus structures, benefit programs, and overall compensation philosophy within an organisation. It helps organisations maintain a competitive position in the market, attract and retain top talent, motivate employees, and ensure fair and equitable compensation practices.

If compensation insight, analysis and salary benchmarking is a consideration for you, join our clients who have used Wilbury Stratton to provide bespoke compensation insight for their business.