Alex Giblin, Senior Recruitment Manager, explores the significance of salary benchmarking in light of economic unpredictability and the mounting challenges confronting the property industry.
What is salary benchmarking?
Salary benchmarking is an exercise of gathering information on pay and benefits from various organisations and allows a business to gage the industry standards for its sector. From here a business can calculate average salaries for specific roles and compare the packages it offers with those offered for the same role by competitors.
Why is it so important?
If you want to attract and retain the best talent, the compensation you offer must be competitive in the marketplace.
- Make hiring easier
Money talks according to research carried out by Opinium earlier this year in the midst of the cost-of-living crisis. Of 2,000 professionals surveyed, 47% were looking for new employment and 39% of those said money was the main motivator; while 28% cited benefits and flexibility for lack of competitiveness within the industry.
Identify a competitive salary bracket early on and consider the wider package you offer as to the industry. A reputation for investing in your talent makes hiring top talent easier and being competitive streamlines the hiring process keeping you ahead of the competition.
- Foster a better culture
Salary benchmarking allows businesses to understand what fair and attractive salaries/packages are. A perception of unfairness in the distribution of rewards is a common cause of voluntary resignations so ensuring you regularly assess your decision-making processes is key. How well aligned is pay progression and career development to your business and employees’ needs? Naturally, a culture of appreciation for your staff feeds improved efficiency and productivity.
- Improve retention
A key issue facing UK businesses today is employee retention with turnover rates having increased by 7.7 percent in the past four years according to new research by Remote, and turnover can become especially problematic where skills are scarce and vacancies, hard-to-fill. The ARMA & IRPM (TPI) Wellbeing Survey 2023 highlights, on average, 20% of roles in the residential management sector remained vacant throughout the year.
Echoing the above, CIPD’s latest Labour Market Outlook highlights as with previous quarters, many employers have had to raise wages (44%) and increase the duties of existing staff (35%) in the past six months, again evident in the residential sector with workload proving the largest source of pressure as per TPI’s Wellbeing Survey. What’s more, a staggering 58% of the Capital’s employers have made counteroffers in the past year. Critically, these concerns can be avoided where employees are compensated fairly from the outset, and the wider package considered. We see all too often how counteroffers are only valuable as a short-term option.
Key Takeaways
The economic downturn and life post-Covid has seen workers rethink their work/life arrangements and motivators making it more important than ever to keep abreast of market demand and the latest trends.
Compensation policies must be fair, consistent and transparent; effectively communicated and understood. Build trust, ensure your team feels valued, boost motivation and watch business performance improve.
If you’re looking to promote or hire and would like more guidance on salary benchmarking and compensation, our team would love to help. See www.abbatt.co.uk or call 020 7430 0088 to find out more.
