How to Decide Which Jobs to Include in Your Compensation Study
In an ever-tightening labor market, employers who want to attract and retain top talent can’t afford to ignore a desire for appropriate and competitive compensation. A recent survey by The QTI Group revealed that compensation was the number one reason employees resigned. However, less than half of employers surveyed regularly review their workers’ pay for market competitiveness. Given competing business priorities, what’s an HR pro to do?
To start, employers can leverage compensation studies to make sure their pay structures are fair, realistic, and competitive in today’s market. Here’s how:
Anatomy of a Good Compensation Study
When determining which jobs to include in your compensation study, start by identifying all of the unique jobs within your company, including the number of people in each job and their pay grade, if utilized, within the organization.Ideally, you want to have at least 70% of your employee population represented.
A compensation study is a tool used to help determine market pay for one or more jobs in an organization using reputable compensation data sources. Employee data can then be compared to the market data to get a sense of competitiveness.
Based on business initiatives, you may need to add or remove jobs from the list before launching a study. The following considerations may help you refine your focus:
|+Reasons for Adding Jobs||-Reasons for Removing Jobs|
They’re critical to your business.
They are part of broader initiatives.
Their grade level is not sufficiently represented.
They have high turnover.
They’re well represented.
They are similar to other jobs that are already included.
Their roles are unique to your company.
They never stay open for long.
What’s an HR pro to do?
Every compensation study can and should be unique. However, there are a few essential steps that can be applied across the board to ensure your study will yield actionable insights for your business:
- Inventory all job types, noting those that are highly unique to your business
- Revise your list based on representation, priorities, and other relevant considerations
- Evaluate your sample and compare with multiple reputable benchmarks
- Review findings with stakeholders to determine if compensation updates are necessary
Need a hand or a second opinion? We can help you perform an effective compensation study. Contact us.