Despite the abundance of candidates on the job market today, hiring managers may still find it challenging to consistently attract high potential candidates. These are the elusive candidates who have outstanding credentials, stable work histories, and a drive and determination that far exceeds that of their peers.
To help lure in these hard-to-reach candidates, who are often passively networking their way to better careers, one must think further outside the box. This is where salary benchmarking comes into play.
What is salary benchmarking?
Salary benchmarking is a common practice whereby human resource teams evaluate and analyze the salary ranges for their most in-demand assignments. Here is a little history lesson:
When benchmarking was introduced in the 1990s by Xerox Corporation to measure business performance, this data was used to develop enhanced programs to advance and make the company more competitive. By the way, Xerox remains the “world’s leading enterprise for business process and document management” due to their commitment to business excellence and total quality management.
This same method works well today for other companies, even while the job market ebbs and flows. Salary benchmarking takes it a step further, by developing ways to improve recruitment and onboarding processes, and the overall performance metrics of candidates. By promoting this data and how it relates to the quality of each compensation plan, any business can use this to demonstrate that they are a preferred employer. It can also help predict the future success of recruitment and business growth with a clear, black and white report on the company compensation standards.
Can salary benchmarking attract top talent?
Candidates who are high performers tend to flock to the more progressive companies that can offer them more than just a salary – they want real career growth and advancement opportunities. Benchmarking can be a marketing tool for educating candidates. It also sets the standards for employee performance, preparing candidates for success early on in their roles.
How does this work?
Simply put, high performance candidates are wise to the pay rates that the competition are paying their employees. They are shopping around for companies who take the time to stay current with industry salary ranges, and they pass on the companies who don’t.
There is a clear advantage to participating in ongoing, at least annual, salary benchmark planning for your critical assignments. Using a salary benchmarking process, facilitated with an application designed for this purpose, can benefit short and long-term business objectives.
How salary benchmarking supports business recruitment goals
As a whole, benchmarking salary is an effort that can identify any gaps in compensation and help a company remain competitive in any industry. Eliminating recruitment shortfalls and improving benchmarks supports more strategic staffing and employee succession planning. Having a plan of action is what salary benchmarking does to ensure the survival of the business.
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For more information about salary benchmarking, you are invited to request the exclusive Payscale guide How to Perform Compensation Benchmarking and Set Salary Ranges today!