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Want to Build a Great Employer Brand? Focus on Your Pay Brand First

A little while ago, I read the article “7 Reasons to Prioritize Employer Branding This Year” and I thought it did a great job explaining why HR leaders should be intentional in crafting their employer brand.

The article defined your employer brand as your reputation among your existing and future employees. This main point here is that building a strong employer brand can help you attract, motivate and retain the best employees, while creating the internal alignment necessary to be a high performing organization.

However, I thought that there’s a few important things the article didn’t touch on, such as: what influences an employer brand? What specific steps should an organization take to shift its employer brand?

In this article, I’ll try to answer these questions. I argue that if you want to build a great employer brand, you have to get your pay brand right first.

Defining the Term “Pay Brand”

“It’s pretty generous,” “the pay’s low,” “I have no idea if I am paid well or not”…

When your employees are asked the question, “How are the pay and benefits at your company?by a potential applicant, do you know what they would say? And if the response is negative, how much do you think this impacts your talent acquisition and retention?

Your pay brand is the way your existing and future employees feel about the pay and the rewards at your organization. Your pay brand is not only shaped by the way you pay (including how much and why), but also by how you talk about pay with employees.

In fact, the communication piece may matter even more than pay itself. If you acknowledge the value employees bring to your organization — by compensating them appropriately and clearly communicating your pay practices — this will set you apart in the eyes of your employees. But if you don’t talk about your pay practices, employees will put you in the penalty box where they either believe that you don’t pay well, don’t pay fairly, or they have to guess because you haven’t made it clear by your actions.

Not convinced that having a strong pay brand can make or break your company? Here are five benefits to having a well-articulated pay brand.

1. Increase the quality of your candidate pool

When job-seekers believe that your organization values people and pay them well, you’ll attract more qualified applicants. In fact, data show that a strong employer brand leads to 50 percent more qualified applicants. Additionally, a strong pay brand will make existing employees feel more comfortable convincing their network to apply for open positions. With more qualified applications, recruiting teams can spend less money and time filling roles.

2. Improve retention

Your pay brand also impacts retention: If employees feel like they’re getting a “good deal” from your organization, they are far less likely to quit because of compensation.

3. Create alignment within all levels of your organization

To define your pay brand, you’ll need to get all of your executives and managers on the same page about your compensation philosophy and strategy. This is a great opportunity to determine what you want to reward so that you can ensure that you’re maximizing your compensation dollars to achieve your business objectives.

4. Unite employee and employer interest

When employees know what the organization chooses to reward and how they can advance within the organization, they’re far more motivated to do a good job. Additionally, when managers are empowered to reward or incentivize certain behaviors, it’s much easier to motivate their teams.

5. Improve reputation

Having a strong pay brand can also help you attract new prospects and customers. A well-crafted pay brand leads to a positive reputation among the wider business community. In general, organizations want to do business with organizations that value their employees. Case in point: Whole Foods is still getting good PR for making every employee’s salary transparent 30 years after introducing the policy.

So how do you build a pay brand you can boast about?

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It’s the same way you would approach branding in general: know what you want, develop a crisp message, communicate it consistently and reinforce it with supporting evidence. In this case, it means being intentional about how you spend your compensation budget and treating pay as an ongoing dialogue with employees. Here are four tips to help you get started.

1. Be Intentional About Compensation

In PayScale’s latest Compensation Best Practices Report, we found that top-performing organizations are more likely to connect the dots between compensation and culture. They are more likely to have a formal compensation strategy (46 percent vs. 35 percent of typical).

To be intentional, think through these items:

  • Are you referencing market data to make sure you’re paying competitively to the market?
  • Do you pay more for more competitive or tough-to-fill jobs?
  • Do you reward top, average and low performers differently?
  • Are you paying attention to flight-risk employees, such as high performers whose pay is low compared to their market and/or to low-performers in similar jobs?
  • Do you use incentive / bonus pay to shape behavior and outcomes?
  • Do you proactively address inequities due to gender or ethnicity, so that employees perceive that you’re committed to providing fair pay and opportunities to all?

2. Treat Compensation as an Ongoing Dialogue

In this competitive talent market, where employees can easily tap into public data to figure out what they’re worth, smart organizations are evaluating their pay practices frequently and rewarding employees on a timely basis (i.e. monthly, quarterly, at the end of big projects instead of annually).

PayScale’s Compensation Best Practices Report found that top performing organizations consider pay to be an ongoing dialogue with employees, not an annual event that comes and goes. In practice, this means that these organizations do certain things more frequently:

  • Conduct market study — 56 percent of top-performing organizations have completed a market study within the past year vs. 51 percent of typical.
  • Give bonuses and incentive pay — 31 percent of top-performing organizations give bonuses or incentives at least quarterly vs. 28 percent of typical.
  • Obtain market data for individual jobs — 37 percent of top-performing organizations get market data for individual jobs at least monthly vs. 33 percent of typical.
31 percent of top-performing organizations give bonuses or incentives at least quarterly vs. 28 percent of typical.Click To Tweet

3. Empower Your Managers and Train Them

Talking about pay can be uncomfortable or downright scary for managers. If you want your managers to have effective conversations with employees, you have to train them.

What sort of training do they need? First, you’ll want to let managers know what you want them to convey to their employees — at the very least, it’s your compensation philosophy and strategy. You’ll want to provide them training on compensation basics, followed by the specifics of your organization’s comp plan. Last but not least, you’ll want to prepare them for “surprise” questions from employees and arm them with the tools and resources to address these effectively.

Here are some resources to help you get started:

Be a First Base Coach to Your Managers for Compensation Conversations

5 Things to Teach Managers About Having Tough Pay Conversations

7 Do’s and Don’ts of Communicating Total Compensation Reports

4. Be More Transparent With Your Pay Practices

Transparent pay practices lead to higher satisfaction and lower intent to leave, according to PayScale’s 2017 study on employee engagement. A study by professors at Cornell and Tel Aviv University suggested that employees work together more effectively when pay is transparent. Meanwhile, another study from Middlebury College found that subjects worked harder and more productively when they were able to compare their own earnings with others’.

Plus, being transparent helps you gain greater control over the company narrative and stay ahead of issues that would otherwise blow up.

We get that you can’t (nor should you) become radically transparent overnight. There’s a whole spectrum of choices organizations can make about how transparent they want to be with pay and pay decisions. If you are ready increase transparency, check out these resources:

7 Tips to Increase Pay Transparency in Your Organization

Q&A: What ‘Audits’ Should We Conduct as We Move Toward Greater Transparency in Pay?

Meeting Your Employees Where They Are When It Comes to Pay Transparency

Readiness Checklist: How Do You Know the Right Level of Pay Transparency for Your Org?

What’s Your Level of Transparency?

We’ll soon launch a new Pay Brand hub that has a lot more resources on how you can craft your pay brand. Please stay tuned.

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Tell Us What You Think

What’s your organization’s pay brand? We want to hear from you. Share your story in the comments or join the conversation on Twitter.

Featured Image: Braden Collum/Unsplash


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