Most employers in New York City are now required to list the salary range on job ads thanks to new legislation that was introduced on November 1. New Yorkers join professionals in Colorado and California (and more states are expected to follow suit) in benefiting from regulated pay transparency. Compensation has always been an important driver for jobseekers and pay transparency will make it easier for them to consider their options.
4 reasons why organizations should conduct compensation benchmarking
#1. Talent leaders can better align HR costs with overall business goals.
Communicating the criteria for various pay levels to potential employees upfront can help to reduce spending on talent retention further down the road as candidates will have an idea of what to expect during their tenure. This also has the obvious benefit of allowing talent leaders to better align their costs with their company’s overall budget.
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#2. It can boost productivity.
When employees feel they are compensated fairly, they are typically more productive and are less likely to seek employment elsewhere. Many employees share their compensation via review sites to help would-be employees. If the salaries posted don’t accurately reflect certain job roles, it could cause resentment among employees. For example, if a team member finds out someone with less experience than them is on a higher salary, it’s going to make them feel devalued, which in turn, could lead to decreased productivity and increased attrition rates.
#3 Compensation benchmarking can help organizations ensure they have pay equity.
Compensation benchmarking can help talent leaders conduct accurate pay audits, both on an internal and external basis. It can help to identify operational gaps that led to salary discrepancies in the first place. To truly remedy pay inequities, job classifications must be evaluated regularly. Professionals won’t hesitate to voice their concerns about pay inequity, which could cause reputational damage, so talent leaders need to take action before this occurs.
#4 Companies can make competitive offers if they know what their competitors are offering.
The jobs market is more competitive than it’s ever been. And although the Great Resignation is starting to level off, it’s still very much a candidate-driven market out there. Organizations that want to attract top talent must offer competitive compensation and total rewards packages. If talent leaders know what their competitors are offering, it means they can make a more competitive offer from the outset, which will speed up time-to-hire as it will reduce the time spent negotiating salaries.
Real-time compensation benchmarking
Talent leaders must prioritize developing competitive compensation and total reward offers in what is a rapidly changing market. Being able to look at how your job descriptions and pay ranges compare to similar jobs in other organizations really can be the differentiator your company needs when attracting and retaining talent.
Learn more about how Claro Analytics can help you with compensation benchmarking.