We know that the costs of living and of running a business are spiralling. Add to that current challenges in finding quality candidates for vacant roles and many employers are feeling stuck between a rock and a hard place. So what can be done to manage the rising costs we are all experiencing while keeping your team engaged and productive?
Recruitment and Retention
Costs of recruitment are often high so consider where you find your candidates and whether you can reduce costs in this way. Hanging on to your existing team is a sure-fire way of reducing recruitment costs and the impacts of a loss of productivity a vacancy and new team member may bring.
Use your personal networks and / or social media to publicise your vacancies, rather than using paid ads.
Invest in Training and Development for your team to ‘grow your own’ pipeline of job ready internal candidates. This is likely to have a marked impact on both candidate attraction and retention as career development is one of the key factors employees join organisations.
Be open about the salary you are paying for the role. There is increasing evidence that this is beneficial to both the employer and the candidate.
If you have moved to hybrid working or WFA, planned carefully this can lead to a reduced need for as much office space. Consider downsizing if you can.
If your team are working remotely, think about transferring to VOIP phone systems (which will be a requirement in 2025 anyway) to make savings on mobile phones.
Evaluate your Employee Value Proposition (EVP). By this we mean, the value your candidates and your team get from their employment with you. Setting yourself apart from your competition in this way can make a huge difference in the volume and quality of applications for your role. Your EVP can include pay and benefits, career progression, company culture, mental health first aiders, financial planning and more. Is your EVP clear, fair, attractive and competitive?
Benchmarking pay and benefits
One way to be sure that your pay and benefits are competitive is to carry out benchmarking around your roles.
Pay benchmarking is a process of collecting data on the pay and benefits for similar jobs in other organisations to establish their ‘market rate’. Benchmarking salary is important. This helps you offer a fair and competitive salary, which is vital for attracting and retaining a great team.
It can sound complex and onerous, but can be fairly straightforward if you know how to go about it.
One point to be mindful of is the need to be sure that pay rates are both internally equitable and externally competitive. For example, where a job needs a higher salary in the external market which is over the salary that can be justified by an internal job evaluation exercise. There are ways of overcoming this, for example to topping up earnings through temporary market supplements or ‘golden hellos’.
Crowdsourced pay data
The easiest, but least scientific way to quickly check salaries for any given role, is to use a crowdsourced data. Online job boards often run these tools, which gather salary from multiple open or historic vacancies, to provide you with an average salary for any particular role.
There are many of these tools available, but here are two to get you started:
Glassdoor is first on our list because it doesn’t simply rely on salaries detailed in job adverts. It includes crowdsourced data from employees who are actually working the jobs right now. They anonymously report their role, location and salary, which is factored into Glassdoor’s calculations.
Totaljobs allows you to compare average salaries for any job or industry within any location in the UK. You will need to enter your job title and location to find the average salary plus the highest and lowest salaries for that position based on recent jobs adverts on the website.
The drawback of these methods, however, is that job titles can mean a whole host of different things across difference organisations, and you may not be comparing apples with apples. Hence we recommend job evaluation….
Job evaluation for pay comparisons
Job evaluation is a way of systematically mapping out the importance of different jobs in relation to each other. This overcomes the problems of job titles being inconsistent or misleading, and so allows you to make comparisons on market rate regardless between similar sized roles. Ultimately this provides for a fair, transparent system that can be effectively communicated and understood by employees.
If you have undertaken a job evaluation exercise then you will be able to determine pay grades in a pay structure and compare pay rates against the internal or external job market. There are several ways of evaluating jobs; we currently use a system which ranks roles across 9 grades or levels for market comparison – and also allows us access to market salary data, filtering on numerous factors including sector, role, geography and size of the organisation.
We would always advocate using some form of job evaluation, not just for external benchmarking purposes, but because the evaluation can remove unconscious bias around reward decisions, increasing pay equality and reducing the gender pay gap.
Closing the loop back to recruitment and retention here; the fact that you are mindful of these factors and working to ensure a transparent job evaluation system, with benchmarked pay and benefits, is a big win for your Employee Value Proposition. Candidates are more likely to apply to a company which approaches pay and benefits in a transparent, consistent and equitable manner over those who don’t.
Do let us know if you’d like to tap into this expertise – we would be happy to help.
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