Why your employee retention plan should include salary evaluation 

Higher salaries attract great candidates. But if you offer new recruits more than existing team members, you risk frustrating your employees, and encouraging them to look elsewhere.

A recent survey from CV Library shows that a whopping 63% of UK professionals are dissatisfied with their salaries.

How do you make sure salaries are fair across the board while attracting new recruits? In this article, we’re exploring fair salary evaluation, including salary levelling and salary benchmarking.

Conduct market research

Nobody wants to work for less than the market worth for their skillset, position and industry. 

Knowing the market average will help you negotiate salaries with confidence.  A good recruitment company like Eden Scott will have access to market data that will help with salary benchmarking.

If you're going it alone, you can still access helpful salary insights through reference tools like CV Library's salary guide and LinkedIn's salary tool.

Create a clear compensation strategy 

Creating a graded pay system will make sure that roles that require similar skills, experience and training are equally compensated.

Danielle Monaghan, VP of Global Talent Acquisition at Google, explains: “being fair and equitable goes a long way for employees to feel valued, engaged and retained."

Once you've created your system, the next step is aligning your team’s salaries with your new guidelines. 

A clear compensation strategy will also help you to offer fair pay to prospective candidates. This will allow you to advertise salaries with transparency, meaning prospective employees can choose if the compensation is in line with their expectations. 

Set up regular pay reviews 

"The implementation of a salary review process helps to ensure fairness and transparency at all levels of your company" – Factorial HR

Your team’s duties are likely to change throughout their employment. With regular pay reviews, you can check if employees' salaries match up to their current duties, as well as their performance and contribution to the company.

Consistent reviews can prevent resentment building up within your team, and can discourage employees from looking elsewhere. 

Frequent salary evaluation can also help to even-out pay discrepancies that could exist between new and longer-serving employees. 

Use salary scales 

CIPD suggests using a salary scale for fairness and to avoid pay discrimination. 

Salary scales make it easier to introduce pay progression in line with an employee's development, without the need to secure a promotion. This arrangement means that you can reward staff for the experience they’ve gained at your business while fairly rewarding new staff for the skills they bring to your organisation.


 

Using salary scales can also afford you flexibility in the salaries you offer prospective candidates without causing friction within your team. For example, you might start a new employee on a higher rung within their salary bracket if their current compensation is higher than the starting salary or if your company is experiencing a labour shortage within their skillset.  

Communicate effectively 

A recent report indicated that: "33% of employees said that a lack of honest communication has the most negative impact on employee morale."

Keeping employees informed about the full range of benefits and flexible policies available to them is likely to improve overall satisfaction. Often HR teams or managers can help with this.

Regular communication leads to an open and honest culture where employees feel more valued. 

Final thoughts

By assessing market rate salaries, developing a transparent approach to salaries and regularly reviewing compensation practices, you're much more likely to keep employees motivated and attract suitable candidates to your team. 
 

Next steps

Need help to source exemplary candidates? Learn more about hiring with Eden Scott.