Salary benchmarking is good business practice

When did you last check your team’s salaries against the market? If you answered more than 12 months ago it’s time to conduct a check. When the market heats up, as it has in some areas, employees know that they can move elsewhere if wanting more money is high on their priority list. As a hiring manager, the last thing you want is to lose a top performer or great team member if their reason for leaving is within your control. Taking action before your team want to make a move is just smart business. After all – the best defence is a good offence.

Money isn’t the only reason people leave their jobs – but it is a definite factor. Regularly benchmarking salaries in your team not only prepares you for a conversation with your employee should they approach you for a pay rise, It can also serve as a warning sign if your salaries are below market rate that you might be at risk of losing key team members.

Not every request for a pay rise is unreasonable. If your team member has taken on additional responsibilities, they may feel that a pay rise is justified. Conducting a benchmarking exercise will give you sufficient information to know whether the request is reasonable.

If the current salary is within market rates, you can help your employee to understand that earning a higher salary is usually aligned with greater responsibility and volume of work. You can ask your employee what other tasks they could take on in their current role or what additional skills they are looking to develop that will justify them earning a bigger salary.

At Richard Lloyd we can tell you what a fair and reasonable salary is for all Sydney based accounting roles. Checking job boards will also give you a general sense of what the market is paying for different roles and what roles are in demand.

You may find yourself faced with a reasonable request for a pay rise, but your budget doesn’t allow for significant salary increases. Why not take a look at each employee’s current skill levels and qualifications and look for training gaps where you can potentially provide training or increase responsibility. Learning and development opportunities are a big factor in job satisfaction and can allay salary concerns in the short term.

If however, your employee genuinely feels that they are worth more money than you are prepared to pay, you are likely at an impasse. The reality is that these people will go where the money is. Ultimately you need to ask yourself what value do they really bring to you, your team and the company and what is the potential risk of them going elsewhere.

For further information, please read 3 Steps To Present A Salary Package That Top Accounting Candidates Can’t Refuse.