A common concern for employers is knowing what fair market price for talent. If you want a quick and simple assessment you can check posted job ads and compare your job offering to your competition based on gross earnings. If you are looking at an entry-level position that typically has a high turnover level you can gain enough insight this way. If you are looking at a mid or higher-level job, one that has little turnover, etc., you may want to consider some kind of a compensation study. To gain the best comparison information there are components in compensation that are often overlooked but should be included. A complete compensation package includes factors such as:
- Hourly wage or annual salary – Break an annual salary down to an hourly wage to ensure a true comparison (i.e. some jobs based on 37.5 or 40 hours per week).
- Vacation time – Statutory vacation, non-statutory vacation such as earning an extra day per year of service or starting with more than two weeks, etc.
- Holidays – Statutory holidays, non-statutory holidays such as Thanksgiving Day, Easter Monday, Gold Cup and Saucer or Lobster Carnival Day (PEI), etc.
- Benefits – group insurance, premium cost-sharing, paid for special leaves (many do not require pay under legislation), professional development funding, etc.
- Perks – Gym memberships, company vehicle use, discount prices, group buying power, computer purchase plans, etc.
- Bonuses – Commissions, incentives, profit sharing, Christmas bonus, etc.
You will also want to compare your information to comparators similar in location, labour availability, cost of living rates, industries, sectors, etc. While these are never perfect, they do add validity to your findings.
Other components that can’t be easily translated into dollars but are still important when comparing one employer to another can include working from home arrangements, flexible hours, social corporate responsibly, mileage rates, travel perks, employer-sponsored wellness programs, work environment, filtered water, coffee/tea, etc.
There are so many pieces in compensation that you need to limit what you are comparing before you start. Determine what is essential to know and how you are going to quantify it for easy comparison. The qualitative information, which could include having a well-decorated office area to having an accessible leader who has a coaching style of managing, is great to know but are subjective and difficult to calculate.
Many employers want to be fair to their employees and provide compensation that attracts and maintains the best employees. Paying top dollar for that isn’t always possible, nor is it necessarily desirable. Instead, an employer should know the “going rate” and aim to be competitive. Then the focus can turn to the qualitative pieces that create a positive employer brand and keep employees through loyalty and engagement rather than golden handcuffs.