When your company adjusts is salary ranges, performing a compensation analysis enables you to make sure pay decisions align with both internal and external considerations, such as market trends and company objectives. Performing a full analysis can be complex, but compensation analysis software can help. Discover the basics of the process and how compensation solutions can guide you through each step below.
Reward Your Top Performers & In-Demand Talent
Many companies offer 2-3% salary increases across the board, but there are a number of issues with this approach. For one, this standard increase doesn’t always reflect market shifts for specialized roles or specific industries. Similarly, this rate won’t always accommodate regional differences. Some jobs are more demand in specific place than others. For instance, while physicians assistants and registered nurses are high-growth, highly-paid careers in states like Alaska and Illinois, software developers are in the greatest demand in South Carolina, Tennessee, and South Dakota, according to MarketWatch.
The key to attracting and retaining your most valuable talent is rewarding these individuals appropriately, and therefore avoiding pay increases at the same rate across the entire workforce. Compensation software can help you isolate your top talent and allocate your budget appropriately so everyone is still paid fairly.
Strike a Balance Between External & Internal Factors
Of course, external factors aren’t all that needs to be considered. You’ll also need to make sure you’re balancing internal and external pay equity. Some organizations use a straight market pricing model to attract and retain employees for competitive positions. In other cases, companies use a market premium in addition to pay ranges to achieve internal equity. While you’ll have to use the approach that works best for your company, be sure to use quality compensation data with job-specific information when conducting your market research. And, always take into consideration factors like your company culture and geographical location. Compensation software can help you make the best pay decisions for multiple locations by accommodating for regional differences.
To learn about COMPview, HRsoft’s award-winning compensation planning and management solutions, click here.