3 Ways Salary Benchmarking Can Improve Your Talent Strategy in 2021

Amid this global pandemic, organizations across India are growing, transforming and quickly adapting to changes. Business leaders and HRs who are embracing transformations and taking advantage of these opportunities will, undoubtedly, succeed in the coming times.

We all know that talent is one of the most important elements to create a successful as well as sustainable workforce. But, COVID has dramatically impacted the human resources ecosystem, making all interactions digital in the absence of interviews, assessments or one-on-one meetings. In this scenario, companies should take corrective actions to ensure promising outcomes to acquire top talent in any industry.

Salary is one of the most critical factors in the people strategy of any company and something that HR managers must focus on right now. At times like these, salary benchmarking can prove to be an efficient way to stay on top of the talent acquisition game. Of late, businesses in India have experimented several new things and most of them have given desired outcomes. One such experiment was implementing payroll management software. At first, people were hesitant about payroll automation but slowly business leaders made peace with the fact that it is the best way to make the payroll process fast, accurate and efficient. Likewise, salary benchmarking can also be made normal if people implement it in the right way.

In this blog, we will tell you the top three benefits that Salary Benchmarking can provide to your company, particularly in such difficult times.

Improves The Scope of Recruitment

Salary benchmarking can help a company to widen its hiring perspective. That means when HRs find themselves in a tight talent market, they will have an opportunity to find relevant talents in other industries. If a company is aware of the shortage of skills and the global war for talent, it should not hesitate to consider people who have potential but do not have the industry experience mentioned in their job description. Also, a competitive pay framework can aid organizations to attract and retain the best talent to acquire an edge over competitors.

Boosts The Overall Performance

Every business, be it small or large, prioritizes employee engagement at every stage. This is the major reason why more and more companies are investing in HR and payroll management software lately as such systems make sure an effective compensation policy and maintain employee engagement. Need to mention, salary benchmarking can also improve employee engagement. It gives insights into other variable components such as incentives, commissions, bonuses, profit sharing and stock options. Understanding these elements carefully can reveal insights into the structures and quantum of variable pay that can result in a mean shift in the team’s performance. When companies will get a clear picture of existing competitors and the market, they can understand where they are lacking and take preventive actions to excel.

Enhances Internal communication

As mentioned earlier, the external salary benchmark can give HRs and employers the insights they require to decide the right salary increments. This will eventually aid them to have more transparent and meaningful conversations with employees during annual appraisal meetings. According to a recent study, just 30 percent of employees are completely satisfied with the decisions related to salary increments. Now, when companies take steps to make sure transparency as well as fairness through the compensation benchmarking exercise, HR managers can interact more proactively and positively with their employees. Besides, this will also help companies to tackle a number of long-term retention risks before it becomes a bigger business challenge.

So, these are the top three benefits of salary benchmarking.

Remember, every company is responsible and accountable when it comes to employee benefits and compensation. Now, if you conduct a compensation benchmarking exercise, make sure that you are acquiring the right data.

Believe us, just like HR and payroll management software is helping hundreds of companies today, the Salary Benchmarking exercise can also pivot a company’s Talent Strategy in 2021 and beyond.