Making Salary Surveys Part of Your Remuneration Strategy
While there has been an increasing trend in the importance of qualitative factors when it comes to employee satisfaction, money still talks and how you compensate your workforce remains a key driver of worker performance and, therefore, the performance of your company. Determining how much to pay who requires not just an understanding of your organisation, its needs and capacity, it also requires knowledge about the market and what your competitors are paying their employees; these insights can be gathered from salary surveys. On the surface knowing what someone working somewhere else earns may not seem particularly useful, but when you dig deeper into the intricacies of human resource management you will find that there are a number of advantages to incorporating salary survey data into your remuneration strategy.
Your company operates in a competitive environment, both in terms of competing for customers and competing for talent. The salaries you offer will have a direct impact on the quality of employees you attract, and an uncompetitive salary structure could leave you with slim pickings and put you at a disadvantage compared to your rivals. As mentioned above, your employees’ performance will determine your organisation’s performance so if your workers are simply not equipped to do the job effectively then your company will see the results of that in its bottom line.
Now given the less than ideal economic situation in most Sub Saharan countries, especially in the midst of a pandemic, some companies with uncompetitive salaries have still managed to attain excellent talent at bargain costs. Unfortunately, unemployment rates are high so some people have found themselves in situations where they have to accept lower salaries than their qualifications, experience and value addition call for; however, it is important to remember that while you may be able to get these high performing employees through the door you may have a difficult time keeping them. Though other factors can contribute to satisfaction and encourage employees to remain with you even when they are getting paid less than they should, offering compensation that is not comparable to other employers may lead to workers jumping at other opportunities resulting in high turnover rates and the costs associated with that, which we discussed in a previous post. Furthermore, even if employees who are dissatisfied with their salaries choose to stay their discontentment will eventually start to show through their work.
Ensuring that you are not under compensating your employees is vital for talent attraction and retention but on the other side of the coin, salary surveys can also help ensure you are not overcompensating staff as well. Of course as employees getting paid more is always the preferred option but as a company whose primary goal is to make profit, this may not result in a favourable outcome. If you can afford to pay your employees above market without it being detrimental to the long-term sustainability of your organisation then by all means do so, however, in some cases decisions about salary levels are made with no references or benchmarks which can lead to unsustainable inflated labour costs. Understanding your market is a key component of your remuneration strategy and will impact your company’s success. As consultants with years of experience working with a range of employers from various industries, Lorimak Africa (a Baker Tilly network member) has gained an in depth understanding of the compensation strategies that companies use and what works best; with this expertise and reliable, reputable and up to date salary surveys you can make sure both your employees and the company are there for the long haul.