Designing effective remuneration and benefits packages is essential in the recruitment, retention and motivation of staff. External market forces are increasingly influential with skills shortages driving up the 'value' of many jobs in, for example, IT. But how can you tell whether you are pitching your salary packages competitively?
Job grading or evaluation can help you to assess whether basic internal rates are fair. After that, an analysis of your market is essential. You could informally monitor the job ads in your trade, national or local papers or, invest in a sophisticated survey of the market, swapping data with other organisations against which you wish to compare your pay and benefits. You will need to consider such factors as from whom you recruit and/or to whom you lose staff, where the jobs are located, what skill sets your organisation requires. 'Pay' may be difficult to gauge as employers move away from traditional graded pay structures to more flexible systems based more on market-related benchmarking on an individual job basis.
Apart from base pay, consider applying a variable or 'at risk' cash element to the packages you provide. Non-cash perks such as company cars, private medical insurance, pension plans, or even private dental plans or subsidised nursery places may be a valuable addition to the package.