I recently worked with a 30-person information-technology firm based here in central Illinois to benchmark its compensation and time off package. Working on this project and needing to strike the right notes from a compensation perspective had me humming songs about money, like the Donna Summer classic, "She Works Hard for the Money." Just for fun, I wove some of the other money-related song references through this article. Enjoy.
At the start of the project, the firm was just emerging from a year-long slump in profits and knew its people were overdue for meaningful pay increases. However, even though the bottom line was improving, the business couldn't afford to overdo it. This company had long participated in the Great Places to Work survey, and although it scored well in areas such as culture, manager relationships and work-life balance, leaders knew from reviewing survey results that employees had money on their minds.
If your organization is looking at pay adjustments, here are some tips to help you avoid overpaying, underpaying or losing top talent to companies who know that money talks.
Use fresh, reliable data: Market conditions shift fast. Make sure you're using up-to-date, industry-relevant compensation surveys or platforms.
Play the market: In addition to looking at compensation survey data, search for comparable jobs in your area; it's important to know what money-making opportunities your staff will see if they hop on Indeed.
Compare like for like: Go beyond titles – be a gold digger and dig into responsibilities, level and geography. A marketing manager in New York is not the same as one in Springfield. For that matter, no two Springfields are even alike.
Balance external data with internal equity: Sure, it's only money, but fairness within your team matters just as much as competitiveness outside it. Benchmarking should support pay equity, not undermine it.
Understand the position's value: Benchmarking isn't just a numbers game – it's a strategy discussion. Know which job titles are your money makers, and if you had $1 million, know where you would adjust your price tag for your positions accordingly. Companies also don't want to give away money for nothing to lower-value positions that don't directly impact the bottom line or customer satisfaction.
Consider the total picture: Base pay isn't the only thing employees value. Time is money too, and you can adjust other compensation levers such as paid time of and bonuses, as well as health plan and retirement plan contributions.
Update regularly: Set a schedule – annually or biannually – to revisit compensation and adjust as needed. Pay expectations evolve quickly, especially in high-growth sectors where in-demand employees wanna be rich.
So how did things turn out for the IT firm? We benchmarked base pay using two different data sources and found comparable jobs posted on Indeed and LinkedIn. Using that data, we established minimum, maximum and mid-point pay bands for each position. Then, with stakeholder input, we prioritized the most high-value positions and those with the largest pay gaps. We established a plan for the adjustments, with proper messaging and timing. Employees also received a total compensation statement, reminding them of the complete value of their pay and benefits package. While the employees knew that it wasn't easy money, they were very appreciative that they just got paid. The company's Great Places to Work survey will launch in a few weeks, and the managers are expecting top scores.
Sure, money can't buy me love, but getting compensation right will help your business attract top talent and keep them happy, too. Transparency, fairness and competitiveness go hand in hand. If you haven't reviewed your compensation strategy recently, maybe now's the time to shake your money maker and review your company's pay and benefits.
