Are you matching market value with your offer of employment?
Many elements can come into play as part of an offer, from base salary to bonuses, gym memberships, health and travel insurance, home wifi reimbursements and more.
While there has not been enormous pressure on wages in the industry recently, over the past 18 months there has been a shift with greater emphasis weighted towards performance-based incentives.
Historically, companies have been prepared to offer staff an elementary bonus if they have been a satisfactory performer, now they have set the bar higher. If an employee is not hitting their KPIs, a greater portion of the bonus pool goes towards those who have achieved or overachieved their goals.
In conversations with candidates recently it appears Banking & Financial Services firms have hit the mark with the latest round of bonuses.
While more significance is now placed on pay-for-performance, getting the base salary right is still crucial when taking a role to market.
Use of salary guides, FIRG data, internal relativities of your organisation and recommendations from your recruitment partner will ensure you are taking into account extensive salary intelligence when evaluating a role’s remuneration.
If you undervalue compensation you are unlikely to engage the quality of candidate desired, and there are also risks in going too high which leaves little room for growth.
Always make sure you have scope to be flexible down the track with, for example, ad-hoc or fixed term bonuses at certain times if required. This is an important element to have up your sleeve during salary negotiations, especially if you expect the candidate to remain in a role for a good period of time with no room for promotion in the short-to-mid term.
It is also important to position salary correctly, as one of the biggest issues we as consultants face as we near the end of the hiring process is an arm wrestle over the final offer.
Throughout the hiring process salary expectations of both the candidate and employer should have been made clear, and regularly reinforced. Negotiating salary at offer stage is never ideal. If salary expectations are clear throughout the recruitment process, the offer acceptance is more often than not a seamless process.
If a company offers a lower than expected salary there has to be compelling reasons for the candidate to remain engaged in the opportunity.
With top candidates in demand they tend to hold more influence during the final negotiation stages and are comfortable walking away if their expectations are not met; negotiations rarely go further than one round.
What can hiring managers do to level the playing field?
This is where other factors can come into play such as clear career progression, learning and development opportunities, broader industry exposure and the working environment/culture.
In many cases candidates place more emphasis on the above elements, with salary more often than not, ranking 3rd or 4th in importance when evaluating a new opportunity. Reinforcing these value-adds may persuade a candidate to make a move for little or no increase in base salary.
The 2017 Kelly Australia and New Zealand Salary Guide is available now and is an excellent reference point to ensure you are pitching your offer at market value.
You can download a copy of the salary guide here.
Author: Trevor Bradley is Director of Kelly Executive.