regularly participating in salary surveys

WHY REGULARLY PARTICIPATING IN SALARY SURVEYS IS VITAL FOR YOUR ORGANIZATION

Written by Kai Donesa on . Posted in Resources.

Setting competitive pay is not a guessing game—it is a strategy. But without up-to-date labor market data, you risk underpaying or overpaying talent, breeding resentment, or draining resources.  

Salary surveys are your guideposts. These tools unveil market trends, helping you set fair and informed compensation that attracts top talent, boosts morale, and builds a stellar employer brand. Regularly participating in salary surveys gives you a bird’s-eye view of the labor market—a broader perspective to make informed pay decisions. 

Invest in fairness and data-driven pay practices by joining salary surveys every year. Participating annually—even if your organization is not yet due for a salary review—keeps you on top of labor market trends. Taking part every year also allows you to budget accordingly when salaries are due for updating.  

Gain insights into competitive pay practices and secure your place as an employer of choice. This blog post will guide you through the importance of salary surveys and the benefits of regular participation. Let us map your organization’s path to compensation clarity. 

Understanding salary surveys

Before we go into the benefits, let us demystify the concept. 

Salary surveys capture compensation trends across sectors or labor markets. Such surveys collect data on a range of factors—including base salary, bonuses, and benefits—and analyze them to reveal valuable benchmarks for different roles and job grade levels. 

The information gleaned from these surveys is invaluable, as it helps your organization know its standing in the market and make the necessary adjustments to its compensation strategy. 

Regularly participating in salary surveys also ensures your data is always current. It helps you stay in tune with market trends and react promptly to changes. Furthermore, it provides a holistic view of the sector’s compensation landscape, enabling your organization to develop a comprehensive and competitive compensation strategy. 

Using salary surveys effectively 

To effectively use data from salary surveys, take a step back and ask a crucial question: “Who are we as an employer?”. The answer shapes your Employee Value Proposition (EVP) and defines your unique position in the labor market. It encompasses two key aspects: 

  1. Target market composition. Who are your competitors for talent? Identify companies of similar size, industry, and market to serve as relevant comparators in your surveys. 
  1. Target market position. Where do you want to stand in terms of salary competitiveness? Do you aim to be at the market average, attract top talent with higher pay, or be cost-conscious with a lower-than-average position? 

Remember, salary surveys are a compass. They offer valuable data, but your compensation policy drives your decisions. 

  1. Consistent criteria for comparators. Use the same factors to select comparators every time, ensuring accurate and reliable comparisons. 
  1. Finding your sweet spot. Define your target percentile based on your EVP. Do you want to be in the top 10% for attracting high performers, or are you comfortable with the median to control costs?  
  1. EVP alignment. Design your compensation practices to reflect your EVP, offering benefits and pay structures that resonate with your desired talent pool.  
  1. Market-aware adjustments. Stay informed about market trends and competitor offerings revealed by salary surveys. Use this data to make informed adjustments to your compensation package, including base salary, bonuses, and benefits. 

Ultimately, your compensation budget and target market position are the driving forces behind your pay structure. Salary surveys act as a valuable tool to calibrate your offerings, stay competitive, and attract the talent you need. 

Reaping the rewards of regular participation 

Participating in salary surveys is not just a box to check; it is an investment in your organization’s success. Frequently taking part in salary surveys offers a wealth of benefits: 

Competitive benchmarking 

Stay competitive in the labor market by understanding how your compensation stacks up against the best. By regularly participating in salary surveys, you can: 

  • Find any gaps. Once you determine how competitive you want to be in your chosen market position, surveys can help point out areas where your compensation falls short, allowing you to adjust your organization’s strategies. 
  • Know your market position. Understand how your salaries compare to sector averages and market leaders. Are you leading the pack or falling behind? 
  • Stay ahead of the curve. Predict compensation (salary and benefits) trends and proactively adjust your total compensation packages to keep top talent and attract recruits. 

By using the insights from salary surveys, you can ensure your organization remains an attractive employer, allowing you to win the war for talent. 

Equity and fairness 

Regularly taking part in salary surveys helps promote pay equity and fairness. By taking advantage of salary surveys, you can: 

  • Bridge the pay gap. Equity is ensuring you pay for the role and not the person. Eliminate pay discrepancies and ensure internal equity. Use salary survey data rather than the person’s pay history to inform compensation management policies, building a workplace where everyone is rewarded fairly. 
  • Craft a more equitable structure. Use data-driven insights to adjust your salary scale, ensuring fairness and alignment with industry standards. 
  • Build trust and transparency. Open communication and data-backed pay decisions foster a culture of trust and respect, leading to a more positive work environment. 

Investing in salary surveys is an investment in your staff and your organization’s success. By ensuring fair and transparent compensation, you can build a more motivated, engaged, and inclusive workforce, driving positive outcomes for everyone. 

Informed compensation decisions 

Salary surveys, far from being data dumps, can be your secret to building a winning human resources strategy that attracts, retains, and unlocks the full potential of your workforce.  

Joining salary surveys every year can improve your compensation practices by enabling you to look beyond the numbers. While salary is essential, salary surveys can help you assess what employees value—flexible work arrangements, learning and development opportunities, and recognition and reward programs.  

Design compensation packages that go beyond the paycheck. While compensation is the biggest draw, in some markets, having the right benefits can also help keep your competitive edge.   

Salary surveys are a treasure trove of insights and analysis waiting to be unlocked. You can build a compensation strategy that attracts and keeps top talent by harnessing their power. 

Attract and retain top talent 

Attracting and keeping staff needs a data-driven, strategic approach. Gone are the days of generic offers and one-size-fits-all solutions. Organizations must cultivate a compelling employer value proposition that resonates with skilled talent.  

  • Become an employer of choice. Offering competitive salaries and attractive benefits packages, informed by reliable survey data, makes you a magnet for top talent, enhancing your employer brand and reputation.  
  • Tailor your strategies. Use survey insights to understand your target audience’s compensation expectations and tailor your recruitment and retention strategies accordingly.  
  • Predict and prevent turnover. Find potential risks by comparing your packages to what market leaders offer for similar roles. Adjusting based on the latest data can keep your employees engaged and committed. 

Leveraging robust salary surveys is not just a good practice; it is a competitive advantage. Understanding market rates empowers you to craft compelling compensation packages that attract target candidates and ensure internal equity. The result? Increased employee satisfaction, reduced turnover, and a more dynamic workforce. 

From insights to action 

Regular participation in salary surveys empowers you to make informed compensation decisions, attract and retain top talent, and cultivate a healthy, high-performing organization. Do not miss out on this invaluable resource. Birches Group provides labor market data in over 150 countries, and we are here to help. Register for our comprehensive salary surveys today and secure your organization’s future success or get in touch with us to learn more. 

Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

fastest-growing economies

FORECASTS TO WATCH: A LOOK AT 2024’S FASTEST-GROWING ECONOMIES

Written by Kai Donesa on . Posted in Resources.

As we look forward to a new year, we are pleased to highlight some of the fastest-growing economies in 2024. This bulletin provides a snapshot of the dynamic global economic landscape, underscoring labor markets that are resilient and highly expected to grow.

Overview of global economic trends

Global economic growth is expected to slow in 2024, but a recession is not likely, says the International Monetary Fund (IMF) in its October 2023 World Economic Outlook. The IMF projects global growth to slow to 2.9%, down from 3% in 2023. This slowdown is due to several factors, including the long-term consequences of the COVID-19 pandemic, the war in Ukraine, and the tightening monetary policy of central banks worldwide.

Emerging markets are expected to continue to outperform advanced economies. The IMF forecasts emerging and developing markets to grow by 4% in 2024, while advanced economies will grow by 1.4%.

The fastest-growing economies

Which countries will see the most growth in 2024? According to the IMF, 20 economies across the Asia Pacific, the Americas, Sub-Saharan Africa, the Middle East, and North Africa top the list.

A map of central and south america.
A map of asia and pacific countries.
A map of sub saharan africa.
A map showing the countries of africa.

Source: International Monetary Fund, World Economic Outlook, October 2023

Many of the fastest-growing economies are in the Asia Pacific and Sub-Saharan Africa. These regions are home to some of the world’s most populous countries, and their economies have expanded rapidly in recent years.

A bar chart showing the number of sales in a year.

A rapidly moving labor market reflects a fast-growing economy. Using data from our most recent Multi-sector Salary Survey, we have found that many of the rapidly growing economies are moving in a positive direction.

Our salary surveys provide valuable market movement data for nearly all the countries listed, making them a comprehensive resource for understanding global labor market trends. This extensive coverage ensures that you have access to information on different nations, allowing you to make informed decisions about hiring and international expansion.

Three economies to watch

The IMF further reports that Sub-Saharan Africa will be the second fastest-growing region in 2024. Growth in this part of the world is projected at 4%, well above the 2.9% global average.

For this bulletin, we will focus on three economies in Sub-Saharan Africa: The Gambia, Ethiopia, and Burundi. We have chosen these markets because they all show significant labor market movement based on our October 2023 salary survey data.

The Gambia

Over 6% GDP growth, declining inflation, and continued recovery in tourism

According to the World Bank’s Third Gambia Economic Update, the Gambia has displayed “remarkable resilience in the face of global economic challenges.” Its economy is expected to grow by 6.2% in 2024, accelerating from 5.6% in 2023.

Several factors drive this outlook, including the continued recovery of tourism and moderating consumer prices. Inflation is expected to decline from 17% in 2023 to 12.3% in 2024 as global commodity prices normalize.

According to World Bank economist Ephrem Niyongabo, the Gambian government must implement policies to accelerate financial inclusion, enhance access to financial services, and support economic growth.

What our salary survey data reveals. Using data from our Multi-Sector Salary Survey, we examined market movement in the Gambia from October 2022 to October 2023.

Salaries for support workers in the West African nation of 2.5 million people increased by an average of 13.6% over the period. On the other hand, professional workers experienced an average market movement of 14.3% over the same period.

Our data shows that the labor market in the Gambia is moving upward, with salaries increasing for both support and professional workers. This is a positive sign, suggesting that organizations are growing and can afford to pay their employees more.

Driving forces of economic growth. Analysts and economists say the Gambia’s growth will pick up in 2024 due to increased activity in all sectors, notably:

  1. Tourism. Tourism in the Gambia has been hit hard by the COVID-19 pandemic but is now on the road to recovery. Fitch Solutions reports that tourist arrivals to the Gambia will be strengthened by improving economic conditions in key markets such as the United Kingdom.
  2. Agriculture. Agriculture is another important sector of the Gambian economy. The World Bank cites improved agricultural production as contributing to Gambia’s growth.
  3. Infrastructure. The World Bank further notes that investments in infrastructure programs such as roads and bridges are also expected to drive growth.

Ethiopia

Above 6% GDP growth, greater political stability, and liberalization efforts

Africa’s second-most populous country has grown by nearly 9% annually over the past decade. The Ethiopian economy is expected to accelerate in 2024, with most analysts predicting GDP growth above 6%. The IMF projects 6.2% growth, slightly higher than the 6.1% rate in 2023. Consumer prices are expected to drop from 29.1% in 2023 to 20.7% in 2024.

Ethiopia’s rebound is driven by several factors, including post-conflict reconstruction, continued progress on reforms, and expected IMF financing worth at least US$2 billion.

What our salary survey data reveals. Upon reviewing the market movement in Ethiopia from October 2022 to October 2023, we saw an average salary movement of 19.1% across job roles. The salary movement for support roles was higher at 20.8%. On the other hand, the salary movement for professional roles saw a slightly lower increase of 17.4%.

Our data suggests that Ethiopia’s job market is strong, and salaries are increasing across roles.

Driving forces of economic growth. What factors support Ethiopia’s accelerated growth in 2024?

  1. Peace and political stability. The Tigray War in the north from 2020 to 2022 substantially impacted lives, livelihoods, and infrastructure. Since then, a peace agreement with Tigray’s regional administration has been a crucial step to elevating investor sentiment, the World Bank notes. The Economist Intelligence Unit adds that a relative improvement in political stability will drive a gradual increase in growth.
  2. Market liberalization and privatization. The African Development Bank states that liberalizing more sectors to unlock foreign investments may boost Ethiopia’s economic outlook. Analysts from Coface and Lloyds Bank describe the opening and modernization of banking, finance, and telecommunications as promising. The government is also pursuing its “Homegrown Economic Reform Agenda 2.0,” a policy mix addressing investment and trade, productivity, and climate resilience.
  3. Agricultural potential. Ethiopia is the fifth-largest coffee producer in the world. Lloyds Bank says agriculture contributes to over a third of Ethiopia’s GDP and employs more than two-thirds of the workforce. Additionally, the authorities have been making sustained efforts to add value to agricultural products and plan to develop agro-industrial parks across the country.

Burundi

6% GDP growth, increased government spending, and improvements in agriculture

Burundi’s economy is projected to grow by 6% in 2024, much higher than the expected growth of 3.3% in 2023. This is driven by government spending and increased earnings from mining and agriculture. Consumer prices are expected to decline to 16.1% from an estimated 20.1% in 2023, as measures to boost farm production and stabilize the exchange rate take effect.

Overall, the outlook for Burundi is positive. However, achieving growth will require the government to address key challenges and implement sound economic policies.

What our monitoring reveals. Our data shows that salaries in Burundi increased by an average of 14.2% from October 2022 to October 2023. Higher salary increases were seen at 16.2% in professional roles. In comparison, lower salary increases were seen at 12.2% in support roles.

Driving forces of economic growth. Burundi is poised for encouraging growth in 2024. Three key drivers are fueling this momentum:

  1. Government spending. An infrastructure shortage is one of the significant constraints to modernizing Burundi’s economy. The government plans to increase spending by about 65% in the 2023–24 fiscal year—particularly on infrastructure—to stimulate economic activity. Coface cites that constructing a new railway line between coastal Tanzania and landlocked Burundi will begin in 2024, making supplying food and exporting minerals easier.
  2. Mining. Burundi has untapped mining potential, which could be a “game-changer for its development,” says the Institute for Security Studies Africa. The East African nation is rich in mineral resources, including nickel, gold, phosphates, and rare earth elements. Yet, since April 2021, the activities of foreign mining firms have been suspended. In June 2023, the government published a new Mining Code to improve the regulatory environment and attract the return of foreign investments in mining.
  3. Agriculture. ISS Africa further predicts that agriculture will have the most significant impact on reducing poverty in the short term. Agriculture is the backbone of Burundi’s economy, accounting for more than 30% of GDP and employing over 85% of the workforce. The World Bank expects agricultural production to pick up in 2024. It also notes that more private sector activity in agriculture is an opportunity for Burundi to increase food production.

How Birches Group’s salary surveys can help you

Strategic insights are crucial for organizations looking to work in emerging markets. Register today for Birches Group’s extensive salary survey database and equip yourself with the most comprehensive and up-to-date compensation and benefits data.

Birches Group provides invaluable insights into salary structures, benefits packages, and market trends in over 150 countries. Using our data, you can make informed decisions, navigate diverse markets, and ensure your human resources strategies align with the ever-changing global environment.

References :

  • African Development Bank. 2023. Burundi Economic Outlook. Accessed December 09, 2023. https://www.afdb.org/en/countries/east-africa/burundi/burundi-economic-outlook.
  • —. 2023. Ethiopia Economic Outlook. Accessed December 08, 2023. https://www.afdb.org/en/countries/east-africa/ethiopia/ethiopia-economic-outlook.
  • —. 2023. Gambia Economic Outlook. Accessed December 07, 2023. https://www.afdb.org/en/countries/west-africa/gambia/gambia-economic-outlook.
  • Coface. 2023. Burundi. August. Accessed December 09, 2023. https://www.coface.com/news-economy-and-insights/business-risk-dashboard/country-risk-files/burundi.
  • —. 2023. Ethiopia. June. Accessed December 08, 2023. https://www.coface.com/news-economy-and-insights/business-risk-dashboard/country-risk-files/ethiopia.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

Unraveling the Complexity: Useful Strategies for Managing Amid Uncertain Times

UNRAVELING THE COMPLEXITY – USEFUL STRATEGIES FOR MANAGING COMPENSATION AMID UNCERTAIN TIMES

Written by Kai Donesa on . Posted in Resources.

Navigating volatility is essential in a world where the only constant is change. Managing amid uncertain times is a necessary skill that demands resilience, agile decision-making, and a shift in perspective.

This blog post provides the mindset, tools, and actionable strategies to help you face labor market challenges head-on and deliver results regardless of the circumstances. We’ll share a roadmap grounded in our years of experience serving clients across emerging markets, with insights you can apply to your organization. Equip yourself with a resource that helps you stay resilient and adapt to the rapid pace of change.

The nature of volatility

Volatility is often used in finance, but its application extends beyond stocks and bonds. In the broader sense, volatility refers to the degree of variation or instability. In the business continuity context, this could mean unforeseen circumstances that disrupt the normal dynamics of the labor market.

Examples of volatility include:

  • Hyperinflation, devaluation, and other economic events
  • Natural disasters, such as earthquakes
  • Periods of unrest, civil war, or armed conflict

The key lies in understanding volatility and learning how to manage it. In this way, you can ensure your organization’s sustainability.

Remember, uncertainty is part of the world we live in. Accepting this is the first step to managing it effectively.

The need for strategic planning in HR

Human resources (HR) plays a crucial role in managing volatility. As the hub for workforce management, HR helps ensure the organization’s stability while adapting to changing circumstances. Your people are your greatest asset, and ensuring staff feel secure and supported is important.

Strategic planning in HR is, thus, essential. Planning involves identifying, managing, and mitigating risks and ensuring the organization has the right tools and policies to address them. Planning allows HR to anticipate and prepare for volatility rather than merely reacting. It’s about thinking ahead.

Strategic planning also fosters a proactive culture within the organization. By actively seeking out and addressing issues, HR can inspire employee confidence, encouraging a sense of security and stability even during uncertain times.

Key strategies and tools to manage volatility

Managing volatility effectively requires both strategic thinking and practical action. Here are a few key strategies and tools that can help you navigate uncertain times with resilience:

Stay updated on news and current events. Knowledge is power. Staying informed about current affairs around the world is essential, particularly during times of uncertainty. We recommend you begin by reading our headline articles, which provide the latest updates on local market conditions.

Monitor labor market movement. In a dynamic global economy, it is crucial to watch for changes in labor markets. This involves keeping a firm pulse using reliable resources, such as our bi-monthly Market Monitor report. Our report draws insights from our diligent monitoring of exchange rate movements of local currencies against the United States dollar, euro, and other major currencies.

We mainly focus on emerging markets, given their inherent volatility and susceptibility to unexpected events. This strategy allows us to provide relevant and insightful data, ensuring you can react to market trends.

Define your Compensation Policy. Another strategy is to define how your organization will remunerate its employees. The Compensation Policy includes the mechanics for paying base salary, cash and in-kind benefits, as well as non-salary and after-service benefits, providing a holistic view of the total compensation structure. The policy builds transparency, setting clear expectations for compensating staff.

Establish your Special Measures Policy. Staff want to rely on you to support them during a crisis. Managers want to be able to make decisions quickly in challenging times. A clear Special Measures Policy addresses these concerns. This policy, designed to supplement your existing Compensation Policy, outlines what the organization will do when certain uncontrollable events—like hyperinflation or a natural disaster—occur and monitoring the labor market is no longer sufficient.

Get in touch with consultants and other employers. No organization is an island. Reach out to consultants and other employers for insights and collaboration. It’s crucial to foster a shared understanding of labor market trends and devise responses to market volatility.

Additionally, engaging with an HR consultancy like Birches Group can help you gain valuable insights into the intricacies of HR management. Open dialogues with industry peers can offer a diverse perspective on handling workforce challenges, helping your organization thrive amidst uncertain times.

Case Study: Effective HR Management in Times of Volatility

To illustrate how you can apply these tools and strategies in a real-world context, let’s look at a case study: a global public health initiative operating in markets where economic conditions can become unsettled due to a range of factors. During such situations, the Initiative recognizes the need to support its staff in facing hardships related to volatility.

The Initiative has tapped the expertise of Birches Group in designing a Special Measures Policy to address the challenges posed by market instability and to ensure the continuity of its operations while upholding its core principles. The policy is driven by key objectives such as business continuity, staff assistance, and competitiveness.

Birches Group designed a Special Measures Policy that covers the following:

  • The conditions that will trigger the start of the policy,
  • The measures that will be applied, and
  • The level of coordination involved in conducting the policy.

The policy provided the Initiative with a systematic approach to responding to instabilities in local markets. Establishing such a policy also allowed the Initiative to take the lead in helping staff amid uncertainty while being mindful of actions taken in the market.

The Initiative has taken a proactive approach to implementing special measures when necessary. The organization checks market conditions, assesses the impact on its staff, and considers the broader economic context.

Being proactive amidst uncertain times

In the face of volatility, be proactive rather than reactive. This involves anticipating changes, planning for various scenarios, and continually striving for improvement. It’s about taking charge of the situation rather than simply reacting.

Remember, being proactive means being ready for whatever comes your way. By applying our recommended tools and strategies, you can confidently navigate uncertain times and ensure your organization’s sustainability in the face of volatility.

How Birches Group can help you manage volatility

At Birches Group, we understand the challenges of managing volatility and are here to help. We offer various HR services and tools to help you navigate uncertain times effectively. Whether through sharing guides and resources or designing your organization’s Compensation or Special Measures policy, we can support you in navigating volatility successfully.

As a global HR consultancy, Birches Group offers tools and strategies to manage volatility effectively. Our team of experienced consultants can help you understand the nature of volatility and develop appropriate policies.

Does your organization need guidance in managing staff amid uncertain times? Contact us today.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.

Follow us on LinkedIn for more content on pay management and HR solutions.

understanding the difference between recognition and reward

UNDERSTANDING THE DIFFERENCE BETWEEN RECOGNIZING AND REWARDING YOUR PEOPLE

Written by Kai Donesa on . Posted in Resources.

When was the last time you acknowledged your people for a job well done?

It’s easy to get caught up in the daily grind and forget to recognize the efforts of those around us. As leaders and managers, it’s crucial to understand the difference between recognizing and rewarding the hard work of our staff.

While recognition and reward are essential in motivating and encouraging employees, they are vastly different. Each word carries varying connotations and outcomes. Recognition is about acknowledging staff for improving at their jobs, while reward is about commending individual staff for their exceptional performance and achievements.

Knowing the difference between both strategies can transform your workplace dynamics. In this blog post, we will explore the nuances between recognizing and rewarding staff and how you can strike a balance to create a culture of appreciation and excellence in your organization.

Why you must distinguish between reward and recognition

Recognizing and rewarding staff are two distinct concepts often misunderstood and used interchangeably. Distinguishing between the two is critical because it informs how your organization appreciates and incentivizes its people. At the same time, recognition and reward complement each other in creating a balanced and positive workplace culture.

A common mistake in organizations is using recognition and reward synonymously. However, this mindset can lead to a skewed view of what motivates staff. Recognition and reward have different impacts, and implementing a balanced approach can significantly improve your human resources strategies.

Understanding recognition

At work, recognition can be a powerful motivator. Recognizing the growth in your people’s skills and knowledge boosts their morale and promotes a positive work culture. It’s an often-overlooked gesture that can significantly affect job satisfaction. When staff members feel valued and appreciated, they are more likely to put in their best effort.

The role of employee recognition in fostering a motivated, satisfied, and high-performing workforce cannot be overstated. As we better understand what recognition focuses on, remember that each point holds unique value in shaping an employee’s job progression.

Valuing knowledge. The knowledge and expertise of your people are the driving forces behind your organization’s innovation, problem-solving, and decision-making. Recognizing and appreciating the depth and breadth of your staff’s knowledge can foster a culture of learning and growth. It encourages employees to continue expanding their knowledge base, contributing to their personal and professional development.

Appreciating skills growth. Skills are the practical application of knowledge. They are tools that enable staff to work effectively. Recognizing the skills of your people, from technical prowess to interpersonal abilities, is important. By acknowledging the growth in your staff’s skill sets, you confirm their value to the organization.

Recognizing capacity. Capacity refers to a person’s ability to meet the demands of the job. Recognizing an employee’s capacity is acknowledging their potential and ability to take on challenges. You trust their abilities and are confident in their growth potential. This recognition can empower staff to push them beyond their limits and strive for achievement.

Focusing on professional development. Professional development is important in an employee’s career progression. Recognizing your staff’s commitment to continuous learning and improvement shows you value their drive to better themselves.

Managing fair and objective pay increases. When your staff feel that their hard work and dedication are recognized with appropriate compensation, it boosts their morale. Additionally, fair pay increases demonstrate that your organization values and appreciates their contributions, encouraging staff to continue improving their skills and knowledge.

Recognizing and appreciating employees’ efforts creates a positive work environment where everyone feels valued. The Birches Group approach to recognizing employees is rooted in skills growth. Managers and staff members collaborate and have equal ownership of measuring and growing their skills. Providing your people with a framework that objectively measures and recognizes their skills growth, you enable the following opportunities:

  • Your managers and staff provide input on the pace of their growth
  • Your people are recognized and compensated as they become better at their jobs.

Understanding reward

Reward is integral to an organization’s approach to managing people. Most organizations tend to link reward to high-achieving, outstanding employees. However, at Birches Group, we also reward a majority of the staff who meet the expectations of their jobs.

So, what differentiates reward from recognition?

Recognizing results. Reward is often tied to specific outcomes or achievements, such as exceeding targets or completing a project successfully. It is a way to acknowledge and celebrate the results that staff members have delivered. Recognizing staff accomplishments reinforces the importance of their contributions and motivates them to perform at their best.

Acknowledging impact. Whether it’s through ideas, client service, or an ability to solve complex problems, the impact of one’s work is felt throughout the organization. Rewarding this impact is a powerful way to show staff that their job matters and makes a difference. By focusing on output, your organization can encourage employees to think creatively. More importantly, focusing on getting things done gives your staff the flexibility to try different paths to achieving their output.

Highlighting critical incidents. Critical incidents are situations that require immediate attention and exceptional handling. When your staff successfully navigates these challenging situations, it’s important to recognize their quick thinking and problem-solving skills. This will boost their confidence and motivate them to manage future incidents with the same level of competence.

Celebrating achievements. Achievements deserve credit and kudos. By celebrating your staff’s achievements, you acknowledge their efforts and foster a sense of pride in their work. When you take time to celebrate individual or team accomplishments, it also encourages a spirit of camaraderie and communal success.

Offering bonuses. Bonuses are a tangible way of rewarding exceptional performance. They show your employees that you notice and appreciate their hard work. Offering bonuses as a form of recognition can incentivize employees to continue performing at a high level.

recognizing the difference of recognition and reward

Why your organization should both recognize and reward staff

A successful organization is like a well-oiled machine, with each part playing a role in supporting smooth operations. Employees are the most vital, powering the machine with their skills, dedication, and creativity. Thus, organizations must not only recognize but also reward staff.

As discussed earlier, recognition is a powerful tool that can significantly increase staff morale. When employees feel their hard work and dedication are recognized, they feel valued in the organization. This, in turn, can boost their productivity and enthusiasm for their work. Moreover, recognition fosters a positive work culture where employees feel appreciated and are likelier to go the extra mile for their job.

While recognition fuels pride in one’s work, reward reinforces this sentiment. Whether monetary or otherwise, rewards are a tangible acknowledgment of an employee’s contributions. They function as a driving force, motivating staff to exceed their performance levels and strive for higher achievements.

How to balance recognition and rewards in your workplace

Recognition and rewards help foster a positive work environment. They reinforce the behaviors and values that contribute to an organization’s success. However, striking the right balance between the two is a delicate process. If not appropriately managed, it can lead to discontent and demotivation among staff.

An overemphasis on rewards may make recognition seem hollow, while focusing too much on recognition may leave staff members feeling undervalued due to the lack of tangible benefits. Your organization can achieve an optimal balance by maintaining a consistent pattern of recognition and tying rewards to clearly defined performance benchmarks.

Recognize effort and reward results. Recognition should be frequent and consistent, aimed at acknowledging effort. This approach motivates all team members and not just top performers. Employees who see their efforts recognized will likely continue contributing to their best abilities. On the other hand, rewards should be linked to significant achievements and results. This approach reinforces the link between performance and rewards, encouraging employees to strive for excellence.

Implement a fair and transparent system. Fairness is vital in balancing recognition and rewards. Ensure that all employees understand how the recognition and reward system works and that it is applied consistently and uniformly across teams. Make sure the rules and criteria for recognition and reward are well-defined and communicated to each staff member. This involves outlining the performance standards or behaviors that will be rewarded or recognized, and the types of rewards or recognition that employees can earn.

How Birches Group’s approach and tools can help

At Birches Group, we understand the importance of recognition and rewards in engaging your staff. Our Community™ approach has made it possible to distinguish recognition from reward, where pay movement is linked to skills growth, and performance is linked to rewarding achievement.

Our online platform offers comprehensive tools and resources to help your organization recognize and reward employees effectively. In addition, our compensation and benefits surveys provide data and insights into what similar organizations in your labor market are doing to recognize and reward staff.

We also offer training and consulting services to help you develop and implement effective recognition and rewards programs. Our team of experts is ready to guide your organization using Community™. Contact Birches Group today and let us guide you in distinguishing recognition and reward.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr. 

Follow us on our LinkedIn for more content on pay management and HR solutions.

A group of people sitting around a table in an office.

WHY ORGANIZATIONS SHOULD OUTSOURCE THEIR SALARY SCALE DESIGN

Written by Kai Donesa on . Posted in Resources.

Organizations are beginning to recognize that the key to attracting and retaining top talent hinges heavily on a strategic, fair, and competitive salary scale. Yet, tailoring this structure to your unique needs can be complex.

Do you have the tools to properly analyze labor market data? Can your human resources (HR) team maintain the salary scale annually, in addition to addressing other responsibilities? Is there a way to design and update your salary scale more efficiently? This is where outsourcing is necessary.

Outsourcing the design and maintenance of your salary scale unburdens you and your HR team from this intricate task, allowing you to focus on your core business operations. Handing this responsibility over to more experienced professionals does not only save time; it ensures that your salary scale aligns with your strategic goals, global policies, market trends, and industry standards.

This article discusses why organizations should consider outsourcing the design and maintenance of their salary scale. We will explore how this pragmatic move can help you, from gaining expert advice to ensuring market alignment. If you’ve been second-guessing whether you need to outsource your salary scale design, our insights might be what you need to make an informed decision.

Understanding salary scale design

Your salary scale is the single most important document in HR. The structure determines how much an employee will be paid based on their role, their value for experience at each grade level, and the difference between one grade level to the next. It tells your stakeholders everything they need to know about your organization, including:

  • How you position yourself in the market
  • What value you place on your jobs
  • How you manage relationships across jobs
  • What are the possible career progressions
  • Where you stand on equity and transparency

A well-balanced salary scale is crucial for your people to work efficiently and achieve team cohesion. Your salary scale drives all other HR programs, including recruitment, staff retention, promotion, and career development.

Designing the scale is not only about deciding how much to pay an employee or listing pay grades. It is driven by building a fair and equitable compensation structure that shows how you attract and retain talent, as well as motivate staff. It involves balancing internal considerations and team dynamics with the external market.

However, designing and updating your salary scale requires a deep understanding of your business strategy, a thorough knowledge of the labor market, and keen insight into the motivations and expectations of staff. These tasks demand a high level of skill, expertise, and experience.

Why it’s essential to have a well-designed salary scale

A well-designed salary scale establishes a framework for determining staff compensation and sets the standard for pay equity within your organization. It also helps ensure employees are rewarded fairly, boosting morale and motivation.

Your salary scale also serves as a roadmap for career progression, giving staff a clear idea of what they can expect as they advance. This transparency can help foster trust and loyalty among staff, leading to increased job satisfaction and lower turnover rates.

Further, a well-designed and updated salary scale can help your organization attract and retain top talent. By offering competitive salaries in line with market rates, you can position your organization as an employer of choice.

Common challenges in designing a salary scale

Designing a salary scale is not without its challenges, though. One of the fundamental issues is determining the appropriate pay range for each grade level within your organization. This requires a thorough understanding of the job market and the ability to assess the value of each level accurately, carefully balancing your organization’s workforce needs and overall budget.

Another challenge is ensuring pay equity. This involves making sure employees are paid fairly for their work. Achieving pay equity can be complicated, especially in large organizations with a diverse workforce across labor markets.

Keeping the salary scale up to date is also a concern. The job market constantly evolves, and the value of specific roles can change rapidly. The salary scale must be updated every year to reflect market trends.

The benefits of outsourcing salary scale design

Outsourcing the design of your salary scale offers several advantages:

  1. First, it frees up valuable time and resources. Designing a salary scale requires a significant amount of time and expertise. By outsourcing this task, your HR team can focus on other vital projects, such as employee engagement and talent development.
  2. Second, outsourcing gives you access to expert knowledge and insights. An HR consultancy firm like Birches Group has a deeper understanding of labor markets across continents. Additionally, firms such as ours can share accurate and timely information about salary trends and benchmarks.
  3. Finally, outsourcing ensures fairness and objectivity. An external firm can design a salary scale free of internal biases or conflicts of interest.

Case study: Elizabeth Glaser Pediatric AIDS Foundation

To illustrate the benefits of outsourcing your salary scale design and maintenance, let’s consider the case of the Elizabeth Glaser Pediatric AIDS Foundation (EGPAF), a nonprofit organization supporting activities in 19 countries. EGPAF had a centralized salary system but needed to ensure its salary scales kept up with the market, especially in Africa.

EGPAF tapped us to design its salary scale over several years. Doing so refined the nonprofit’s salary scales with a view closer to the local setting. We then looked at each African location, improving EGPAF’s pay structures and systems based on our NGO Surveys. Based on their budget, we developed three different salary scale options for each country.

As a result, EGPAF can now:

  • Name which comparators are relevant to them based on consistent comparator criteria developed for their salary scale review, and which scale design approach best addressed its internal compensation issues, all while staying within budget.
  • Get a more precise snapshot of the labor market through our salary survey data.
  • Anticipate and be better equipped when sudden changes in the market occur.

This case illustrates the significant benefits that can be gained from outsourcing your salary scale design.

How Birches Group can help you design and update your salary scale

Creating and maintaining a salary scale is a technical and creative process best left to specialists. If you’re considering developing or updating your organization’s salary scale, we at Birches Group are here to help. With our team of experienced professionals, we can provide salary scale options tailored to your needs.

We have extensive expertise in adapting or creating salary structures through our work with many clients from the public and private sectors. We believe proper salary scale design must be tailored to your needs and culture, as well as your compensation philosophy, market position, and budget. A well-designed salary scale must also align with the local market and adhere to corporate policy and compensation goals.

If you’re ready to learn more about how we can design and maintain your salary scale, contact us today.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr. 

Follow us on our LinkedIn for more content on pay management and HR solutions.

Ensuring Equity

BUILDING A SUCCESSFUL HR MANAGEMENT STRATEGY BY ENSURING EQUITY

Written by Kai Donesa on . Posted in Resources.

A discourse is taking center stage in human resources (HR): equity. More than just a buzzword, ensuring equity in the workplace is now a concern across organizations, sparking conversations between HR professionals and business leaders.

But equity is more than just fairness. Equity ensures every employee has equal access to opportunities, resources, and fair treatment. In an era where diversity and inclusion have become the core of corporate values, equity is impossible to ignore. Integrating equity into your organization’s HR strategies is crucial to cultivating employee satisfaction and success.

Additionally, it’s important to distinguish between equity and equality. While equality involves providing the same resources to everyone, equity acknowledges that individual circumstances vary and, as such, an organization should offer the necessary resources to achieve equal outcomes.

Ensuring Equity in the work place
Image source: Robert Wood Johnson Foundation

As organizations navigate an increasingly diverse and dynamic landscape, establishing a fair HR strategy goes beyond ethics and compliance.

This blog post will explore the hot topic of equity, its role in HR practices, and how HR can foster an environment where equity is a reality. Drawing from industry insights and proven systems, the blog article will help guide you toward cultivating a fairer and more equitable workplace.

What is equity?

As an HR professional, you have probably heard the term “equity” thrown around in your workplace. But what does it mean?

Equity is the fair treatment of access, opportunity, and advancement for all individuals. While the term is often associated with pay, equity acknowledges that every staff member has unique needs and circumstances.

Ensuring equity involves customizing resources and opportunities so that everyone has an equal chance of success. According to the Society for Human Resources Management, this includes “identifying and working to eliminate barriers to fair treatment for disadvantaged groups, from the team level through systemic changes in organizations and industries.” For example, providing added training to employees who lack specific skills can be an example of equity.

You might wonder why equity is significant and how it affects your organization. The truth is that equity is the backbone of any successful HR management strategy. Without it, your organization could face many challenges, including high turnover rates, low employee morale, and even legal issues.

How vital is equity in HR?

Equity in HR is more than a matter of ethics or compliance. It’s a strategic necessity. Employees who feel treated fairly are more likely to be engaged and productive. They are more likely to stay with your organization and contribute to its success.

A lack of equity, on the other hand, can lead to a toxic work culture. Employees who feel they are not treated fairly are more likely to be disengaged and unproductive. They are likelier to leave your organization, leading to high turnover rates and recruitment costs. Moreover, a lack of equity can also expose your organization to legal risks, as it could potentially violate anti-discrimination laws.

Another reason ensuring equity is vital in HR is that it helps attract and keep top talent. Job seekers are not just looking for a paycheck. They are looking for a workplace that values diversity and inclusion and treats all employees fairly. By ensuring equity, you can make your organization a more attractive place to work.

Ensuring equity in the organization is vital as the workplace constantly evolves. How can organizations support equity when their staff is dispersed across various locations, both locally and internationally? How do they ensure equal opportunities when most staff opt for remote work instead of coming to the office?

HR plays a crucial role in implementing policies and practices that promote fair treatment and challenge systemic bias. They must create an environment where every employee has a chance to succeed regardless of their background.

How do I build Equity into our HR strategy?

Building equity into your HR strategy may seem daunting, but it doesn’t have to be. Here are some steps you can take to ensure equity in your organization:

Assess your current situation. Are there any areas where some employees are treated less favorably than others? Are there any policies or practices that could potentially discriminate against certain groups of employees? Thoroughly auditing your HR processes can help. Collect and analyze relevant data to identify any equity issues. Once you have identified these concerns, take action to address them.

Develop a clear policy on equity. Should individuals in the same job receive similar pay rates, regardless of their location in vastly different markets? Alternatively, should compensation be determined based on what the organization considers fair and competitive within the specific market where the employee is situated? Your policy should clearly articulate your organization’s dedication to equitable treatment for all employees, set up parameters for addressing and rectifying potential equity concerns, and emphasize the significance of communicating this policy to all employees while offering training in equity and diversity.

Implement fair HR practices. Promoting equity requires an integrated approach where every individual feels valued and heard. This involves creating an environment where diversity is celebrated and employees are given equal access to opportunities through unbiased recruitment processes, proper compensation structures, and inclusive workplace policies. Remember, the goal is not just to treat everyone the same but to give everyone an equal opportunity to succeed.

Communicate your targets and share your progress. Set clear, measurable goals for equity, and track your progress towards these goals. Be transparent about your progress and any challenges you are facing. Most importantly, set up transparent communication channels that allow for open dialogue about organizational decisions, fostering trust and empowerment among staff members.

Promote the importance of equity. Make sure that your organization’s leaders and staff are aware of the benefits of equity and why it is essential to success. Remember that equity is an ongoing commitment that requires continuous monitoring and improvement. By promoting an environment of fairness and respect, you can ensure that your people can thrive and contribute meaningfully to fulfilling the organization’s mission.

How Birches Group can help you ensure workplace equity

At Birches Group, we understand the importance of equity in HR. That’s why we’ve developed Community SkillsTM, a platform and tool that can help you ensure equity in your organization.

Community SkillsTM is designed to help assess your people’s skills and knowledge growth. It allows you to create a skills profile for each employee, which can aid in finding skills gaps and developing learning & development plans.

In addition, the platform offers benchmarks for various roles and functions to better ensure fair compensation for all employees. By using Community SkillsTM, you can ensure that all your employees are given an equal opportunity to grow and succeed.

Equity is a crucial factor in building a successful HR management strategy. It’s not just about treating everyone the same, but about giving everyone an equal opportunity to succeed. By understanding equity, recognizing its importance, and integrating it into your HR practices, you can create a workplace that is fair, inclusive, and conducive to success.

Contact Birches Group today to learn about our Community SkillsTM platform and request a demo.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr. 

Follow us on our LinkedIn for more content on pay management and HR solutions.

Performance Rating

WHY A FIVE-POINT PERFMORMANCE RATING SYSTEM MAY BE DETRIMENTAL TO PEOPLE MANAGEMENT

Written by Kai Donesa on . Posted in Resources.

You probably finished 2022 with a performance evaluation round with a five-point performance rating system. To evaluate yourself, your supervisor, and your colleagues, you were probably given a scale of 1 to 5, with 5 being the highest rating.

I’ve worked with several employers, including at large firms and a nonprofit organization, and I’ve noticed that they follow the same approach to evaluating staff performance. To assess yourself, your supervisor, and your colleagues, you’re given a scale of 1 to 5, with 5 being the highest rating.

Most organizations use the traditional five-point performance rating system. But a five-point system carries with it a range of people management issues. Instead of motivating staff, it does the complete opposite. And the root cause is that employees want to receive a perfect rating of 5 out of 5. Anything less than that, even a 4, would be undesirable and be seen as a failure.

I’ve experienced this dilemma firsthand. When my work performance was rated a 4, I was disappointed. I couldn’t help but compare myself to my coworkers, who received higher ratings closer to a perfect 5. Looking back, this traditional five-point system for measuring performance is far from helpful for several reasons.

In this article, we’ll explore why a five-point performance rating system may be detrimental not just to people managers and human resources but to the organization. We’ll also share what your human resources department can do to address this all-too-common mistake.

Does striving for excellence work?

To achieve success and become a market leader, organizations ‘aim high’ in setting employee expectations and performance standards. The strategy: celebrate the few exemplary and high-performing staff members who will inspire others to do the same. Additionally, employees are encouraged to do exceptionally well at their job every time.

The consequences of such an approach are potentially disastrous, however.

What are the drawbacks of aiming for a perfect rating?

Many organizations believe that setting ‘exceed’ or 5 out of 5 as the gold standard for performance is the best way to meet their goals. But this can lead to undesired behaviors, as seen in the situations below.

Divide and conquer. Setting extraordinarily high expectations can lead to false confidence and optimism. If staff work hard to exceed expectations, there is a greater chance of being adamantly focused on their own goals than collective goals. This can lead to division and conflict as staff members try to reach lofty individual goals.

Expectations versus reality. Setting ‘exceed’ as the performance standard can also create unrealistic expectations. When staff members believe they can achieve incredible things, they may be disappointed when reality doesn’t meet their expectations. As a result, they become too critical of their work, always striving to improve, even when the work is satisfactory. Employees may feel they can’t succeed, leading to demoralization and frustration and harming team morale and productivity.

Under pressure. Doing one’s job well can sometimes be challenging, but it is even more problematic when it involves working under conditions that aren’t conducive to success. When the pressure is high, it is easy for performance to suffer.

Compare and contrast. Instead of working on their tasks and achieving their goals, employees may be more likely to focus on how they compare to others. And when comparing their work with that of their colleagues, staff may feel they need to do more. This can lead to resentment and conflict, and it can also damage morale.

Alienation. When managers reward only high-performing staff members, they may inadvertently harm employee engagement. Managers who target star employees may risk alienating others who feel they cannot meet expectations. This hurts employee engagement and affects the organization’s culture and vibe.

At a certain point, striving to excel and exceed expectations may become frustrating or demotivating. To avoid setting up your organization for failure and to keep staff accountable, consider shifting to a performance standard that is more realistic and meaningful to them.

What does Birches Group recommend?

Remember that people want to feel valued and that everyone in the organization matters. Setting the attainable goal of achieving targets and improving one’s skills and performance are better ways to motivate people.

In contrast to the traditional five-point performance rating system I’ve seen in several organizations, Birches Group uses a simpler, less problematic four-point system. At Birches Group, performance is measured on a four-point system—Fail, Needs Improvement, Achieve, and Exceed—where Achieve is the gold standard and Exceed is the highest and reflects exceptional work. What I appreciate about this more straightforward approach is that there is less pressure, politics, and alienation. Everyday achievers are held in high esteem. Most staff are achievers who deliver what is expected of them in a performance year. Through the Birches Group four-point rating system, the organization can celebrate the many ‘good’ or the many achievers while allowing the exceptional few to be rewarded accordingly. The fact that there are different kinds of performers—the good, the great, and the exceptional—is acknowledged.

Bottom line

Recognize only a few exemplary employees, and you could set up your organization for failure. If you want staff to remain productive, engaged, and empowered, celebrate the many achievers across your organization and aim for progress. Doing so will also help your people stay focused, deliver results, and ultimately help them feel that they matter.

Contact us to learn more about Birches Group’s Community™ Performance and schedule your demo today.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr. 

Follow us on our LinkedIn for more content on pay management and HR solutions.

4 BIGGEST PROBLEMS IN RECRUITMENT AND HOW TO FIX THEM

Written by Kai Donesa on . Posted in Resources.

One of the critical functions of HR that significantly impacts an organization is recruitment. Hiring talent is a multi-faceted process with many steps. In the blog, we discuss the 4 biggest problems in recruitment and how to fix them. These steps begin with having clear job descriptions, sourcing qualified candidates, conducting job interviews, and setting the starting salary of new hires. All these steps, coupled with the lack of standards and the personal biases of the hiring panel, could be a minefield of challenges and potential pitfalls.

Areas where organizations often make recruitment mistakes include vague job descriptions focused on tasks and not effectively screening applicants based on a solid and objective framework. Without the proper structure and processes, an organization’s recruitment efforts can quickly go sideways. Instead of hiring a perfectly qualified incumbent based on their skill level, managers and recruiters typically settle for the most charismatic person who happens to apply. But how can they determine if that candidate meets the role’s requirements?

Recruiting new employees can be daunting, so organizations must ensure corporate standards when assessing talent. What if an organization’s approach to recruitment can be fairer and more transparent—with purpose-driven job descriptions, structured job interviews focusing on the candidate’s experience, a solid skills-based framework for assessing candidates, and a transparent and objective approach to setting starting pay?

This blog post will present some of the most pressing recruitment challenges faced by managers and panel interviewers—and helpful ways organizations can solve them. A hint: it’s about revamping the process.

Vague job descriptions

Job descriptions describe the purpose, scope, and impact of a job. It should be clear, concise, and, most importantly, detailed enough to provide a clear picture of why the role matters. It must describe the role’s various functions, its placement within the larger unit or team, and how it contributes to the mission.

Unfortunately, due to the lack of guidance and proper tools, managers often try to write job descriptions by creating a mile-long list of tasks.

There are several problems when job descriptions focus on a list of tasks or inputs:

  • First, a list of day-to-day tasks doesn’t demonstrate why the role is crucial to the organization. How can candidates genuinely understand what they’re applying for if they only see a list of what they need to accomplish at the end of the day or week?
  • Second, when job descriptions use inputs, this does not give the incumbent room for flexibility or creativity with their approach to work. The concept of input stems from the old days of ‘clocking in and out’ from the office every day and ensuring your manager sees you at the office to give the impression that one is working hard. But does being in the office and clocking in truly mean that work is getting done?
  • Finally, a checklist of tasks often uses vague language, such as ‘assist’ or ‘prepare,’that fails to describe the impact of the role. The use of vague language affects how the job is evaluated at the proper level and, subsequently, affects compensation, learning & development objectives, performance measures, and career milestones.

So, how can this be avoided? By writing purpose-driven job descriptions that focus on the what and why rather than the how or where. An effective job description has a clear mission statement at its core. It should describe to the candidate why the role is crucial and what it is expected to deliver.

Additionally, a targeted skills profile must be incorporated into the job description to guide the recruitment process. By indicating the desired skill level required for the job (whether Basic, Proficient, or Skilled), managers or the hiring panel can better identify qualified candidates that meet the level of expertise required for the role.

Little to no structure to job interviews

It’s not unusual for job candidates to feel they are being grilled during an interview. The hiring panel asks questions that gauge the knowledge and experience of applicants. What do they know about the organization? What are their strengths? Where are they in their career?

The problem is when interviewers only ask candidates why they want the job. When going through the typical job interview process—where interviewers often think of questions on the fly—they fail to let the candidate demonstrate their experiences reflecting the required skill level for the job.

In many job interviews, questions are not given much thought. The concern is getting through the countless resumes and long line of applicants to finally fill the vacancy. But what ends up happening is that candidates are often asked questions that have little or nothing to do with the job, ultimately leading to a bad hire.

How can organizations get around this? Interviewers must be armed with questions integrated into the job’s skills profile and following the development approach, which indicates how a skill level may be mastered.

Birches Group’s Community™ Skills Recruitment tool provides interviewers with questions linked to the selected skills profile—from Basic to Proficient to Skilled—using a competency-based model. The questions encourage the candidate to relate a real-life experience or event that illustrates their capacity to respond to a given situation.

With standardized interview questions for every skill stage at each grade level, interviews finally become job-based, structured, and consistent.

Lack of corporate standards for assessing candidates

In assessing candidates, managers or the hiring panel have never been provided standards they could use to objectively base their assessments. Often, they tend to fall back on the usual years of experience, personal preferences, and even gut feeling. Not having clear criteria for assessing candidates and instead relying on personal judgment or salary history usually lead to hiring mistakes.

Following the structured interview questions provided by our Community™ Skills Recruitment tool, an assessment can be made by scoring the candidate’s responses to the appropriate skill level for each question. Depending on the level of knowledge and experience the candidate demonstrates, the interviewer can select from either the Basic or Proficient stage. But when a candidate’s responses appear to reflect a depth of knowledge or highly refined experience, this can warrant the interviewer to select the Skilled stage on their scorecard.

Once the job interview is complete, a scoresheet with the progressions of questions and skills ratings is presented, guiding subsequent discussions on the candidate’s assessment.

A consistent set of questions linking the skill level to the job grade ensures a neutral assessment of each candidate’s qualifications without examining their salary history.

Lack of a fair and equitable approach to setting starting pay

Many organizations do not have a clear approach to determining fair and appropriate starting salaries beyond their hiring rates when setting starting pay. When there is a desperate need to fill a vacancy, managers often end up negotiating starting salaries beyond what the organization is prepared to offer. When starting salaries are determined on a case-to-case basis, the organization is left with staff paid at different rates despite having the same work and skill level. This opens managers and HR to problems like mismatched expectations, which can cause employee resentment.

Organizations need to ensure that their hiring practices are fair and equitable. If candidates are assessed based on their skill level, the same approach can be applied when setting starting pay. The Community™ Skills Recruitment tool provides a framework for managers to easily determine starting salaries based on the candidate’s confirmed skill level.

Organizations can array the salary range for each grade level against our five Community™ Skills stages. When setting starting pay for a successful candidate, our Community™ Skills Recruitment tool automatically calculates the appropriate starting salary based on the candidate’s skills scorecard during their job interview.

When the skills profile is integrated into designing the job, structuring the interview questions, assessing candidates, and determining starting pay, organizations now have a consistent, fair, and equitable approach to the recruitment process. Biases, particularly age, gender, and race, no longer become a factor, while experience can be assessed more accurately.

A final note

Organizations face many issues when it comes to screening and hiring candidates. The most frustrating is not knowing what the applicants are truly capable of. To avoid the four problems earlier discussed, organizations must rework their approach to recruitment. They need to establish standards for assessing talent. Instead of looking at tenure, degree, or salary history, organizations must engage in skills-based recruitment that links back to the job level. By taking this approach, organizations can bring consistency, standards, and equity to one of the most unstructured but crucial HR functions.

Contact us to learn more about Birches Group’s Community™ Skills Recruitment tool and schedule your demo today.

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr. 

Follow us on our LinkedIn for more content on pay management and HR solutions.

Monitor The Labor Market

5 REASONS WHY ORGANIZATIONS SHOULD MONITOR THE LABOR MARKET

Written by Kai Donesa on . Posted in Resources.

The labor market is constantly changing and evolving. It changes to reflect demands and pressures from different sectors, industries, and locations. New jobs emerge, old ones disappear, and wages fluctuate—sometimes due to external forces and local or regional economic factors. Organizations must stay on top of trends and monitor the labor market to remain competitive. Those that don’t keep up risk being left behind and failing to meet the needs of their people.  

One way for organizations to stay ahead is to monitor the labor market. Doing so helps human resources (HR) teams understand how their organization is affected by market movement. Reviewing and interpreting labor market data allows HR teams to address critical questions such as: 

  • How can we determine how much the market pays for similar roles? 
  • How can we competitively position ourselves against our target peers? 
  • How can we become an employer of choice in the local labor market? 

Keeping an eye on the labor market enables organizations to make informed decisions about hiring, pay management, employee benefits, retention strategies, and more.  

This blog post will explore why organizations should track the labor market and how to do so effectively. When the organization knows what is coming, it can plan and ensure it is well-positioned when the opportunity to grow strikes. 

Establishing market composition and position 

Using labor market data can help organizations clearly and consistently establish their competitive strategy, notably their: 

  • Target composition, or which group of employers are similar and more relevant to the organization. Consider organizations from the same sector, employers you lose your staff to, and organizations you often hire staff from.  
  • Target position, or how competitive an organization wants to be. Identify the ideal percentile (e.g., 50th, 75th) of the labor market the organization wishes to attract.  

Determining its target composition and position enables an organization to understand where it stands against key employers in the market. It also guides the organization on what it needs to do to lag, match, or stay ahead of relevant comparators. Organizations must consider their compensation policies and budget to establish their target composition and position. 

Setting benefits 

Labor market data also gives up-to-date insights into benefits widely provided in each country. In addition to salaries, benefits come in the form of cash (allowances and bonuses), in-kind benefits (company bus, gift baskets, company products, etc.), and non-salary benefits (retirement plans, healthcare coverage, family benefits, and leave provisions). 

As the organization reviews compensation and benefits surveys, it can easily identify mandatory, cultural, and market practice benefits, as well as benefits that address local hardships. And while salaries often attract key talent to an organization, benefits make up a significant part of the compensation package in developing markets. By providing the proper compensation and benefits, the organization can remain competitive and retain talent.  

Identifying HR gaps and making the necessary adjustments 

Identifying the gaps in HR practices is another way organizations can benefit from monitoring labor market information. Some of the few questions that organizations will want to address are: 

  • Do our hiring rates remain competitive? 
  • Are we able to retain the talent we need? 
  • Are our employee benefits competitive in the market? 

When the organization encounters talent management issues—such as challenges in attracting the right talent or holding on to staff—it may be time to make adjustments to the compensation package. 

If the organization is looking for data scientists—but hasn’t found suitable candidates—it may be time to rethink the starting salaries to ensure they are comparable to other organizations hiring for a similar job. Or perhaps the organization starts to lose staff after some time. It may need to reassess policies on pay movement, benefits packages, or career advancement to entice staff to stay longer.  

Understanding the impact of the data

Organizations need to go beyond the labor market data. They must understand how changing HR policies and practices in reaction to emerging trends, shifts, and volatility affects staff. So, the question that needs to be addressed is: Do the organization’s policies and initiatives reflect labor market changes and demands? 

A recent example would be the shift from working at a traditional office to working remotely or in a hybrid format. After years of being accustomed to working from home (in response to the COVID-19 pandemic), employees now expect flexible work arrangements—so much that they are willing to leave the organization if it does not offer the option. 

Another example is managing dispersed teams. With many employees now preferring to relocate to places that are sometimes far from the office, how will adjustments to compensation and benefits affect staff based in different areas? Should organizations still base salaries on city rates or adjust them based on where the staff chooses to relocate?

Thus, organizations need to use labor market data and its implications to help inform their policies. Other key questions that organizations need to answer when looking at labor market data include: 

  • Is our compensation program reaching the talent we need? 
  • How can we maintain our relevance in the labor market? 
  • Are there opportunities for improvement? 
  • Will changing our policies and practices help or hurt us? 
  • What are the implications of these changes on staff? 

Managing compensation even through uncertainty 

Now more than ever, organizations need to closely monitor the market. With inflation rising in countries across the globe, employees need to know that their employer has a plan to help them get through turbulent times.  

Organizations can best manage economic turmoil by monitoring the labor market coupled with a special measures policy. When volatility happens, chances are employees are going to ask HR how the organization will help their families manage their day-to-day expenses. When market conditions warrant adjustments to compensation, this is easily defensible when you have the market data to support it.   

When unpredictable events such as economic volatility, natural calamities, armed conflict, and periods of unrest affect the regular dynamics of the labor market, organizations must keep participating and monitoring labor market movement. By doing so, the organization can determine proper triggers, based on data, that would justify changes to compensation and benefits, as well as the frequency to which adjustments are made.  

Bottom line: Know where you stand 

The labor market continues to shift. It may be difficult for organizations to keep up as the market relies on changes from other sectors of the economy and events from around the world. As such, it is critical to keep track of the ever-changing landscape. This ensures that organizations adapt and adjust policies and measures to meet new demands, positioning themselves for success.  

To do this, organizations need up-to-date data about the labor market to know what conditions are like in their area. Tracking the labor market through salary surveys can offer helpful insight into emerging trends that could impact the organization. Monitoring will help employers understand current conditions to make informed decisions about jobs, the market, and skills and performance. In the end, keeping one’s eyes on the labor market helps organizations stay competitive.  

Does your organization need labor market data, especially on developing markets? We at Birches Group offer the most comprehensive salary survey coverage, with data on over 150 countries. We survey markets of varying sizes and focus on leading employers that set trends. Get in touch with our consultants to get started. 

Carla is a part-time copywriter in our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr. 

Follow us on our LinkedIn for more content on pay management and HR solutions.

ESTABLISHING CLARITY, FAIRNESS, AND EQUITY IN PAY

Written by Kai Donesa on . Posted in Resources.

Establishing fairness in pay involves careful and thoughtful decision-making that is not as straightforward as simply assigning the same salary to all employees in the same position. Staff development is never uniform. Employees develop at different paces, with some gaining skills and experience around specific areas of the job faster than others. To ensure fairness and equity through pay, employers need to carefully assess the unique skills and knowledge of each employee, while providing clarity in approach.

Clarity in Pay Through Transparency

Historically, disclosing one’s salary has always been considered private and taboo. Salaries have always been an emotional and sensitive subject, as it is typically associated with one’s value to the company.  According to this LinkedIn article, one of the reasons for keeping wages and salary ranges private is that companies want to keep the status quo. They are afraid to upset employees which can inevitably happen when pay gaps in the organization are exposed. But the reality is that every organization will have pay gaps, and a major step in eliminating those gaps is through transparency.

In recent years, both lawmakers and leading companies have been addressing gender and race-related pay gaps through laws and compensation policies. In 2006, Denmark introduced legislation that required companies to disclose wage statistics between men and women with the same job if the company has more than 10 men and women working in the same position. In this study done by Professor Morten Bennedsen from the Economic Institute at the University of Copenhagen and INSEAD Business School in France, the law appears to have decreased the pay gap between men and women by 13%. In Canada, public sector employers are required to disclose salaries and benefits of employees that are paid $100,000 or more in a year which led to a 30% drop in the gender pay gap according to a study by the National Bureau of Economic Research .

In Birches Group, we too, believe and practice transparency in pay which is demonstrated through a couple of ways. First, the company’s salary scale is published to all staff. All employees are allowed to see the salary ranges not only for their grade level, but also others. Simply making our salary scale public allows everyone in the organization to see predictable movement within each grade level, the difference between one grade level to the next, and possible career progression for each role.

Second, our compensation policies on setting pay, variable pay movement, and milestones to determine promotion readiness are made clear as part of the company’s onboarding process and refresher trainings are regularly provided to all staff. When organizations make it clear how employees are paid and how they can chart their careers, staff feel more empowered to take equal ownership of the level and pace of their development, positively contributing to employee retention, while holding the organization accountable to provide clarity to their employees on how they are assessed and recognized.

Fairness and Equity in Pay by Measuring Staff’s Skills & Knowledge

Managing pay increases has always been a complicated process. People want to be paid according on their level of experience, but traditional approaches have never allowed managers to clearly measure experience apart from time (through time-based “steps” in the salary scale) or performance (through merit pay).

Using time-based steps or increments was never effective in recognizing one’s experience. As long as an employee completes another year with their employer, they get one or two steps in their pay regardless of whether they do their job or not. Merit pay, on the other hand, allows for variable pay movement based on the employee’s performance ratings from the preceding year. While this approach was designed to award pay increases to employees with good outputs and results, using performance ratings is not reliable because it doesn’t guarantee the same results the following year. When performance is used to drive pay increases, the organization is essentially rewarding an employee’s one-time achievement with a salary increase forever.

To truly establish equity in the workplace, we at Birches Group, believe pay movement should be based on the level of skills and knowledge the employee brings to the company. Over time, as an employee acquires and demonstrates new levels of skills and knowledge, their capacity to perform their job becomes better, making it a more effective and objective way to drive pay increases.

A big challenge to employers has always been how to measure one’s experience – “How do I know, what you know?” Birches Group has come up with a framework and an assessment tool that can explicitly measure your employees’ skills and knowledge. Using our Community™ Jobs approach as the underlying foundation, Community™ Skills consists of a progression of five skills stages across six indicators which is used to measure the continuous growth of an employee within their job.

Through Community™ Skills, pay management policies can be developed and aligned to use skills and knowledge growth to drive variable pay movement. Community™ Skills can also be used to demonstrate equity and fairness through deliberate developmental assignments for staff, as well as providing an objective criterion for succession planning and promotion decisions.

Pay equity and transparency in the workplace doesn’t happen overnight. Companies must take active steps to ensure clarity around pay management policies, as well as standards on how employees are assessed and developed. Birches Group has extensive experience developing compensation policies for organizations across different sectors and markets. Our Community™ Skills tool can help organizations assess the capacities in their workforce, facilitate pay movement, as well as guide learning and development assignments. Contact us to learn how we can improve your talent management programs today.

Kai works in our Marketing Team in Manila. She creates online content around Community™ concepts and assists in developing promotional campaigns answering why Community™ should be each organization’s preferred solution, focusing on its simplicity and integrated approach. She has had years of experience in social media content creation handling different brands over the years.

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