Tag: benefits survey

Analyzing your benefits package is a step that can’t be missed. In many labor markets around the world, benefits are an essential part of total compensation. Particularly in developing markets, some benefits are mandatory, others may be cultural, and some given to address certain realities on the ground. Whether you are a local organization or an international one, it is essential to have a policy that aligns with your market’s local conditions.

Additionally, benefits are also an important part of a company’s Employment Value Proposition (EVP). Determining which benefits your company provides, the frequency it is provided, and grade levels eligible to receive them can be used a strategy to attract and retain talent, showcase company culture, and be seen as an employer of choice.

Once you have aligned your total compensation against the market, designing your benefits package will begin by ‘backing out’ your benefits to arrive at just base salary. From there, you can assess which benefits to keep and maintain, and which ones to change.

When examining your benefits package, here are three things we suggest you keep in mind:

  • What benefits are considered mandatory in your market? – different countries have different mandatory benefits. Some countries have mandatory bonuses on top of base salary, others may have mandatory housing or transportation allowances, while others have government-mandated health and pension contributions. As an employer, you will need to follow what is prescribed by law, especially if you are an international organization.
  • What benefits are common practice in your market? – knowing which benefits are commonly provided by most employers in your market can also help when designing your benefits package. Of course, it is not necessary to follow every single benefit provided. But those that are given by majority of the companies could be considered and examined further against your budget and policy.
  • What benefits are considered tax-advantageous to your staff? – depending on your market, some benefits can be considered taxable and others non-taxable. When thinking about benefits, employers can provide contributions or cash benefits that do not trigger a tax deduction from staff or maximize its non-taxable portion as much as possible.

Further, when designing your benefits package, employers also need to think about the grade levels that each benefit will apply to. Unless it is mandatory, not all benefits need to be provided to all grade levels and in the same manner. There are some benefits that are given to certain grade levels due to the nature of their jobs. Incentive-based benefits and representational benefits are more common for roles in managerial levels, while cash allowances and transportation benefits are more commonly provided to general and process-based grade levels.

Benefits can also be used by employers to encourage desirable behaviors from their staff. A classic example is using performance bonuses to reward achievement and a job well done at the end of the performance year. Another is the use of loans, seniority allowances, or even company-sponsored savings plans to promote staff retention. Sometimes, companies also hold activities that foster workplace culture among their employees, from team lunches, happy hour, to corporate social responsibility events. In our many years of conducting salary surveys and collecting data from employers in over 150 countries, we have certainly seen a lot of creativity from employers when using benefits that highlight their unique company culture.

When analyzing your benefits, we must remember that, in the end, benefits are cheaper than salaries. Base salary, bonuses, and allowances all come from the same internal budget, so every dollar that goes into providing more benefits will take away from the budget for other components of your staff’s employment package, such as pension and salary increases.

Birches Group can help your organization design a benefits package that aligns with your policy while meeting local conditions. Contact us to get started.

Bianca manages our Marketing Team in Manila. She crafts messaging around Community™ concepts and develops promotional campaigns answering why Community™ should be each organization’s preferred solution, focusing on its simplicity and integrated approach. She has held various roles within Birches Group since 2009, starting as a Compensation Analyst and worked her way to Compensation Team Lead, and Training Program Services Manager. In addition to her current role in marketing and communications, she represents Birches Group in international HR conferences with private sector audiences.

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In human resources, salary benchmarking serves many critical needs. It helps organizations assess the competitiveness of their total compensation versus the market, and is an important step in managing your human resources program. When organizations look to introduce new positions, salary benchmarking ensures a good understanding of the prevailing market conditions.

Here’s a short checklist – five steps – to follow for your next benchmarking exercise:

  1. Start with a High-Quality Survey

To do any benchmarking, you need market data, and that market data comes in the form of a survey.  The foundation to any market survey is its job matching approach. The job matching exercise ensures that jobs of similar levels of complexity are benchmarked against each other to establish common value across the market. 

It’s important to understand the methodology for job matching used by the survey provider and how the process is managed.  Are clients responsible for job matching, or does the consultant take the lead?

In Birches Group’s Community™ Market surveys, our survey specialists perform the job matching on behalf of every client, ensuring consistency and high-quality.

We use a job matching methodology that is simple, clear, and consistent, based on our Community™ Jobs evaluation approach.  Community™ Jobs considers three factors – PurposeEngagement, and Delivery.

Purpose enables us to examine each role within the organization and determine its primary objectives and how it supports the overall mission of the organization. Engagement identifies how each job interacts and collaborates with internal and external stakeholders to carry out its function. Delivery examines how each role plans, organizes and delivers work to fulfill the organization’s mission.

These three factors are present in any job, at any level. And together, they allow us to understand how an organization conducts business across all levels of work, starting with defining the purpose of its jobs, determining their level of engagement, and examining how each of its roles organizes and delivers service.

2. Focus on Grade Data

Many salary surveys take pride in the number of specific jobs captured in their surveys, but this is really a questionable practice.  Most organizations use generic pay bands and set pay ranges for all jobs at a particular level across all occupations.  Jobs with the same internal grade are paid in the same pay range, so the differences measured in the survey between different jobs are based not on job characteristics at all, but personal ones, like performance or tenure. Job data is also easily affected by the number of incumbents matched to a particular role, giving an illusion of precise differences based on volatile data of questionable value. The differences reported in the survey by job are misleading

When benchmarking your salaries, we believe that organizations should focus on grade data. Grade data is based on the job level and the associated ranges, and not the actual people sitting in those jobs. It’s a more reliable analysis because grade data captures all jobs with the same contribution level to an organization.  Grade data is a more stable representation of actual market movement versus incumbent salaries, which is highly variable.

3. Know Your Target Market

Before making your assessment, it is important that you select the survey comparators that are relevant to your organization. Out of the bigger survey sample, you will need to choose a smaller group of comparators relevant for your organization.

Market surveys can have twenty to over a hundred participants, or even more. But it does not necessarily mean that you compete with each one of them. If you are unsure where to begin with your selection, the criteria below are great places to start:

  • Organizations working in the same/similar sectors;
  • Those which you have lost staff to/hired staff from;
  • and Organizations in the same geographic area. 

You should also consider comparator organizations which share a similar Employee Value Proposition (EVP). Each company’s EVP is different, but look for organizations that have similar mission, approaches to career development, or pay and benefits philosophies similar to your own organization.

4. Identify Your Market Position

Once you have narrowed down the selection to your chosen comparators, the next step is to identify which level or percentile of the sample you want to target. But before making that decision, you will need to go back to your company’s EVP. Your EVP for total rewards should state your organization’s objective for competitive market position. 

Organizations typically state their target market position as a percentile of the targeted comparator group.  A position versus the 50th percentile or median of the market is common; going higher or lower is OK, too – it depends on what talent market you are trying to reach.

Being competitive is not always just about salaries. Allowances and benefits – monetary and non-monetary – can also be used to attract and retain talent. In our own experience, we have encountered companies that choose to position their salaries a bit lower in the market range but offer additional benefits on top of market practice. Again, depending on your company’s EVP, its all about striking that balance.

5. Always Use Fresh Data

If you are responsible for managing your company’s compensation and benefits, one concern that you might have is making sure that you are working with the most updated market information. Companies that have solid compensation policies will still struggle to maintain their competitiveness in the market if they are working with outdated information.

In Birches Group, we recognize that not all organizations update salaries at the same time every year or apply the same frequency between salary reviews. We know that organizations choose to participate in salary surveys when it makes sense for them. Our surveys are evergreen, with the opportunity to participate when it makes the most sense for you, and multiple publication dates.

Our Community™ Market salary surveys are updated three times a year, every AprilJuly, and October. This ensures that we always have the freshest data in our surveys and that any change to your compensation and benefits can easily be captured anytime during the year. Our evergreen approach also allows us to grow our survey sample throughout the year, providing our participants with the most robust data possible.

Birches Group provides labor market information for over 150 countries around the world. Our compensation and benefits surveys cover a full range of professional and support levels, providing information that ensures a client’s pay practices are aligned with the market conditions of leading employers in each country. Contact us to learn more.

Bianca manages our Marketing Team in Manila. She crafts messaging around Community™ concepts and develops promotional campaigns answering why Community™ should be each organization’s preferred solution, focusing on its simplicity and integrated approach. She has held various roles within Birches Group since 2009, starting as a Compensation Analyst and worked her way to Compensation Team Lead, and Training Program Services Manager. In addition to her current role in marketing and communications, she represents Birches Group in international HR conferences with private sector audiences.