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EQUITY IN ACTION: UTILIZE SALARY SURVEYS

Written by Noel Madolid on . Posted in Resources.

In our ongoing blog series on workplace equity, we’ve explored the importance of fair and just compensation practices. We’ve discussed equity, which means paying employees fairly based on their skills and contributions. We’ve introduced a five-step framework for achieving equity. This framework highlights the significance of establishing equivalent worth in developing a grading structure.

However, achieving workplace equity goes beyond internal alignment. It’s about ensuring that your organization’s compensation is competitive within the labor market. This is where salary surveys become valuable.

Building the foundation with a consistent approach

To make sure you’re paying your employees fairly, we recommend using a consistent approach to evaluating jobs. It is best to implement a job evaluation methodology that aligns with the job matching applied in the salary survey.

Many organizations use a job evaluation approach that differs from what was applied in the surveys they use. But doing so makes it difficult to ensure the accuracy of the survey results, which could impact how pay is managed.

The role of salary surveys in workplace equity

Salary surveys offer a window into the labor market, providing insights into current compensation trends and benchmarks. Using salary survey data, organizations can ensure fair pay that is aligned with the market.

These surveys are comprehensive reports that collect and analyze data on compensation practices across a range of jobs, sectors, and geographical locations. The data includes details about base salaries, bonuses, cash and in-kind benefits, and non-salary and after- service benefits.

By providing an objective, real-time snapshot of prevailing market rates, salary surveys enable organizations to  

  • Evaluate internal pay structures against the labor market and identify potential pay gaps.
  • Understand the market forces influencing compensation, enabling informed decisions about pay practices.
  • Offer competitive compensation packages that attract and retain talent, as well as align with their Employment Value Proposition (EVP).

Ultimately, salary surveys help inform organizations in developing their compensation strategies that foster equity and support their overall objectives.

Aligning salary surveys with internal grading structures

In previous blog posts, we discussed how grading structures—categorizing jobs based on value and complexity— establish consistent pay practices within your organization. Each job grade within this structure is associated with a specific salary range.

Salary survey data is critical in informing the design and ongoing update of these structures. By referring to labor market data, your organization ensures that its compensation remains aligned with prevailing trends, essential for promoting equity.

Utilizing salary surveys to inform pay ranges

Once you have aligned your job grades with the market, use survey data to inform your organization’s compensation strategies for establishing appropriate pay ranges for each grade. These pay ranges typically include a minimum, midpoint, and maximum.

When setting pay ranges, consider:

  1. Target market position. What is your organization’s desired percentile ranking compared to the market?
  2. Target market composition. With which specific sectors and organizations does your organization compete for talent?

Because the labor market evolves, your organization needs to regularly review and update these pay ranges based on the latest market data. This ensures your compensation packages remain competitive and attractive.

Best practices for utilizing salary surveys

Selecting and using the right salary surveys is the key. Here are a few best practices to keep in mind:

  • Choose reputable and relevant surveys. To get good data, make sure the surveys use a good sample of employers in your target market and are done by credible organizations. Consider the survey methodology, job matching and data collection process, and the quality of comparators. Ensure the survey fully captures employer practices on salaries and benefits. This is especially important in developing markets where benefits can be a significant part of totalcompensation.
  • Analyze and interpret survey data carefully. Don’t just rely on the raw figures. Understand the data within the context of your organization’s specific needs and goals.
  • Use multiple surveys. To gain a broader perspective and validate your findings, relying on multiple salary surveys from different providers is often helpful.

Tapping Birches Group for labor market data

As we’ve seen, salary surveys are an indispensable tool for promoting equity in compensation. By making the most of salary survey data, organizations can determine if their pay practices are fair and aligned with the labor market.

At Birches Group, we offer comprehensive compensation consulting and salary survey data to help organizations achieve pay equity. Our team of experts can guide you through survey participation, data analysis, and the development of a compensation strategy that fosters equity and supports your organization’s goals. Contact us today to learn more.

Coming next

In the next installment of our Equity in Action series, we’ll walk through developing and implementing pay ranges. We’ll show you how to define and manage these ranges within your internal grading structure to help your organization achieve pay equity.

In the meantime, if you have any questions about workplace equity, please don’t hesitate to reach out to Birches Group. We’re here to support your journey toward a more equitable workplace.

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.

Shield-shaped certification badge for Birches Group displaying "AICPA SOC" in blue with "SOC 2 Type 1 Certified" text below.

Birches Group is Now SOC 2 Type 1 Compliant

Written by Bianca Valencia on . Posted in Uncategorized.

We are proud to announce Birches Group’s achievement on August 15, 2024, of SOC 2 Type 1 compliance, a critical step in our ongoing commitment to data security and privacy. This certification, awarded by an independent third-party auditor, underscores Birches Group’s commitment to maintaining the highest standards of security, confidentiality, and availability for our clients.

What is SOC 2 Type 1 Compliance?

SOC 2 (Service Organization Control 2) is an auditing standard developed by the American Institute of Certified Public Accountants (AICPA) and is widely recognized as the gold standard for companies that need to demonstrate their commitment to data security and trustworthiness.  The SOC 2 Type 1 audit requires rigorous assessments and testing to validate an organization’s ability to protect the security, confidentiality, and availability of its clients’ data.

Achieving SOC 2 Type 1 compliance confirmed that we have implemented the necessary controls and procedures to ensure our systems are secure and our clients’ data is protected.

Why SOC 2 Type 1 Matters

With the ongoing threat of data breaches, it’s critical for companies like Birches Group offering HR management solutions to prioritize security.  We understand the importance of security as our clients trust us with sensitive information, and we want them to rest assured knowing that their data is protected.  We want to thank our clients for their continued trust and support in Birches Group.

Key Highlights of the Certification:

  • Security: Birches Group has implemented robust measures to protect against unauthorized access, ensuring the integrity and confidentiality of client data.
  • Confidentiality: The company has established strict protocols to safeguard sensitive information, ensuring it is only accessible to authorized personnel.
  • Availability: Birches Group guarantees that its systems are reliable and available to meet the needs of its clients, minimizing downtime and ensuring continuous service.

“We are proud to achieve SOC 2 Type 1 certification, which reflects our firm commitment to data security and operational excellence.  This certification is a testament to the hard work and dedication of our team, and it reinforces our promise to provide secure and reliable services to our clients.“

— Jeffrey Slater, Birches Group LLC Co-founder & Partner

Next Steps and our Continuing Journey

Achieving SOC 2 Type 1 involved a detailed process including risk assessments, reviewing policies, and improving our robust security controls. In early 2025, we aim to complete SOC 2 Type 2 compliance, further demonstrating our dedication to data security.

Data security is an ongoing commitment at Birches Group, and we will continue to assess the threat environment, keep abreast of emerging technologies, and adapt our policies, processes, and tools to maintain data security, confidentiality, and availability to provide the best possible service to our clients.

For more information on SOC 2 Type 1 compliance or a copy of our report, please contact us.

Ethiopia’s Birr Devaluation: How Employers Can Address the Crisis

Written by Noel Madolid on . Posted in Uncategorized.

Birches Group delivers expertise on emerging labor markets from around the world, including insights into current trends and events that affect these markets. 

Ethiopia’s central bank allowed the Birr, its local currency, to float or trade freely based on market forces on July 29, 2024. This decision triggered an immediate plunge of about 30% in the Birr’s value against the United States (US) Dollar. According to the Commercial Bank of Ethiopia, the country’s largest lender, the exchange rate had been 57.48 Birr per dollar on July 26, 2024. By August 16, 2024, it devalued further to 103.96 Birr per dollar, a drop of over 80%. 

Understanding the devaluation 

Ethiopia’s adoption of a new exchange rate policy, as reported by the Associated Press and Africanews, marks a historic shift. For half a century, the government maintained control over foreign currency prices.  

The National Bank of Ethiopia introduced this policy change, alongside other reforms, with several key goals in mind:  

  • Curbing the rise of an unregulated parallel market for foreign exchange 
  • Enhancing the country’s appeal to foreign investors 
  • Securing up to US$10.7 billion in financial aid from the International Monetary Fund (IMF), the World Bank, and other creditors. 

Ethiopia, Africa’s second-most populous country, faces severe economic hurdles. It grapples with high inflation rates of approximately 20% and a critical shortage of foreign currency reserves. The Associated Press highlights that the Birr has been one of the weakest currencies in the region in recent months. Moreover, the country defaulted on its debts in December 2023, worsening its economic difficulties. 

Analysts are concerned that Ethiopia’s currency crisis could further stoke inflation and potentially trigger social unrest. Bloomberg notes that Nigeria and Egypt, which partially relaxed controls on their local currencies in 2023 and March 2024 to secure IMF funding, have since grappled with rising prices and growing civil unrest. 

Ethiopia’s move toward a more flexible exchange rate marks a significant but risky step. The government aims to stabilize the economy and attract foreign investment, but the potential for increased inflation and social instability underscores the complexities of this transition. 

What the Birches Group’s Market Monitor reveals 

Based on our review of our Market Monitor reports over the past 12 months, labor market conditions in Ethiopia have significantly changed since August 2024. 

In our Market Monitor, dated August 1, 2024, Ethiopia entered our Six Levels of Volatility at Level Two. Such a volatility level shows dynamic market conditions, with an exchange rate movement exceeding 20% within the last six months. Our tracking shows a 32.8% exchange rate movement in Ethiopia over the past six months. This shift suggests increasing volatility and potentially emerging economic pressures that have begun to affect the labor market. 

In our most recent Market Monitor, dated August 15, 2024, the situation escalated dramatically, with Ethiopia’s volatility level rising to Level Four. This corresponds to a “sudden or unexpected socio-economic event,” which includes a currency devaluation of 50% or more in six months or less, as well as a disjointed and unclear comparator response in our salary surveys. Our tracking now shows a 79.8% exchange rate movement in Ethiopia over the past six months. 

Next steps for employers 

The devaluation of the Ethiopian Birr presents a challenging landscape for employers in Ethiopia. However, decisive and informed action can mitigate the impact on both your workforce and your organization. 

Take immediate action 

The recent devaluation of the Birr has created an immediate need for employers in Ethiopia to adjust their compensation strategies.

For employers that denominate salaries in Birr:

An immediate adjustment is highly recommended. To mitigate the impact of the devaluation on employees’ purchasing power, an increase of 10 to 20% should be applied now. While this does not fully match the prevailing rate of inflation or completely close the gap, it is a significant measure. A 10-20% increase is a substantial adjustment, and staff would appreciate it if they received it tomorrow.

Organizations that have not dollarized now face pressure to raise salaries to stay competitive. This gap of 80–90% compared to dollarized employers will be hard to ignore and will require adjustments. You should make moderate adjustments to start closing the gap without overcompensating, as market conditions are likely to shift over the next 12–24 months. Historically, it takes about 2.5 years for a market to stabilize after a major exchange rate change. Managing these expectations will be crucial. Some organizations may feel compelled to dollarize simply to keep up with others, but if you choose to remain Birr-pegged, you’ll need a strong rationale for both your senior management and staff.

For employers that denominate salaries in US Dollar:

A major risk factor is that employers have effectively lost control of the market position of their pay, which is now determined by the exchange rate of the Birr, not by the supply and demand for talent nor by other compensation market fundamentals. 

Such a drastic adjustment in a short period, especially when it’s beyond your control, poses significant challenges. While staff may enjoy the immediate increase in purchasing power (about 80% more in Birr than a few weeks ago), the real challenge will be managing expectations over the next year or two. The increase of 80–90% far exceeds adjustments made for inflation, which was 26% over the same period. It also surpasses market movement adjustments, which averaged about 20% based on our surveys from July 2023 and July 2024. Our surveys cover a wide range of roles, from general laborers to senior experts, and the general adjustment over the past year was about 20%, roughly aligning with inflation.

Experience shows that those who dollarized are now 80% ahead of the market position from three weeks ago and 90% ahead from a year ago. Such a gap is difficult to justify and maintain. You will face pressure to avoid further significant adjustments while managing expectations in a high-inflation environment, where inflation remains in double digits.

For organizations denominated in hard currency, it’s advisable to cut your losses and transition to Birr as soon as possible. Plan for a long adjustment period of 2 to 2.5 years with relatively low salary increases to avoid being significantly ahead of the market. Manage staff expectations during this period.

Monitor the market regularly 

The economic situation in Ethiopia remains fluid. Employers should stay abreast of labor market changes and adjust their strategies accordingly. Regularly reviewing salary data and the overall economic climate will help ensure compensation packages remain competitive and equitable. Given that Ethiopia is in Level Four, employers should review and update their salary scale three times a year to prevent compensation from lagging or leading the market. 

Avoid dollarization 

In times of currency volatility, the idea of dollarizing salaries can be appealing. But Birches Group advises against dollarization, except in extremely limited cases. Denominating salaries in US Dollars or other hard currencies creates a divide between the international development community and the broader local market. 

Dollarization may seem like a quick fix for your organization’s current challenges, but it can lead to significant overpayment of staff in the long run. As we highlighted to our clients in our August 15, 2024, webinar on the Ethiopia crisis: 

“Dollarized employers will be delivering approximately 80% more in pay today than they were two weeks ago, and over 90% more than one year ago, despite no significant underlying changes in the labor market fundamentals.” 

Once inflation slows down and the labor market catches up, likely within the next two years, organizations that have dollarized salaries will find themselves significantly out of sync with local pay scales. 

While dollarization might offer a temporary sense of stability, it’s a risky strategy that can create more problems than it solves. 

The critical need for a Special Measures Policy 

Employers need a clear plan for navigating the compensation challenges during economic crises. A Special Measures Policy defines how your organization will adapt its compensation approach in a crisis. But, more importantly, having such a policy allows you to act quickly as soon as unexpected volatile events like currency devaluation occur. 

Birches Group partners with organizations to craft Special Measures policies. Contact our team today to learn more.  

More resources 

Birches Group conducted a webinar about Ethiopia on August 15, 2024, attended by over 200 participants. We are happy to make the recording available to clients upon request, and are also publishing an FAQ that summarizes the most common questions and answers discussed during the webinar.

References:

EQUITY IN ACTION: DEVELOP A GRADING STRUCTURE 

Written by Noel Madolid on . Posted in Resources.

In our earlier blog articles on equity, we explored the foundational concepts of pay equity and transparency and the importance of job evaluation. Today, we’ll explore a practical tool that helps bring these principles to life: the grading structure.

A grading structure serves as the backbone of your compensation program. It systematically categorizes roles based on their responsibilities, skills, and value to the company. This clarity in roles and compensation levels not only ensures fair pay but also fosters transparency and trust within your workforce. 

The importance of role clarity before grading 

Before creating your grading structure, conducting a comprehensive job evaluation is imperative. The process involves analyzing each role within your organization to understand its distinct responsibilities, needed skills, and the value it brings to the organization. Well-defined roles are the building blocks of a fair and equitable grading system, preventing ambiguity, overlap, and potential pay disparities. 

Choosing the right grading structure model 

There are three types of grading structures, each with its own advantages and considerations: 

  1. Individual grade levels. This traditional, hierarchical system offers distinct levels for career progression, with promotions tied to skills growth and capacity development. While it can provide clear paths for advancement and is easier to manage, it may also create rigid structures where movement to the next grade requires an increase in salary. 
A diagonal series of colored boxes labeled A to K represents a salary grading structure, with a bold black arrow pointing upward to the right. The colors transition from brown (A) to yellow (K).
  1. Broad-banded grades. This approach features wider salary ranges and fewer levels, emphasizing lateral movement and skill broadening without necessarily increasing pay. It provides greater flexibility for employees to grow in skill or job level within the organization without focusing solely on climbing the ladder. 
A diagram illustrates a five-step salary grading structure, with each gradient-colored step labeled A to E, ascending from bottom left to top right, and a thick black arrow pointing upward.
  1. Project grade levels. This system is designed for organizations that need roles that have short lifespans to reflect the project timing without the possibility of promotion. A structure like this is only appropriate for project-based organizations with fixed-term contracts. Project-based structures often have higher minimums, reflecting the need for employers to reach experienced talent that can “hit the ground running.” 
A diagram with three rectangular blocks labeled A, B, and C. A is blue on the bottom left, B is green in the middle—the highest—and C is yellow on the top right, illustrating a clear salary grading structure.

At Birches Group, we primarily use a robust individual job-level system. Our years of experience in global human resources (HR) have allowed us to define 14 generic CommunityTM Job Levels. Each of the 14 levels, from BG-1 to BG-14, is expressed in milestones of contribution that show differences in depth and complexity. For an in-depth discussion on our 14 CommunityTM Job Levels, download a copy of our job evaluation e-book, Determining Equivalent Worth: The Simplest Approach to Job Evaluation. 

Defining your grade levels 

Once you’ve chosen a model, you can begin grouping roles with similar responsibilities, skills, and value into grade levels. 

The process of defining grade levels involves grouping roles with similar attributes. This ensures that employees with comparable responsibilities and skill sets are placed within the same grade, promoting fairness and transparency. 

Aligning job grades with your organization’s needs 

Your grading structure should reflect your organization’s mission, the relationship between each grade level, and how staff should move from one level to the next. It’s essential to review and adjust your structure every five or so years to keep it aligned with your evolving organization. 

The Birches Group framework 

Birches Group helps organizations create appropriate grading structures that align with their roles and future needs. Our framework is known for its clarity and simplicity, making it easy to create effective and fair grading structures.  

We offer various tools, resources, and consulting services to help you navigate this process and achieve your equity goals. Our grade structure design consulting service mainly focuses on existing roles in your organization, job progression, and the anticipation of more teams or positions to be added. 

Coming up next 

In our next blog post in the equity series, we’ll explore how to use salary surveys to ensure your compensation practices remain competitive and equitable.  

If you’re ready to take the next step in your equity journey, contact Birches Group today. We’re here to guide you through the process and help you build a workplace where everyone feels valued, recognized, and rewarded. 

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.

A group of six people, including men and women, are engaged in a business meeting in a modern conference room. One man in traditional Middle Eastern attire is standing and speaking.

Petrodollar Panic: Separating Fact from Fiction

Written by Noel Madolid on . Posted in Uncategorized.

Birches Group provides insights into global labor market trends and developments, with a focus on events that affect labor markets around the world. 

In June 2024, stories claiming Saudi Arabia didn’t renew a 50-year deal with the United States (US) to keep oil priced in dollars sparked speculation about the petrodollar’s collapse. Online commentators warned this could undermine the US dollar’s status as a hard currency. 

But is there any truth to this narrative? Birches Group is here to cut through the noise and provide human resources (HR) leaders with the facts. 

The myth of the petrodollar agreement 

Contrary to recent speculation, there is no evidence of a formal “petrodollar agreement” between the US and Saudi Arabia. The misconception stems from a 1974 pact signed by US Secretary of State Henry Kissinger and Saudi Prince Fahd bin Abdulaziz Al Saud. However, the pact fostered close economic and military cooperation, not an exclusive oil-for-dollars arrangement. 

MarketWatch reports that the closest thing to a “petrodollar agreement” was a secret deal between the two nations later that year: the US promised military aid and equipment in exchange for Saudi Arabia investing billions of dollars of its oil sale proceeds in US treasuries. Bloomberg News reported the confidential diplomatic cable, obtained from the US National Archives, in 2016. 

While an agreement in late 1974 involved Saudi investment in US treasuries for military aid, this falls short of a formal petrodollar deal. Experts and fact-checkers have confirmed these claims to be inaccurate. 

Why the misinformation spread 

The recent spread of misinformation can be attributed to several factors: 

  • Unverified claims can quickly gain traction on platforms where critical scrutiny is often lacking.  
  • Heightened geopolitical tensions can create a fertile ground for the dissemination of misleading information.
  • Economic uncertainties worsen the issue, making people more susceptible to sensationalist stories that tap into their fears. 

Moreover, the fake news—pushed by “a combination of crypto speculators, gold bugs, and conspiracy theorists”—is an example of confirmation bias among those eager to see the dollar’s decline. Paul Donovan, Global Chief Economist at UBS Wealth Management, adds that “confirmation bias encourages people to ignore what is realistic if their prejudices are seemingly confirmed.” 

The resilience of the US dollar 

The petrodollar’s demise is not as imminent as suggested, and the US dollar’s strength is still secure, Wall Street and foreign policy experts say. 

The dollar’s strength is rooted in an interplay of factors, including the size and stability of the US economy, its role in international trade, and the established trust in its financial institutions.  

Research from the US Federal Reserve System shows that the US dollar’s global popularity doesn’t depend on the goodwill of oil exporters. It’s based on the US’s status as the world’s largest economy and goods importer, with deep, liquid capital markets backed by the rule of law and military power.  

“Saving oil in dollars is not fundamentally what makes the dollar powerful in global trade,” notes David Wight, author of Oil Money: Middle East Petrodollars and the Transformation of US Empire, 1967-1988. “The power of the dollar in global trade is why most oil is sold for dollars.” 

The reality of the US-Saudi relationship 

According to the London-based newspaper The New Arab, US-Saudi relations have improved in recent months. The reality is far more nuanced than a simple oil-for-dollars arrangement—it encompasses security, trade, and diplomatic ties.  

Paul Salem, President of the Middle East Institute, says that Saudi Arabia is looking for a “deeper security assurance and relationship with the US.” However, the geopolitical and economic landscape are very much different from what they were decades ago. 

Mark Finley, an Energy and Global Oil Fellow with Rice University’s Baker Institute for Public Policy, notes that the US economy has a smaller share of the global economy than it was 50 years ago. In addition, Saudi Arabia has recently worked to diversify its alliances, including increasing its ties to Russia and China. 

“Saudi Arabia has ambitions to establish itself as a regional powerhouse, and this involves a complex balancing act,” says Carla Norrlof, a Professor of Political Science at the University of Toronto and a nonresident Senior Fellow with the Atlantic Council. Nevertheless, recent shifts in Saudi foreign policy reflect a diversification strategy rather than a complete abandonment of the US dollar.  

A landmark trade and defense deal 

Amid rumors that Saudi Arabia is not renewing a petrodollar pricing deal with the US, both countries are in fact close to signing a historic trade and defense agreement.

In May 2024, media outlets such as Foreign Policy, NBC News, Reuters, and The Wall Street Journal reported that the two nations are reaching the final stages of a Strategic Alliance Agreement. The treaty would commit the US to help defend Saudi Arabia. In exchange, Saudi Arabia would grant the US access to its territory and airspace to protect US interests and regional partners. 

Fact vs. fiction: The final verdict 

The notion of a formal “petrodollar agreement” is a myth, and the US dollar remains a resilient currency.  

HR leaders must navigate the complexities of the global economic landscape with a discerning eye, separating fact from fiction, to make informed decisions that safeguard their organizations and employees. HR teams should rely on credible resources for information on developments. Additionally, they should keep a close eye on evolving international relations and their potential impact on global business operations. 

References:

EMPLOIS, GRADES, TITULAIRES : COMPRENDRE LES LIMITES DES DONNÉES D’ENQUÊTE ET COMMENT EN ÉVITER LES PIÈGES

Written by Bianca Valencia on . Posted in Uncategorized.

Les enquêtes salariales sont un outil important pour les ressources humaines. Les organisations ont besoin de ces enquêtes pour gérer et maintenir les rémunérations de manière adéquate chaque année. Toutefois, les méthodes d’enquête peuvent varier considérablement d’un fournisseur à l’autre, notamment en ce qui concerne les informations collectées, la méthode d’appariement des postes et le traitement et la présentation des données relatives à l’employeur.

Avant de décider quelles données d’enquête utiliser, il est essentiel que les praticiens des ressources humaines se familiarisent avec le type d’informations que chaque enquête fournit, la méthodologie qui sous-tend l’analyse et les limites qui accompagnent chaque approche. Voici quelques points à garder à l’esprit pour aider les organisations à éviter les erreurs typiques en ce qui concerne les enquêtes salariales :

  • Les limites liées à l’utilisation des données sur les emplois – dans notre article intitulé « Mesurer la position sur le marché », nous avons expliqué que l’on a accordé trop d’importance à certaines professions, simplement parce qu’elles sont considérées comme des « emplois en vogue ». Mais la variance des professions n’est pas aussi importante qu’on le pense, surtout lorsqu’on se penche sur les enquêtes salariales.  En effet, lorsque vous mettez à jour votre échelle salariale, vous mettez essentiellement à jour vos niveaux de grade, et les niveaux de grade sont génériques, ils ne sont pas basés sur les professions. Les données relatives aux emplois peuvent constituer une référence supplémentaire utile pour approfondir les données du marché. Mais il est important de noter que ce ne sont pas ces données qui influencent l’échelle des salaires, mais les données relatives aux niveaux de grade.
  • Les limites liées à l’utilisation des données sur les titulaires – nous avons mentionné dans plusieurs de nos articles précédents à quel point les données sur les personnes en place peuvent être trompeuses lorsqu’elles sont utilisées comme référence pour les données d’une enquête. De nombreux employeurs pensent que si une enquête salariale fait état des salaires réels des titulaires, les données du marché sont en quelque sorte perçues comme plus « exactes ». Au Birches Group, nous pensons que les données sur les échelles de salaires, et non sur les titulaires, offrent une vision plus stable et plus réaliste du marché du travail. Les salaires des titulaires sont basés sur la personne et dépendent fortement des qualités de l’individu qui occupe ce poste. Lorsque l’on travaille avec les salaires des titulaires, il est courant de trouver des valeurs aberrantes qui faussent considérablement les données globales du marché parce que leurs salaires individuels sont influencés par d’autres facteurs distincts du poste. Mais lorsque les échelles salariales deviennent la référence, cela donne une image plus précise de l’évolution du marché et sert de bornes qui empêchent les valeurs aberrantes dans l’analyse.
  • Les limites liées à l’utilisation du seul salaire de base – certains employeurs, lorsqu’ils étudient les données d’une enquête salariale, ont tendance à fonder leur analyse sur les seules informations relatives au salaire de base. Cette approche pose problème car, sur la majorité des marchés du travail dans le monde, le salaire de base n’est qu’une composante de la rémunération réelle d’un employé. Pour être considéré comme un employeur de choix, il faut prendre en compte l’ensemble des avantages sociaux, qu’ils soient en espèces ou en nature, ainsi que les pratiques du marché en matière d’avantages non salariaux, tels que la retraite, les soins médicaux, etc. Sur certains marchés, les avantages sociaux ont un impact important sur le recrutement et la fidélisation. Dans d’autres pays, certains avantages sont obligatoires, d’autres sont culturels, d’autres encore répondent à des difficultés locales.

Birches Group mène des enquêtes sur les rémunérations et les avantages sociaux dans plus de 150 pays à travers le monde. Notre approche multisectorielle est conçue pour les marchés en développement à forte croissance, où les principaux employeurs déterminent les tendances et les pratiques du marché local. Nous recueillons des données dans une perspective de rémunération totale, car dans nombre de ces marchés, le salaire de base n’est qu’une partie de la réalité. En outre, comme les marchés en développement sont volatils, nos enquêtes utilisent les données relatives aux échelles salariales afin de fournir à nos participants une vision plus précise du marché, liée à l’objectif du poste et non à son titulaire. Enfin, nos enquêtes sont mises à jour trois fois par an, en avril, juillet et octobre, ce qui garantit à nos clients des données actualisées à chaque fois. Contactez-nous pour en savoir plus sur notre enquête sur les rémunérations et les avantages sociaux dans votre pays.

Want to know if your existing compensation practices have the elements of a good compensation program or if there are areas that could use some improvement? Take our quick Compensation Program Assessment Quiz

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.

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

Cost of Labor

POURQUOI LE COÛT DU TRAVAIL DOIT GUIDER VOTRE RÉMUNÉRATION

Written by Bianca Valencia on . Posted in Uncategorized.

Garantir une rémunération équitable du personnel est un véritable exercice d’équilibre. En tant que leader sur le marché du travail, votre organisation souhaite attirer et retenir les meilleurs talents tout en restant dans les limites du budget de rémunération.

Les responsables des ressources humaines utilisent une série de facteurs pour établir et régler les salaires. Les deux facteurs les plus courants qui guident les stratégies de rémunération sont le coût du travail et le coût de la vie. Le coût du travail reflète la valeur marchande d’un emploi spécifique. En revanche, le coût de la vie reflète les dépenses nécessaires aux salariés pour maintenir un certain niveau de vie dans un lieu donné.

Il y a un débat en cours sur quel facteur est le plus important. Faut-il baser son salaire sur la valeur du marché pour une fonction (coût du travail), ou bien le statut civil et le niveau de vie d’une personne doivent-ils dicter le salaire (coût de la vie) ?

Cet article de blog soutient que vos stratégies de rémunération doivent être guidées par le coût du travail pour une approche plus juste et plus durable. Voyons pourquoi le coût de la vie n’est pas une référence fiable et, surtout, pourquoi le coût du travail devrait occuper le devant de la scène.

Pourquoi le coût de la vie n’est pas fiable

Certaines organisations utilisent le coût de la vie pour fixer les salaires. Cependant, cette méthode n’est pas assez équitable. Voici quelques raisons pour lesquelles l’utilisation du coût de la vie peut être trompeuse :

Désuet et imparfait. Bien qu’il soit traditionnellement utilisé pour ajuster les salaires, le coût de la vie est fortement influencé par les circonstances individuelles, ce qui en fait une mesure peu fiable. Des facteurs tels que l’état civil, le nombre de personnes à charge et les habitudes de consommation peuvent affecter de manière significative le coût de la vie d’un individu. Le fait de baser les salaires uniquement sur le coût de la vie ne reflète pas la valeur réelle de l’emploi sur le marché du travail. 

Biais de localisation. L’utilisation du coût de la vie crée un biais géographique. Mais la localisation ne devrait pas dicter la valeur d’un travail. Un spécialiste du suivi hautement qualifié dans un bureau local peut être payé considérablement moins qu’un collègue moins expérimenté au siège, simplement en raison de l’endroit où il travaille. 

Défis liés à la définition du coût de la vie. Définir un coût de la vie juste et précis représente un défi. Contrairement à une mesure fixe, il varie considérablement car le montant nécessaire pour vivre confortablement peut varier considérablement d’une personne à l’autre. Même au sein d’un même pays, les gens peuvent avoir des habitudes de dépenses et des choix de consommation très différents, rendant impossible l’établissement d’une norme unique. 

Sans rapport avec le travail. L’objectif premier de la rémunération est de payer le personnel en échange de ses services. Cependant, le coût de la vie met l’accent sur des circonstances personnelles sans rapport avec l’objectif du travail. Il ne détermine pas la valeur d’un emploi sur le marché du travail, alors pourquoi l’utiliser pour déterminer les salaires ?

Un changement de perspective

Les employeurs doivent se rappeler qu’il n’est pas de leur responsabilité de maintenir le mode de vie de leur personnel. Un salaire compétitif doit permettre au personnel d’atteindre un niveau de vie décent, mais les choix individuels et leur situation financière influencent considérablement cette équation. 

Mieux encore, se concentrant sur le coût du travail assure la clarté et la transparence. Vous avez la capacité de communiquer votre politique de rémunération et le montant que vous êtes prêt à payer pour des postes sur vos marchés cibles.

L’importance du coût du travail

Bien que le coût de la vie semble être une façon compatissante de structurer les salaires, il ne permet pas de mettre en place un programme de rémunération équitable et durable. Voici pourquoi se concentrer sur le coût du travail est la meilleure approche, et souvent la seule, qui compte :

Objectivité et transparence

Justification des donateurs. Pour les organisations à but non lucratif qui dépendent du financement des donateurs, le coût du travail fournit des données précises et objectives pour justifier les salaires. Les donateurs attendent une utilisation responsable des fonds, et l’utilisation du coût du travail comme référence montre que les salaires sont basés sur la valeur du marché du travail. Le coût de la vie n’offre que peu de justification dans ce scénario.

Attirer les bons talents. Pour attirer les bons talents possédant les bonnes compétences dans le secteur privé, il faut comprendre la valeur du marché. En comprenant les tendances salariales et les pratiques de rémunération pour les fonctions et les niveaux de grade sur leurs marchés cibles, les organisations peuvent élaborer des offres compétitives. 

Durabilité

Clair et axé sur le travail. Le coût du travail se concentre sur la valeur du travail lui-même. Il tient compte des données du marché pour des postes de valeur équivalente, ce qui garantit l’équité et la clarté pour attirer et retenir les talents dont vous avez besoin.

Des décisions éclairées et un alignement budgétaire. En comprenant vos coûts de rémunération à travers le prisme du coût du travail, vous pouvez prendre des décisions mieux informées qui s’alignent sur votre budget et votre identité de marque sur le marché du travail. Se concentrant sur le coût du travail permet également de procéder à des ajustements plus stratégiques en cas de ralentissement économique ou de périodes de troubles sociaux, ce qui favorise la viabilité à long terme.

En conclusion

Nous recommandons de fixer les salaires en fonction du coût du travail, c’est-à-dire du montant payé par d’autres employeurs sur le marché du travail pour des fonctions identiques ou similaires. Cette approche consiste à fixer les salaires sur la base de données d’enquêtes sur le marché du travail fondées sur une évaluation simple et claire des emplois, qui évolue indépendamment du coût de la vie et est influencée par l’offre et la demande sur le marché du travail.

Contacter le Birches Group

Baser les salaires sur le coût du travail est un élément essentiel d’un cadre de rémunération bien conçu, mais ce n’est qu’un début. Il faut également obtenir de données crédibles sur le marché, telles que des enquêtes salariales, pour évaluer votre position sur le marché.

Restez au fait des tendances du marché du travail. Accédez à nos enquêtes salariales complètes et utilisez nos données pour prendre des décisions éclairées en matière de rémunération. Nous publions trois fois par an des données actualisées sur le marché du travail dans plus de 150 pays, ce qui vous permet de disposer des informations les plus récentes pour répondre à vos besoins en matière de gestion des talents.

Contactez Birches Group dès aujourd’hui pour en savoir plus sur nos enquêtes salariales et sur les avantages qu’elles peuvent apporter à votre organisation.

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.

regularly participating in salary surveys

POURQUOI LA PARTICIPATION RÉGULIÈRE AUX ENQUÊTES SALARIALES EST VITALE POUR VOTRE ORGANISATION

Written by Bianca Valencia on . Posted in Uncategorized.

Définir une rémunération compétitive n’est pas un jeu de devinettes, c’est une stratégie. Mais sans données actualisées sur le marché du travail, vous risquez de sous-payer ou de surpayer les talents, de susciter le ressentiment ou d’épuiser les ressources.

Les enquêtes salariales sont vos points de repère. Ces outils dévoilent les tendances du marché et vous aident à établir des rémunérations justes et éclairées qui attirent les meilleurs talents, stimulent le moral et créent une excellente image de marque pour l’employeur. En participant régulièrement à des enquêtes salariales, votre organisation obtient une vue d’ensemble du marché du travail et une perspective plus large qui vous permettent de prendre des décisions informées en matière de rémunération.

En participant chaque année à des enquêtes salariales, vous investissez dans l’équité et dans les pratiques salariales fondées sur des données. Même si votre organisation n’a pas encore besoin d’une révision salariale, la participation à une enquête salariale annuelle vous permet de vous tenir au courant des tendances sur le marché du travail et d’établir un budget adéquat lorsque les salaires doivent être mis à jour. 

Obtenez des informations sur les pratiques salariales compétitives et assurez votre place en tant qu’employeur de choix. Cet article de blog vous guidera à travers l’importance des enquêtes salariales et les avantages d’une participation régulière. Laissez-nous tracer le chemin de votre organisation vers la clarté en matière de rémunération.

Comprendre les enquêtes salariales

Avant d’aborder les avantages, il convient de simplifier le concept.

Les enquêtes salariales permettent de déterminer les tendances en matière de rémunération dans les différents secteurs ou sur les marchés du travail. Ces enquêtes collectent des données sur une série de facteurs, notamment le salaire de base, les primes et les avantages sociaux et les analysent afin de mettre en évidence des points de référence utiles pour différentes fonctions et différents niveaux d’emploi.

Les informations tirées de ces enquêtes sont inestimables, car elles permettent à votre organisation de connaître sa position sur le marché et d’apporter les ajustements nécessaires à sa stratégie de rémunération.

En participant régulièrement à des enquêtes salariales, vous vous assurez également que vos données sont toujours à jour. Cela vous permet de suivre les tendances du marché et de réagir rapidement aux changements. En outre, ces enquêtes fournissent une vue globale des rémunérations dans le secteur, ce qui permet à votre organisation d’élaborer une stratégie de rémunération compréhensive et compétitive.

Utiliser efficacement les enquêtes salariales

Pour pouvoir utiliser effectivement les données fournies par les enquêtes salariales, il convient de faire un pas en arrière et de se poser une question essentielle : “Qui sommes-nous en tant qu’employeur ?”. La réponse façonne votre Employee Value Proposition (EVP)* et définit votre position unique sur le marché du travail. Celle-ci englobe deux aspects essentiels :

  1. La composition du marché cible. Qui sont vos concurrents en matière de recrutement ? Identifiez les entreprises dont la taille, le secteur d’activité et le marché sont similaires et qui serviront de comparateurs pertinents dans vos enquêtes.
  2. Position sur le marché cible. Où voulez-vous vous situer en termes de compétitivité salariale ? Voulez-vous vous situer dans la moyenne du marché, attirer les meilleurs talents avec un salaire plus élevé, ou être prudent sur les coûts avec un salaire inférieur à la moyenne ?

Les enquêtes salariales ne sont qu’une boussole. Elles fournissent des données très utiles, mais c’est votre politique de rémunération qui détermine vos décisions.

  1. Utiliser des critères cohérents pour les comparateurs. Utilisez toujours les mêmes facteurs pour sélectionner les comparateurs, ce qui garantit des comparaisons précises et fiables.
  2. Trouver le juste milieu. Identifiez votre percentile cible en fonction de votre EVP. Souhaitez-vous faire partie des 10 % les plus performants pour attirer les employés les plus performants, ou vous sentez-vous à l’aise dans la médiane pour pouvoir gérer les coûts ?
  3. Aligner l’EVP. Concevez vos pratiques de rémunération en fonction de votre EVP, en offrant des avantages et des structures salariales qui correspondent au vivier de talents que vous recherchez.
  4. Adapter la rémunération en fonction du marché. Tenez-vous informé des tendances du marché et des offres des concurrents révélées par les enquêtes salariales. Utilisez ces données pour apporter des ajustements éclairés à votre système de rémunération, y compris le salaire de base, les primes et les avantages sociaux.

En fin de compte, votre budget de rémunération et votre position sur le marché cible sont les principaux moteurs de votre structure salariale. Les enquêtes salariales constituent un outil précieux pour calibrer vos offres, rester compétitif et attirer les talents dont vous avez besoin.e your offerings, stay competitive, and attract the talent you need. 

Récolter les fruits de la participation régulière

La participation aux enquêtes salariales n’est pas qu’une simple case à cocher ; c’est un investissement dans la réussite de votre organisation. Une participation fréquente aux enquêtes salariales offre de nombreux avantages :

Le benchmarking compétitif

Pour rester compétitif sur le marché du travail, vous devez savoir comment votre rémunération se situe par rapport à celle des meilleurs. En participant régulièrement à des enquêtes salariales, vous pouvez:

  • Identifier les lacunes. Une fois que vous avez déterminé le niveau de compétitivité que vous souhaitez atteindre sur le marché que vous avez choisi, les enquêtes peuvent vous aider à mettre en évidence les domaines dans lesquels votre rémunération est inférieure, ce qui vous permet d’ajuster les stratégies de votre organisation.
  • Connaître votre position sur le marché. Comprenez comment vos salaires se comparent aux moyennes du secteur et aux leaders du marché. Êtes-vous en tête du peloton ou à la traîne ?
  • Rester à l’avant-garde. Prévoyez les tendances en matière de rémunération (salaires et avantages sociaux) et adaptez de manière proactive la rémunération totale afin de conserver les meilleurs talents et d’attirer de nouvelles recrues.

En utilisant les informations fournies par les enquêtes salariales, vous pouvez vous assurer que votre organisation reste un employeur attractif, ce qui vous permettra de gagner la bataille pour les talents.

Equitable et juste

Participer régulièrement à des enquêtes salariales contribue à promouvoir l’équité et la justice salariales. En profitant des enquêtes salariales, vous pouvez :

  • Combler l’écart de rémunération. L’équité consiste à s’assurer que vous payez pour le rôle et non pour la personne. Éliminez les écarts de rémunération et garantissez l’équité interne. Utilisez les données des enquêtes salariales plutôt que l’historique des salaires de la personne pour informer les politiques de gestion des rémunérations, afin de créer un lieu de travail où tout le monde est récompensé équitablement.
  • Élaborer une structure plus équitable. Utilisez des informations fondées sur des données pour ajuster votre échelle salariale, en garantissant l’équité et l’alignement sur les normes du secteur.
  • Instaurer la confiance et la transparence. Une communication ouverte et des décisions salariales fondées sur des données favorisent une culture de la confiance et du respect, ce qui conduit à un environnement de travail plus positif.

Investir dans des enquêtes salariales, c’est investir dans votre personnel et dans la réussite de votre organisation. En garantissant une rémunération équitable et transparente, vous pouvez constituer une main-d’œuvre plus motivée, plus engagée et plus inclusive, ce qui se traduit par des résultats positifs pour tout le monde.

Prendre des décisions éclairées en matière de rémunération

Les enquêtes salariales peuvent être votre secret pour élaborer une stratégie de ressources humaines gagnante qui attire, retient et libère tout le potentiel de votre personnel. 

En participant chaque année à des enquêtes salariales, vous pouvez améliorer vos pratiques de rémunération en vous permettant de regarder au-delà des chiffres. Si le salaire est essentiel, les enquêtes salariales peuvent vous aider à évaluer ce que les salariés valorisent – des modalités de travail flexibles, des possibilités d’apprentissage et de développement, ainsi que des programmes de reconnaissance et de récompense. 

Concevoir des programmes de rémunération qui vont au-delà du salaire. Si la rémunération est le principal attrait de l’entreprise, sur certains marchés, des avantages sociaux adaptés peuvent également contribuer à maintenir votre avantage concurrentiel.

Les enquêtes salariales sont une mine d’informations et d’analyses qui ne demandent qu’à être découvertes. En exploitant leur puissance, vous pouvez élaborer une stratégie de rémunération qui attire et conserve les meilleurs talents.

Attirer et retenir les meilleurs talents

Attracting and keeping staff needs a data-driven, strategic approach. Gone are the days of generic offers Attirer et conserver le personnel nécessite une approche stratégique fondée sur des données. L’époque des offres génériques et des solutions uniques est révolue. Les organisations doivent cultiver l’EVP convaincant qui trouve un écho auprès des talents qualifiés. 

  • Devenir un employeur de choix. Proposer des enquêtes salariales compétitives et des avantages sociaux attrayants, fondés sur des données d’enquête fiables, attire les meilleurs talents et renforce votre image de marque et votre réputation d’employeur.
  • Personnaliser vos stratégies. Utilisez les résultats des enquêtes pour comprendre les attentes de votre public cible en matière de rémunération et adaptez vos stratégies de recrutement et de fidélisation en conséquence. 
  • Prévoir et prévenir le taux de rotation. Identifiez les risques potentiels en comparant vos rémunérations à celles proposées par les leaders du marché pour des postes similaires. En ajustant votre offre en fonction des données les plus récentes, vous pouvez maintenir l’engagement et la motivation de vos employés.

L’exploitation d’enquêtes salariales solides n’est pas seulement une bonne pratique, c’est un avantage concurrentiel. Comprendre les taux du marché vous permet d’élaborer des programmes de rémunération convaincants qui attirent les candidats ciblés et garantissent l’équité interne. Le résultat ? Une plus grande satisfaction des employés, une réduction du taux de rotation et une main-d’œuvre plus dynamique.

De l’information à l’action

La participation régulière à des enquêtes salariales vous permet de prendre des décisions éclairées en matière de rémunération, d’attirer et de retenir les meilleurs talents et de cultiver une organisation saine et performante. Ne passez pas à côté de cette ressource inestimable. Birches Group fournit des données sur le marché du travail dans plus de 150 pays et nous sommes là pour vous aider. Inscrivez-vous dès aujourd’hui à nos enquêtes salariales complètes et assurez le succès futur de votre organisation ou prenez contact avec nous pour en savoir plus.

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.

equivalent worth

EQUITY IN ACTION: START BY ESTABLISHING EQUIVALENT WORTH

Written by Kai Donesa on . Posted in Resources.

In the first blog of our equity series, we showed that equity emphasizes fairness, consistency, and transparency in compensation. Now, we shift our focus to the practical steps organizations can take to translate the discussion surrounding equity into tangible action.  

Achieving equity in the workplace goes beyond good intentions and adhering to a set of principles. It hinges on establishing a clear, objective understanding of the equivalent worth of different jobs within your organization. This entails evaluating each role based on the purpose, responsibilities, and complexities inherent in the work. And that’s where the invaluable tool of job evaluation—a process for assessing and comparing jobs—comes in. 

The foundation: Job evaluation 

Job evaluation is a systematic process used to determine the equivalent worth of various jobs within an organization. It is the foundation for achieving equity. The process involves organizing and understanding the vast array of roles that make your company function, creating a clear picture of how they relate to each other.  

Why does job evaluation matter so much? Because it plays an essential role in establishing a fair and equitable workplace: 

  • Fair compensation. Job evaluation helps ensure employees are paid fairly for the work they do, based on the complexity, purpose, and responsibilities of their roles. 
  • Clear career progression. Clear career progression hinges on defining job hierarchies and relationships through job evaluation, which is critical for determining the appropriate job level. This establishes a transparent framework for career progression. Staff can then understand how their current roles fit into the bigger picture and can tailor a roadmap for the steps they can take to grow within your organization. 
  • Equity and fairness. Job evaluation helps identify potential equity issues, such as pay disparities between similar roles. A fair and equitable workplace recognizes employees who contribute and deliver more to their jobs and the organization. Staff who contribute more through their growth in skills and knowledge, even if they are in the same job grade, can be recognized through higher pay within the range. 
  • Objective benchmarking. Job evaluation enables organizations to fairly compare their compensation program against the wider labor market.

The cornerstone: Establishing equivalent worth 

Job evaluation isn’t simply about ranking jobs from “highest” to “lowest.” It’s about understanding the value different roles bring to fulfill your organization’s mission. It provides a common language to discuss the complexity and impact of various roles, fostering better understanding across departments and teams. 

Moreover, job evaluation provides a structured and justifiable approach to determining and managing compensation, ensuring internal equity, helping your organization comply with pay equity laws, and showing a strong commitment to fair treatment for all employees. 

Bringing clarity: Hierarchical relationships 

Job evaluation establishes a hierarchy of roles within your organization, informing the creation of job grades and salary ranges. This is a critical step towards achieving equity, as it brings a structured approach to your compensation program.  

Similar roles, based on their inherent value to the organization, are grouped together. These groups are then assigned specific pay ranges, ensuring that employees performing work of similar complexity receive comparable compensation, regardless of their occupation, tenure, or background.  

A structured approach to compensation management fosters a sense of internal cohesion and transparency and promotes trust in the compensation program. Establishing hierarchical relationships helps staff understand how their pay is determined and relates to other roles in the organization, reducing the potential for misunderstandings and perceptions of inequity. 

Birches Group’s job evaluation approach 

At Birches Group, we understand that traditional job evaluation methods can be complex and time-consuming. That’s why we’ve developed a unique approach that considers only three factors: 

  • Purpose: Why does this job exist within the organization?
  • Engagement: How does this job communicate and collaborate with internal and external stakeholders to carry out its function? 
  •  Delivery: How does this job plan, organize, and deliver work to fulfill the organization’s mission? 

Our approach is simple, consistent, and easy to understand. It focuses on the complexity and impact of the work itself, rather than just job titles or vague descriptions. This ensures a comprehensive and accurate assessment of job complexity, enabling you to make informed decisions about compensation.

The journey to equity continues 

Job evaluation is the essential first step toward building a compensation structure that is fair, transparent, and competitive. Birches Group’s job evaluation approach provides a clear, unbiased path to establishing equivalent worth for every role within your organization. 

In our upcoming blog post, we’ll explore the next critical step: building a grading structure that aligns with your job evaluation assessments and organizational needs. In the meantime, we invite you to schedule a call with our experts to discuss your job evaluation needs and challenges.  

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.

achieving equity

EQUITY IN ACTION: INTRODUCING OUR FIVE-STEP APPROACH TO ACHIEVING WORKPLACE EQUITY

Written by Kai Donesa on . Posted in Resources.

Equity has become a central conversation point in human resources (HR). But it’s no longer enough to simply talk about the importance of a fair and just workplace—the demand for concrete action is stronger than ever. Organizations are now being held accountable for putting those ideals into action. And while the importance of achieving equity is widely acknowledged, many organizations struggle to put discussions and understanding into action.

The challenge lies in the lack of a clear roadmap. Often, organizations don’t have a solid framework and the necessary tools to address equity concerns. This can lead to ad hoc approaches that yield inconsistent results and unfair outcomes.

At Birches Group, we understand organizations’ challenges in embracing and attaining equity. That’s why we’ve developed a comprehensive five-step approach to achieve equity in compensation management.

In this blog series on equity, we’ll be introducing our five-step approach to achieving equity. We’ll explore each step, equipping you with the framework and tools you need to move beyond rhetoric and create a more equitable workplace. Discover how to transform equity from a buzzword into a reality within your organization.

The problem of inequity

Inequity within an organization’s compensation structure is a persistent issue with far-reaching consequences. It demotivates staff, creates a sense of unfairness, and ultimately hinders an organization’s ability to attract and retain top talent. Here are some of the most common examples of inequity we see:

  • The gender pay gap. Women, on average, continue to earn significantly less than men for comparable work.
  • Locale-based pay inconsistencies. Employees performing the same job in different locations can receive significantly different salaries based solely on geography.
  • Occupation-based pay biases. Certain occupations may be systematically over or undervalued compared to others.

Unfortunately, traditional pay practices have often fallen short, exacerbating equity issues:

  • Using salary history when setting starting salaries. This perpetuates existing pay gaps by anchoring starting salaries to potentially biased historical data.
  • Determining pay increases based solely on time or tenure. By simply rewarding staff for the time spent at an organization, organizations may be overlooking employee performance or the value the staff brings to their role.
  • Relying solely on “pay for performance.” While performance should be a factor, this can be subjective and susceptible to bias. Another reason “pay for performance” shouldn’t be used is because staff performance isn’t always a consistent measure year after year.
  • Differentiating pay based on occupation instead of job grade level. Some organizations believe certain functions or occupations (such as IT) should be paid higher because they’re considered “hot jobs.” However, salaries must be examined based on the job’s grade level within a salary scale.
  • Ad hoc succession planning. When promotions and development opportunities are determined subjectively by managers, it can perpetuate personal biases.

These traditional approaches are often reactive and fail to address the root causes of inequity. 

As more states and countries enact pay transparency laws, organizations need a framework and tools not only for ethical reasons, but also for legal compliance and building a truly equitable workplace.  

The Birches Group approach

At Birches Group, we understand that achieving workplace equity requires a clear, objective, and systematic approach. We believe that fair compensation isn’t just about salary numbers; it’s about ensuring that every employee feels valued and recognized for their contributions.

Our framework: building a foundation of fairness

Our framework is built on the fundamental principle of establishing the equivalent worth of each job within your organization. This is achieved through a consistent job evaluation process that considers the skills, knowledge, and responsibilities required for each role.

When organizations have a standardized method to objectively assess jobs across different grades and units, it becomes the cornerstone for aligning other HR functions. This includes job design, salary benchmarking, recruitment, pay movement, and performance evaluations.

Steps toward an equitable compensation program

Here is how our five-step approach works:

  • Start by establishing equivalent worth. Begin by conducting a comprehensive job evaluation that accurately assesses the complexity and value of different roles within your organization. This evaluation process will create a clear hierarchy of positions, setting the stage for the next step.
  • Establish a grading structure. Once the distinctions between roles are established, develop a structured grading system to categorize them effectively. This grading structure will become the backbone of your compensation strategy.
  • Utilize salary surveys. Leverage the job evaluation and grading structure to conduct a thorough analysis of external market conditions through salary surveys. Our extensive database of compensation and benefits surveys spanning over 150 countries provides valuable insights for benchmarking against sectors.
  • Develop pay ranges. Establish well-defined pay ranges for each grade, ensuring they align with your internal job evaluations and external market data. This ensures that compensation is both externally competitive and internally equitable and sensible.
  • Implement fair pay management mechanisms. With the job evaluation, grading structure, and pay ranges in place, it’s time to implement a transparent and equitable system to manage employee progression within these ranges. This includes clear criteria for promotions, raises, and bonuses, all based on objective and well-defined skill stages and expectations.

We emphasize consistent and precise methods for evaluating jobs, managing salaries, and assessing staff performance. This ensures that everyone has the same opportunities for advancement and is evaluated based on the same objective criteria.

What sets Birches Group apart

What truly sets Birches Group apart is our focus on:

  • Skills-based compensation. We move beyond traditional approaches that rely on tenure or subjective performance evaluations. Our framework recognizes employees for the skills and knowledge they bring to the table.
  • Data-driven transparency. We use our compensation and benefits surveys of over 150 countries to help organizations inform their pay strategies based on comprehensive labor market information, ensuring that compensation decisions are fair, objective, and defensible.

What’s next

Achieving equity in the workplace isn’t just a moral imperative; it’s a strategic advantage. The Birches Group approach offers a precise and data-driven framework for building a compensation system that rewards contributions.

Stay tuned for the next installment of this blog series on equity, where we’ll explore key aspects of our five-step approach in detail. With our insights and tools, learn how to transform your compensation practices and other HR programs to achieve lasting equity within your organization.

If you’re ready to see what equity can look like for your organization, schedule a call with our team.

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.

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