Ghana’s Cost of Living Crisis: What You Need to Know

Ghana’s Cost of Living Crisis: What You Need to Know

Written by Bianca Valencia on . Posted in Uncategorized.

Birches Group has been keeping an eye on economic conditions in Ghana and wants to provide updates on recent developments in the West African nation. 

One of West Africa’s more prosperous countries has been rocked by a cost-of-living crisis. Inflation in Ghana reached 29.8% in June 2022, the highest level in two decades. The Guardian reports that food prices have risen by 30.7% since last year, and energy costs have sharply climbed. Transportation costs have also gone up. 

Our August 1 Market Monitor further indicates that the Ghana cedi has seen an exchange rate movement of 34% against the US dollar, Euro, British Pound, and West African CFA Franc in the past six months. As inflation persisted and broadened, hundreds took to the streets of the capital Accra to protest the deteriorating economy. 

President Nana Akufo-Addo has stressed that the economic challenges the country is facing are the effect of the COVID-19 pandemic and the war in Ukraine. The government is seeking a support package from the International Monetary Fund (IMF), which visited Ghana in July. In a July 13 statement, the IMF said that such adverse developments “have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation.” 

What the labor market indicates 

The Ghanaian labor market exhibits rapidly evolving market conditions. Birches Group’s Market Monitor categorizes labor market conditions according to levels of volatility, with Level One as the lowest (reporting standard market conditions and market movement between 0–20%) and level six as the highest (where the country has reported labor market collapse, departure of most comparators from the market, and absence of reliable data on currency and inflation). In our latest Market Monitor, Ghana is classified as Level Three, where there are rapidly evolving market conditions, movement of more than 40% in the last 12 months, and multiple reviews and revisions are typical amongst comparators. While the surge of inflation has been swift in the country, labor market data has not moved as fast.  

Based on our salary survey analysis, no labor market movement was observed in July 2021.  

The chart above shows labor market movement in Ghana against reported inflation rates from July 2021 to July 2022 based on Birches Group’s multi-sector salary survey. As seen in the chart, labor market movement significantly increased in 2022, but inflation rates have always been much higher and moved at a faster rate from 2021. We believe this is because inflation or the cost of living is not directly proportional to the cost of labor. 

Next steps for employers 

When labor market conditions become volatile, such as in Ghana, organizations should establish policies and procedures to keep pay programs functioning and maintain business continuity. Through a Special Measures Policy, organizations need to determine the appropriate triggers based on labor market conditions that demand an update in salaries and benefits. Organizations must also decide how they plan to implement the next steps for their staff. Employees need to know that they can count on their employer to assist them amid the burgeoning crisis. 

How can we help 

We at Birches Group have extensive expertise in developing Special Measures Policies for organizations across different markets and sectors. Contact us today to find out how we can create one for you. 

References: 

  • 1 August Market Monitor Report 

AVOIDING THE GREAT RESIGNATION: HOW EFFECTIVE TALENT MANAGEMENT STARTS WITH GOOD JOB DESIGN

Written by Kai Donesa on . Posted in Resources.

What is the Great Resignation? Avoiding the Great Resignation, can companies or organizations do it? The trend of mass resignation can’t entirely be attributed to the pandemic, and some might even argue it isn’t a true phenomenon. But one cannot deny the number of recent resignations mostly stemming from employee dissatisfaction.

Because of the sudden shift in the work dynamic brought by the pandemic, employees have started thinking about what they truly value. Many questioned whether they were okay with companies returning to the way things were. Others questioned if there was a ‘normal’ to return to after the last two years. But for many of these employees, there was no going back. Let’s look at some of the reasons people resigned:

  1. Lack of Autonomy – Employees want the freedom to work in a way that suits them. They want to make decisions without their managers or supervisors looking over their shoulders. Being micromanaged doesn’t communicate trust and can be highly demotivating. It also takes away the sense of accomplishment the employee can get from putting in hard work.
  • Burnout – Staff are physically, emotionally, and mentally exhausted. They work long hours, and the work doesn’t give them any sense of accomplishment. Employees often struggle to find their purpose in the organization and focus on putting in the hours. Add a long commute and external stressors, and it’s a perfect recipe for burnout.
  • Inadequate Compensation and Benefits – Many cite low pay or lacking benefits as reasons for resigning. While having a competitive salary is always attractive, many now look for flexible work hours, output-based work systems, paid leaves, and work-from-home options. According to an article by LinkedIn on remote work, employers that offer remote or flexible work are better positioned to attract talent in a post-pandemic world. Work flexibility has become a top priority for employees when considering a new job.

Avoiding Employee Dissatisfaction and Being Part of the Great Resignation

Organizations can avoid employee dissatisfaction and being part of the Great Resignation through a purpose-driven organizational framework. We at Birches Group believe that organizations of all sizes and industries can improve employee satisfaction using a simple integrated method that starts with the job description.

Most organizations do not grasp the integral role that job descriptions play and how it facilitates several core HR functions. Clear, consistent, and purpose-driven job descriptions allow employees to shift from time-based work to one focused on purpose and outputs. When employees understand their work, they don’t need to be micromanaged by their supervisors. Employees can be empowered to make their own decisions and be trusted to do the job.

While it doesn’t seem like the obvious solution, clear, consistent, and purpose-driven job descriptions impact every aspect of human resources and workforce management. By taking this first step, organizations have the flexibility to structure their work model into a hybrid where employees can work from home when they need to and come to work to collaborate. At the same time, this addresses burnout. Working from home allows employees the freedom to work in a way that works for them and their lifestyle. Organizations can measure the work of their people through their outputs and focus on their staff’s skills development. Looking over the employee’s shoulders is no longer necessary. Gone are the days when employees need to clock in and out to prove they are working efficiently.

Because the importance of job descriptions is often overlooked, very few managers and HR practitioners are trained on how to write good job descriptions. Job descriptions should be more than just a checklist of things to do. A list focuses on process and individual tasks. In contrast, a good job description focuses on the role’s purpose and output.

Create Clear, Consistent, and Purpose-driven Job Descriptions in Three Easy Steps

As part of Birches Group’s larger Community™ approach and platform, our Job Design tool provides organizations clarity and ease in describing work. A good job description can be written in three steps:

Step 1: The Mission Statement – The mission statement is crucial, connecting the role to the organization’s larger mission and emphasizing why the job matters. It gives context to the role by describing the unit it belongs to, the broad function of the unit, and the position of the role in supporting the unit and its organizational objectives.

Step 2: The Functional Statements – The functional statements describe the intended functions and focus of the role. Organized using our three Community™ factors—Purpose, Engagement, and Delivery—we offer guide questions and a lexicon of verbs, so each statement aligns with the appropriate grade level.

Step 3: The Skills and Qualifications Profile – The profile describes the level of generic expertise required for the role. This expertise can be specialized knowledge, experience in related fields, and language requirements that could facilitate the recruitment process for the role.

Through these three simple steps, our Community™ Job Design tool provides organizations a way to craft clear and consistent job descriptions that can easily be adapted according to the role’s job level and unit.

Good job descriptions help organizations address employee satisfaction and engagement issues because every employee wants to know their work matters. Through this first step, organizations pave the way to build an integrated, comprehensive model of work where employees know their contributions are valued.

To learn more about our Community™ Job Design tool and how it can help you create clear, consistent, and purpose-driven job descriptions, contact us.

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.

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

UNDERSTANDING TOTAL COMPENSATION

Written by Kai Donesa on . Posted in Resources.

In Birches Group, we apply a total compensation approach when analyzing salary survey data.  While we understand that many employers are primarily interested about how their base salaries compare against other comparators, we should not forget that benefits also play an important role in many markets, particularly in developing countries.

For many years, Birches Group has been conducting salary surveys in over 150 countries around the world. Our experience working with high growth markets has shown us that when employers center their decisions on base salary alone, they are essentially discounting the value benefits have in that market and its possible impact on staff recruitment and retention.

If you are working with developing market data, here are three reasons why total compensation is the best approach:

  • Pay Packages Can be Varied – Every organization has its own pay policy. This policy then guides how organizations design their pay packages. Depending on how competitive they want their salaries to be, the types of benefits they can include, and their target peer group, you can imagine how varied pay packages can be in just one single country. In some markets, benefits could be government mandated, some could be cultural, and others could address local market conditions. If all these benefits are provided by majority of your target comparators, then it would not be enough to compete on base salaries alone.
  • Market Practice – As mentioned, some benefits are considered statutory, while others are cultural in nature. It is the responsibility of the employer to know what the local market practice is and tailor their pay policy around this. Not only do you have to abide by what the law states, but also some benefits are given for historical reasons. Concentrating on just cash could make you fall short in the point of view of your staff.
  • Being Competitive – Not all organizations compete the same way. Some companies like to have competitive base salaries but not provide many benefits, while others may not have competitive base salaries but offer very attractive benefits. The only way HR can properly determine competitiveness is through a total compensation view. We believe that it is important for employers to have a “healthy” mix of base salary, cash, and in-kind benefits at every level, where pay packages are competitively aligned to your market but still following internal policy.

Birches Group surveys are designed with developing markets in mind. Our survey reflects employer practice for a wide variety of allowances and benefits, both cash and in-kind, demonstrating nuances commonly found in these markets. And because developing markets are dynamic, every country is updated on an ongoing basis three times a year, in April, July, and October. Contact us to access the survey data that you need.

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.

JOBS, GRADES, INCUMBENTS: UNDERSTANDING THE LIMITATIONS OF SURVEY DATA AND HOW TO AVOID SURVEY DATA PITFALLS

Written by Kai Donesa on . Posted in Resources.

Salary surveys are an important HR tool. They are necessary for organizations to properly manage and maintain compensation every year. However, survey approaches can differ greatly from one provider to the next, particularly in the information they collect, their approach to job matching, and their treatment and presentation of employer data.

When deciding which survey data to use, it is essential for HR practitioners to familiarize themselves with the kind of information that each survey provides, the methodology behind the analysis, and the limitations that come with every approach. Here are some things to keep in mind to help organizations steer clear of typical salary survey missteps:

  • Limits When Working with Job Data – in our article, “Measuring Market Position”, we explained that too much emphasis has been placed on certain occupations just because they are considered ‘hot jobs.’ But occupational variance is not as significant as you think, especially when looking at salary surveys, because when you update your salary scale, you essentially update your grade levels – and grade levels are generic, not based on occupations. When looking at survey data, job data can be a useful additional reference if you want to look deeper into the market data. But it is important to note that job data is not what impacts your salary scale, but grade level data.
  • Limits When Working with Incumbent Data – we have mentioned in a few of our past articles how incredibly misleading incumbent data can be when used as a survey data reference. Many employers believe that if a salary survey reports actual incumbent salaries, the market data is somehow perceived as more ‘accurate’. In Birches Group, we believe that salary range data, not incumbent data, provides a more stable and realistic view of the labor market. Incumbent salaries are person-based, highly dependent on the qualities of the individual sitting in that position. When working with incumbent salaries, it is common to find outliers that significantly skew the overall market data because their individual salaries are influenced by other factors separate from the job. But when salary ranges become the reference, this provides a more accurate picture of market movement and serves as bookends that prevent outliers in the analysis.
  • Limitations When Working with Just Base Salary – some employers, when looking at survey data, tend to rest their analysis just on base salary information. The problem with this approach is that in majority of labor markets around the world, base salary is only one component of an employee’s actual compensation. To be considered as an employer of choice, you will need to look at the full package, and that includes benefits – cash and in-kind – as well as market practices on non-salary benefits such as pension, medical, etc. In some markets, benefits have a big impact when it comes to recruitment and retention. In other countries, some benefits are mandatory, some cultural, while others address local hardships.

Birches Group’s conducts compensation and benefits surveys in over 150 countries around the world. Our multi-sector approach is designed for high growth, developing markets where leading employers determine local market trends and practices. We capture data from a total compensation perspective because in many of these markets, base salary is only part of the picture. Additionally, because developing markets are volatile, our surveys make use of salary range data to provide our participants a more accurate movement of the market that is linked to the purpose of the job, not the incumbent. Lastly, our surveys are updated three times a year, every April, July, and October which guarantees our clients fresh data every time. Contact us to learn more about our Community™ Compensation and Benefits Survey in your country.

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.

FIVE STEPS TO IMPLEMENT COMMUNITY™ SKILLS

Written by Kai Donesa on . Posted in Resources.

In our previous articles, we have shared the powerful and versatile capabilities of the newest solution from our Community™ integrated approach and platform, Community™ Skills. In this article, we will go over the five steps needed to implement Community™ Skills in your organization. This innovative tool allows organizations to manage and build their capacity by measuring the skills of their workforce, tailor learning and development plans around explicit measures at every grade level and skill stage and be able to objectively recognize skills growth through pay movement, prepare for their staff’s promotion, and so much more.

So, perhaps you’re thinking, “Sounds great! But how exactly do I implement this? Where do I even begin?” “Does it really only take five steps to implement Community™ Skills in my organization?” Because there are several HR functions that will need to be aligned to the Community™ Skills approach, this undertaking will take a bit of effort. But we, at Birches Group, have gone through this process ourselves, and here are some of the steps that we have taken to get everyone on board:

  • Align your organization’s job evaluation and pay structure to Community™ – To implement any Community™ solution in your organization, we must start with your jobs. Through Community™ Jobs, we will evaluate and align your job structure to our fourteen Birches Group job levels which will be the same levels used once you carry out your Community™ Skills assessments. Once your job levels have been aligned, our five Skills stages can then be arrayed against the pay range at each grade and the corresponding pay increments can be tailored to follow your organization’s policy on pay movement and frequency of skills assessment rounds.
  • Community™ Skills training with managers – Now that you’ve aligned your jobs and pay structure to the fourteen Birches Group job levels and five Skills stages, managers will need to be trained on the concepts behind the Community™ Skills approach and a briefing for them to use the tool. Birches Group is on hand to organize this for any organization to ensure that there is a shared understanding of the principles of each skill stage and the six indicators among all supervisors.
  • Conducting your first Community™ Skills assessment round – Once all managers have been trained on the methodology and platform, HR is now ready to conduct the first skills assessment round. Managers will assess each of their staff according to their evaluated job level and all results will be collated and stored in our Community™ system. Birches Group can assist in generating individual and overall reports. HR can then calibrate the results to ensure alignment in the assessments before presenting recommendations to management.
  • Tailoring learning and development plans – Simultaneously, managers can also begin tailoring individual learning and development plans for each of their staff. Each development plan should focus its activities to help the employee advance to the next skill stage or grade level, their assignments and metrics should align with each of the six indicators, and the timeframe in between assessments should also be determined.
  • Communicating assessment results to staff – once assessment recommendations have been approved and respective movements in pay have been taken into consideration, it is time for managers to communicate the results to their staff. At this stage, it is crucial for managers to be clear about how each employee was assessed, the impact on their salaries, and their follow-up development plans. At the same time, employees can also take equal ownership and provide suggestions to supplement or refine their development plans further. This way, assignments and metrics can be more attainable for staff in between assessment rounds.

The first round of skills assessments for any organization will, indeed, be a period of adjustment. HR has a role to play in making sure that the process that went into the assessments, creating the development plans, identifying promotion readiness, and pay movement are all being communicated clearly to staff. But with the structure and transparency our Community™ Skills tool provides, staff discussions around these critical talent management activities can now be done with ease. We hope that enumerating these five steps to implement Community™ Skills gives a clear pathway on how to get started. Contact us to see a demo of our Community™ Skills tool and how your organization can get started.

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 to know your score!

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.

COMMUNITY™ SKILLS – THE HR SWISS ARMY KNIFE

Written by Kai Donesa on . Posted in Resources.

Birches Group’s Community™ Skills is a groundbreaking solution that radically changes the way organizations manage human resources. Like the well-known Swiss Army knife, Community™ Skills is so versatile that it can support different human resources activities using one simple and integrated approach.

In a previous overview of our Community™ Skills solution, we described how our methodology, with its five Skills stages and six indicators, can easily be adapted to an organization’s pay ranges and facilitate pay movement based on actual skills growth of staff, measure the capacity of its entire workforce, and help managers tailor learning and development assignments to enable movement of staff deeper into their grade or to the next skills stage.

Because Community™ Skills links the pay movement of staff with their growth in skills and experience, this approach can also be readily incorporated into other areas of HR from recruitment to succession planning. Here are other ways where Community™ Skills can support your HR program:

  • Establishing Fair and Equitable Hiring Practices

During recruitment, Community™ Skills makes it possible for managers to target the right candidate they need by allowing them to define the appropriate skill level required for a role. From the five Skills stages, managers can select from the first three skill levels, Basic, Proficient, or Skilled, depending on the level of skill they need. And because assessments are purely based on the candidate’s skill level, setting starting salaries during the recruitment process becomes simpler, more objective, and easily justifiable.

  • Aligning Skills to Pay

With the five stages of knowledge mapped across the different points in the salary range, Community™ Skills makes it possible for organizations to fully utilize their salary ranges and manage pay clearly and objectively. As staff build skills, they move across the stages driving movement in pay within their salary grade. Personal biases such as gender, race, etc. will have no impact on the increase that an employee receives.

The illustration above can be applied to most grade levels.

Staff development can be tailored at every job level to be able to push out more of the work that is essential to the organization’s success.

  • Tailoring Learning and Development Assignments for Employee Growth

Through Community™ Skills, tailoring learning and development plans become a collaborative effort between the manager and staff. Because each skill stage is explicitly defined, employees can equally take ownership of their progress by providing feedback or suggestions that will tailor their initiatives to advance their skills growth.

  • Prepare for Career Pathing

Skills ratings inform managers about promotion readiness, providing objective criteria for succession and promotion decisions.

Never has there been any other solution that can address so many HR needs with just one approach. Community™ Skills not only seamlessly connects what used to be separate HR functions, but also links each of them in a way that any organization can adapt and design their respective strategies around. Contact us to learn how Community™ Skills can work for your organization.

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.

BIRCHES GROUP’S COMMUNITY™ SKILLS MODEL

Written by Kai Donesa on . Posted in Resources.

Through our Community™ Skills model, organizations can finally recognize and explicitly measure an employees’ growth in skills, knowledge, and experience – their abilities to perform their job.

In Birches Group, we believe that when organizations are able to explicitly measure their employee’s accumulation of knowledge and experience, this can serve as the foundation to ensure transparency and equity for other critical talent management functions such as managing pay movement, recruitment, learning and development, succession planning, and more.

The problem is, many organizations have always applied separate approaches and tools in managing each of these critical HR activities. This is an issue because none of these approaches align with each other or even share the same standards…but not anymore.

In Birches Group, we’ve developed a better approach, and it’s simpler than you think!

Community™ Skills

The Birches Group solution for measuring knowledge and experience is Community™ Skills. Community™ Skills measures the stages of skills and knowledge linked to the Birches Group Community™ job levels.  We have developed explicit measures for each job level using the same factors and indicators that form the basis for our job evaluation methodology.

The Same Three Community™ Factors

Community™ Skills is part of our larger integrated HR management approach and platform, Community™, wherein the same three factors – Purpose, Engagement, and Delivery – are also used to assess each employee across the same fourteen Birches Group levels. A description of each of the three factors can be found in our previous Community™ article, “Just Three Things: How Purpose, Engagement, & Delivery Can be Used to Understand Your Organization and Support Your HR Programs” and how these three factors serve as the common standard of measure across all our Community™ solutions.

The Six Indicators

Each Community™ factor is then divided into two indicators. The factors and indicators are job-based and can be applied to any kind of role in any occupation in a generic manner.

For Purpose:

  • Conceptual Knowledge – What is the conceptual focus and complexity in the design of solutions? For rules-based transactions, what is the complexity of the data or information handled?

  • Applied Knowledge  – What is the breadth of managerial or project/program oversight? What is the extent of supervisory or process management as part of a larger functional service?

On Engagement:

  • Internal – What is the collaborative role within the functional team? What is the depth and breadth of information provided to the team?

  • External – What is the advisory role with other functional teams or external clients? What is the depth and breadth of information provided to other functional teams or external clients?

And for Delivery:

  • Timeliness – Efficiency: How are resources deployed against project/program needs and cycles? How are process schedules maintained to strengthen service responsiveness?

  • Quality – Effectiveness: What is the measurable impact of interventions or the functional unit? How are quality metrics maintained throughout service execution.

The Five Skills Stages

Community™ Skills uses the job levels established within an organization as the basis for defining progressive Skills Stages, which can be used to measure the continuous growth of an employee within their job. In short, it provides an explicit measure of “experience” rather than relying on time as a proxy. In our Skills tool, we have identified five Skills Stages at each grade level:

  • The Basic stage reflects the minimal acceptable understanding of the job.  Employees in this stage are capable of addressing simple issues in standard operational settings.
  • The Proficient stage reflects the level of understanding of work where more complex issues can be addressed and the employee can adapt to most operational settings, including more complex ones.
  • The Skilled stage is achieved with a complete conceptual understanding of the job and the ability to be effective in all types of operational settings.
  • The Advanced stage shows the level of knowledge that enables a high degree of independence in the job and reflects a broad understanding of concepts which overlap with the next higher grade level.
  • The Expert stage indicates the highest level of understanding of the job and overlaps significantly with the next higher grade level. The level of understanding found at the master stage also allows for advising on process and systems improvements and the mentoring of others, which in turn results in better outputs and stronger capacity.

These Skills Stages were developed using the Birches Group Community™ Jobs approach as the underlying foundation.

With six Indicators and five Skills Stages, there are a total of thirty (30) milestones to measure skills and knowledge per grade.

Using these thirty milestones, a Skills assessment can be recorded over time. Staff may progress through the stages at different rates across the different indicators as this reflects the natural competencies of people relative to areas where they have skill, and how quickly or slowly their Skills grow.

As managers and supervisors observe the Skills growth of their staff, critical HR functions such as pay adjustments and determining the readiness of staff for the next grade or assignment becomes clear, transparent, and objective.

Community™ Skills makes it possible for managers to measure skills, knowledge, and experience through explicit stages and indicators making this one of the most innovative HR tools yet. Contact us to learn how Community™ Skills can work for you.

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 to know your score!

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.

WHY YOU NEED TO ASSESS THE SKILLS OF YOUR EMPLOYEES

Written by Kai Donesa on . Posted in Resources.

Organizations typically provide a range of pay for each job. And what these pay ranges represent is the value an organization places on experience within a grade level. Traditionally, pay ranges are divided into steps or increments awarded on a fixed calendar schedule. When an employee moves up a step, this usually indicates satisfactory performance was achieved. But what often happens is that organizations move staff through the steps simply because another year has passed.

While the general belief is that over time, with experience, the value of work carried out by an employee should increase, we know this isn’t always the case. Organizations can have staff who have been in their roles for ten years but only show minimal progression or improvement in their quality of work. Other times, an employee can be in a job for less than two years, but they learn fast and deliver timely and quality outputs proving an increase in tenure does not always equal an increase in the value of work.

The question managers and supervisors should ask is, “How can we measure experience without relying on time or tenure as a proxy?” “And if we continue to award pay increases each year to staff, how can we determine that the knowledge of our staff also grows at the same pace?”

The lack of an approach to move staff through the pay range continues to be a challenge for many organizations. And while the alternative approach to steps applied by many organizations is to use merit increases as a basis to manage pay movement, we know that this approach is just as flawed.

In our article, Pay for Performance is HR’s Biggest Epic Fail, the problem with using performance as the basis for pay movement is that it rewards an employee’s one-time achievement through a salary increase even if we know that their performance may not be the same the following year. Further, the rubric designed to determine increase differentials among staff is often so minimal that it has no impact and does little for employee retention.

We all know performance management can be tedious and difficult. But we all also know that they are important. So, what’s the alternative? In Birches Group, we have a different approach, and it is simpler than you think!

WHY SHOULD YOU ASSESS YOUR EMPLOYEES’ SKILLS?

We believe that pay movement should be linked to skills growth and knowledge. It is known that as one learns and develops further into their roles, they acquire more experience and skills that allow them to deliver faster, better-quality work. And because skills are accumulated and cannot be unlearned, there is a sustained value to the organization making it a more reliable basis for salary increases.

But beyond pay management, assessing the skills of your staff will also greatly support your organization’s strategies around capacity building and career development. Knowing the skill level of your entire workforce enables managers to identify and create the necessary initiatives that will help close existing skills gaps and facilitate the movement of staff, either deeper into their grade or promotion to the next higher level.

In our next articles, we will go deeper into our approach to measuring skills and how it can support many of your talent management programs from pay movement, learning and development, and recruitment and career planning. Contact us to learn more.

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 to know your score!

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.

BUILDING YOUR SCALE: IMPLENTING YOUR NEW SCALE

Written by Kai Donesa on . Posted in Resources.

Now that your salary scale and benefits package is ready, the final step is implementing your new scale and communicating the changes to your teams. Equipped with your analysis and overall cost implications against your budget, you will now need to secure the necessary approval from management.

When seeking approval, begin by presenting any existing issues with the current salary scale and the challenges your salaries are facing against the external market. Take management through your process when you built your new salary scale, making sure to highlight:

  • The chosen salary survey you used as a basis
  • Your chosen set of target comparators that met your criteria
  • The difference of your existing salaries against your target market position
  • The steps you have taken to address the current issues and build future capacity
  • The overall cost

Finally, you also need to present to management your implementation plan and the timeframe that it will require, so they can assess the entire impact of the new scale.

Once approval has been granted, the next step is communicating the changes to staff. This is a crucial process because you will need to equip your managers with the right information for them to relay later to each of their teams or units. When discussing the changes with your staff, keep these in mind:

  • Discuss the work that went into building the salary scale and be clear on the company policy that supports the steps you have taken. This will ensure that your managers will be ready to answer any questions or reactions their staff may have.
  • Be clear about your implementation plan, what staff can expect, and when. This way, you can manage everyone’s expectations and hopefully have them feel excited about the changes that are soon to take place.

With the steps we have shared on implementing your new scale, we hope this has provided you with the insight you need to get started in designing your own pay structure. Birches Group is always ready to help organizations create a salary scale that will work for them. Contact us to learn more.

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 to know your score!

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.

BUILDING YOUR SALARY SCALE: ADJUSTING YOUR SCALE

Written by Kai Donesa on . Posted in Resources.

Now that you’ve created your salary scale and examined your benefits package; the next step is adjusting your scale. Refining your scale will be a trial and error process until you get as close to your target as possible. There are several factors that will affect the impact of your scale, both externally and internally, so it is crucial to keep these in mind every step of the way.

When we think about external factors that affect the impact of your salary scale, factors such as average market movement, your budget, the number of incumbents per grade level in your organization, as well as the overall cost all need to be considered. When you start allocating adjustments for each grade level in your scale, using the average market movement and your budget, you can start adjusting your scale’s minimums and maximums, while keeping the number of incumbents per grade level in mind. Once you have gotten as close to your target market position as possible, check if your adjustments are all within budget. If not, keep adjusting and tweak where necessary.

While adjusting your pay ranges, you also want to keep in mind the issues that your existing salary scale has and how your changes will best address them. Are your hiring rates competitive at the job levels where you need more capacity? Do any of your existing staff fall below your current hiring rates? Similarly, do you have staff that are currently paid beyond the maximum salaries of their grade level? Do you make use of your salary ranges per grade level or do you find many of your staff clustered in certain points in each grade? Remember, adjusting your salary scale is not simply about updating salaries following market movement. It is also about making corrections where you know there are inefficiencies in the current pay structure.

Just as important as reaching your target market position and being competitive externally, is your team’s internal cohesion. Once you have reached your desired salary scale results, give it another look to see if everything makes sense. Pay close attention to your internal parameters, such as the progression from one grade level to the next, and see if the overlaps are reasonable. Examine your spans – the difference between your minimum and maximum salaries – as well and see if they align with the nature of each job level within your organization. Also, you will need to see how each of the adjustments you made will affect staff at every grade level. Checking for fair internal cohesion will ensure strong staff engagement to which they can tailor their development and build their careers over time.

Designing and refining salary scales is both a technical exercise and a sensitive one. As managers in human resources, we must realize that without an efficient salary structure in place, along with a solid job structure, achieving a strong engaged workforce will always be a challenge. And while we know that the salaries we set will not always make everyone happy – someone will always want higher pay, someone will challenge your chosen set of target comparators, and perhaps ask why they cannot have more benefits – what is important is making sure that the policies that went behind designing the salary scale is clear and communicated to staff. To learn more about how Birches Group can help you design a salary scale fit for your organization’s needs, contact us today.

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 to know your score!

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.