It’s important for your business to understand how much you should pay your employees. Determining the market rate is a big part of that—so how do you go about it?
Well, you can call us on 0800 028 2420 for immediate guidance on the issue.
You can also check out our HR tools and services to see how they can help your business.
There’s also this guide on salary benchmarking in the UK and how you can use this process to work out the common industry rates.
What’s salary benchmarking?
It’s the process of gathering information on wages and benefits for your industry and the various roles you’re offering.
Basically, it helps to determine how much you should be paying a member of staff in a specific role.
And why is salary benchmarking important? Here are the main reasons:
- If you don’t do the research, you may end up paying an employee too much—or too little.
- You also don’t want to lose members of staff to businesses paying more competitive wages, so you can also consider it as a way to fend off competitors.
- During your recruitment process, it helps to attract the best candidates by offering the right wage—or higher to stand out from competitors.
You can take a step further than salary benchmarking by comparing national average salaries and analyse job role seniority with pay and benefits reports.
Reward and recognition reporting includes job evaluation checks, to ensure each role you have provides value to your organisation.
Peninsula Business Services can help
Employee wages are an important part of retaining staff and matching industry standards.
Since 1983, our business consultancy has helped tens of thousands of SMEs pay the right salaries to staff.
Getting the right payroll advice can help your business retain more employees and attract top talent. It also helps to save your business time and money by doing the right research to find the right amount to offer.
Speak to us for immediate help with any HR or payroll topic—you can request a call back and we’ll be in touch with you as soon as possible.
Remember, your recruitment strategy is an essential part of your annual operation. And an essential component of a successful process is to make sure you’re offering the right wage.
How to salary benchmark salaries in the UK
In 2019, the average UK salary (according to the ONS—Office of National Statistics) was £36,611 for full-time employees. For part-time staff it was £12,495.
Where each member of staff fits in and around those stats will depend on a variety of factors. Such as the:
- Type of role.
- Level of experience.
- Whether it’s full or part-time.
- Your business’ budget.
- What sort of benefits you can offer.
It’s good business practice to offer as close to the standard industry wage as possible—and that’s where salary benchmarking will help you.
The main part of the process involves researching—data sources and even benchmarking tools can assist you there.
Alternatively, you can simply have a quick tour across job sites to have a look at what wages are on offer for certain wages.
For example, web developers are in high demand these days—a quick look online and you’ll find out the standard rates across other businesses.
Recruitment consultants can provide salary surveys for the “going rate” across your industry.
If you have an HR department, you can turn to them for assistance for the data. Or you can outsource it elsewhere.
Ultimately, it’s good business practice to have a database of common salaries and update those on an annual basis.
That can serve as your template for new starters, as well as a quick resource to check when looking to offer pay rises and benefits.
So, as you can see, there’s no set salary benchmarking process. But you can take the following routes:
- Data sourcing across job sites, competitors, recruiters, and business consultants.
- Tasking your HR department with researching industry rates.
- Maintaining, and updating, a database of standard rates for roles.
- Using salary benchmarking software to help with your process.
Need our help?
We’re here to help—get in touch and we’ll provide you guidance through your pay benchmarking process: 0800 028 2420.