Market analysis is an extremely effective tool for employers to both retain and attract the best possible candidates. It allows you as the employer to benchmark yourself in the area of the market where you believe your remuneration strategy would be best suited.
Remuneration can be broken down into various elements, in most instances these can be measured against the market under two different categories – Basic Pay and Total Cash. Basic pay is purely the basic pay/salary portion of remuneration. Total cash is built up of the basic pay and any other variable elements such as bonuses etc. In Private Equity and Asset Management you would also typically see long/medium term incentives such as carried interest, deferred awards etc.
In addition to market analysis Employers can evaluate jobs. The evaluation of jobs allows you to create an efficient remuneration and benefits structure based on the importance of particular roles within the organisation as well as a very good tool to assist in development, talent management and succession planning. The evaluation of jobs can be achieved through two common methods:
1) Analytical Evaluation which analyses the job using various weightings for common elements found in roles. These could be elements such as the required Knowledge, Skills or level of responsibility required to perform the role. Each job is assessed resulting in a final score for each of them. These scores then form the basis for any grading structure. The most commonly known system for evaluating jobs is the “Hay” system, this is commonly recognised as a sound and robust system for evaluating jobs. Analytical job evaluation is the only method of Job Evaluation which can strongly uphold any disputes based around discrimination on the basis of pay.
2) Non-Analytical Job Evaluation does not analyse jobs using weightings and doesn’t use any form of calculations in deriving at its evaluation. Instead it uses areas such as the market to dictate the value and importance of a job.
No matter which method of evaluation is used the overall objective is still to achieve some form of structure in your development, succession and compensation & benefits strategies. By introducing a grading system both you and your employees will be able to have a clear and transparent understanding of where they are in the organisations grading structure, what salary range and benefits they may receive at the various levels and what might be expected of them to move through the grades.
Benchability can assist you with:
- Developing your remuneration strategy
- Compiling and analysing your business/staff against benchmark data
- Compile remuneration committee documents
- Job evaluation
- Introduce a grading system
- Succession Planning