Determining a starting salary can be a challenge for organisations – how can you be sure you’re hitting the mark, especially in a rapidly changing environment where entirely new roles are being created? How can you balance the requirements of your budget with candidate expectations?
There are a number of factors to consider when putting together a competitive salary package for new hire – here are some tips to help you finalise the figures.
Explore the market
The best way to determine if a salary is competitive is to know what the competition is paying.
Amber Johnson, HR manager at technology company Envato, says industry benchmarking can give you confidence that the salary you offer is in line with the market.
“We look at regular industry benchmarking across all roles to see what the corresponding salary is likely to be,” she says.
“We also have annual reviews of all our internal salaries and make sure that we benchmark at that stage to allow for increases to catch up with changes in the market.”
Consider the skills set
No two candidates are identical in terms of the qualities they may bring to a role.
Randy Wandmacher, HR Lead at Accenture Australia and New Zealand, says placing a value on specific skills and experience can help you set a starting salary.
“When determining someone’s salary, we look at a candidate’s specific skillset – is it an emerging skill or a generic skill,” he says. “We also take into consideration their years of experience and the previous companies or industries they have worked for.”
Johnson adds that when it comes to salaries for a specific job titles, there should always be room to move. “There's always a range within every role and you set the salaries based on where candidates fit based on their skills and experience,” she says.
Think beyond the dollars
Money matters, but what else do candidates look for in an employers? SEEK’s Laws of Attraction research shows that candidates in industries such as healthcare and medical, for example, rank work-life balance as their greatest motivator. Salary and compensation is their second priority.
“If people can work in a way that suits their life, it’s considered a huge bonus,” says Johnson. “Our employees aren’t tied to the office – they can work from home or they can even work from overseas for three months a year. We also offer the opportunity to buy additional annual leave.”
At Accenture, flexibility is also part of the package.
“Arrangements include working from home, flexible working hours, part-time work and job sharing,” says Wandmacher. “Balancing work and personal life is so important.”
John Meehan Account Director of Robert Walters’ Banking and Financial Services team, says that many candidates now expect flexibility as part of the job, so employers should consider adding additional benefits to the overall package.
“We are finding that more companies are looking for ‘extras’ to make a salary packages more competitive,” he says. “This includes health insurance, volunteer leave, equal maternity and paternity leave, on-site child support and even food.”
At Envato, for example, the company’s financial success is shared with all staff. It recently increased its profit share with its 300 employees from $US1 million in 2016-17 financial year to $US1.2 million in the current financial year.
“Many of these additional benefits have a clear financial value,” says Meehan. “They can really create a more enticing salary package.”