Are Your Salaries Competitive and Commensurate with Current Market Rates?

The Best Candidates Have Options, And They Know It!

It’s increasingly common for candidates to have more than one choice when making a career move. With the increase in inflation, HR managers must be ready to address the question of pay fairness to win the best candidates.

Organizations that don’t adjust salaries to match inflation and meet market rates run the risk of higher staff turnover as employees take the easiest route to earn more in this current competitive job market.

Money Matters!

If you have identified a top candidate you want to hire, offer him/her fair pay. HR managers should know the salary range for the position they are hiring before posting job ads and be willing to be flexible with financial terms to win the candidate. Interestingly, most candidates know their value and the market-rate salaries for the positions they seek.

Because of the high demand for employees, workers are pickier than they used to be. Feeling valued and respected are top priorities; they may leave jobs for opportunities that offer better overall compensation packages. Attractive packages include:

• Growth potential
• Better workplace flexibility
• Access to childcare
• Positive culture with properly trained managers
• Support of work/life balance

So, getting salaries right will be crucial for employers in 2023. If “hiring the right people” and “employee productivity and performance” are among your organization’s top concerns in the new year, you need to be confident that you are paying competitively and rewarding employees for their efforts and output. Hiring the right people starts with getting the job description right, as well as offering salaries and benefits that are competitive for the position.

Beware, however, in paying higher salaries for new hires without increasing pay for tenured workers. Doing so could result in pay compression and current employees leaving, so you must maintain internal pay equity. Pay equity also results in stronger business performance.

Pay increases were higher than average in 2022 (over 4 percent) and are looking to be higher again in 2023 (possibly as high as 5 percent) to account for inflation.

Pay Transparency

Job-seeking candidates, especially younger generation workers, love to see pay ranges in job ads. When this information is unavailable, many job seekers will avoid applying for a job that may not meet their salary goals. (Note: As of January 1, 2023, California employers with at least 15 employees must list salary ranges for jobs.)

Being transparent with the salaries you pay will build a stronger employer brand with a reputation for valuing employees. That is how you “hire the right people” and increase “employee productivity and performance,” even in an economic downturn.

Conclusion

Offering a competitive salary and benefits package will be critical to hiring the best talent in the new year. You will retain and engage top talent by managing pay increases, making market adjustments, and giving bonuses. Indeed, reward the behavior you want to see, or your employees will take their talents elsewhere.

Our team at ALIGN will guide you on attracting and retaining top candidates and avoiding losing a great prospect to a competitor over a few thousand dollars. Call us!