87.54% of employers in the Philippines adhere to the mandated minimum wages, demonstrating their commitment to fair compensation practices.
However, to remain competitive and attract top talent, employers need to keep up with the salary trends in their industry.
This is crucial as generous compensation packages particularly entice 16.8% of Filipino candidates to pursue or accept a job offer. Moreover, 80% of employees say they would stay with their organizations if offered improved salaries and benefits.
Based on Sprout's report, "The State of HR 2023," most industries saw a slight decrease in average wages between 2022 and 2023. While average salaries remained relatively consistent across most sectors, cost-cutting measures may have severely affected the BPO sector.
The healthcare sector also experienced declining average salaries due to evolving reimbursement models and regulatory shifts.
These salary trends can pose a challenge for most employers, where top talent is lost to other companies or even competitors due to better pay.
Consequently, companies may encounter the challenge of attracting new hires willing to accept lower salaries, leading to an overall decline in average wages.
To address this issue, organizations should consider offering comprehensive compensation packages with attractive benefits, career growth opportunities, and initiatives promoting work-life integration.
That's where salary benchmarking tools come in. These tools provide employers with a wealth of data and insights, allowing them to compare their company's compensation structure with their peers and competitors.
These tools also assist in determining pay scales for new positions, planning for salary increases, and identifying disparities in pay that need to be addressed.
Thus, investing in a robust salary benchmarking tool can significantly impact an employer's ability to attract, retain, and fairly compensate their workforce.
Benefits of Using Benchmarking Tools for a Modern HR Strategy
Salary benchmarking tools can be invaluable for any Human Resources (HR) department in today’s competitive job market.
This data-driven approach helps employers make informed decisions about attracting, retaining, and motivating their employees.
Here are some of the main benefits of using a salary benchmarking tool:
Hire and Retain Top Talent
Based on a Gartner survey, only 32% of employees believe their compensation is fair. This lack of perceived equity in pay may lead to decreased employee engagement and potentially increase the likelihood of them seeking employment elsewhere.
Salary benchmarking tools can help employers identify the interests and needs of their top talents, increasing employee engagement, satisfaction, and motivation. Companies with a high employee engagement rate are more productive by 21% and produce better quality output than those with lower engagement rates.
Furthermore, these tools can help organizations pinpoint where to invest more to attract highly skilled employees.
Companies will have the upper hand in the job market by having competitive pay practices and maintaining attractive salaries for current and prospective employees.
Ensure Pay Equity within an Organization
In our country, a study conducted by the Philippine Institute for Development Studies (PIDS) in 2022 reveals that women in digital jobs earn 18.4% less than men, which shows a similar pattern.
Ensuring pay equity within an organization is ethically correct and beneficial for long-term sustainability.
Organizations can use salary benchmarking tools to establish and uphold fair and transparent wage systems by gaining insight into the corresponding job markets. This can potentially lessen wage disparities and guarantee impartial compensation for employees.
Additionally, it can help ensure that all employees are fairly compensated, regardless of gender, race, or other protected characteristics.
Save Time and Money
Salary benchmarking tools leverage existing data, eliminating the need to create new figures. By adapting numbers from elsewhere, the benchmarking process becomes more streamlined.
This eliminates the need for expensive surveys and intricate wage negotiations and allows organizations to allocate more resources to key areas of their business.
As a result, valuable time and money are saved, as the field is already narrowed down, and salary offerings can be aligned with competitors.
What to Look For in a Salary Benchmarking Tool
Salary benchmarking enables companies to make informed decisions based on data, eliminating guesswork and minimizing bias. Organizations can adjust compensation based on industry trends, responsibilities, and company size by establishing a pay range for each position.
When selecting a salary benchmarking tool, there are certain criteria to consider. These include the following.
Accurate and Up-to-Date Data: An excellent salary benchmarking tool should provide up-to-date, accurate information on salaries in the industry. This ensures that decisions are based on current market trends rather than outdated data.
Building Pay Structures: The tool should enable the organization to create custom salary structures that reflect their needs. This guides them in identifying pay rates for different job functions and levels.
Pay Strategy: The benchmarking tool should provide analytics, enabling the organization to compare its salary structure against others in the industry. This helps them pinpoint areas where their pay is too low and determine if they are ahead of the competition.
Easy to Use: The salary benchmarking tool should be user-friendly and intuitive, ensuring employers don’t waste time navigating complex dashboards to use the data.
Comprehensive Reports for Decision-Making: Employers should look for a salary benchmarking tool that provides comprehensive reports that are easy to interpret and act upon. This will enable them to make informed decisions based on accurate data and act upon them.
By considering these criteria, employers can select a salary benchmarking tool tailored to their needs and budget requirements. This will help them attract and retain great talent and ensure their salaries align with current industry standards.
Use Salary Benchmarking to Realign Your Recruitment Strategies
Salary benchmarking is a powerful solution that can increase employee satisfaction, higher productivity rates, and reduce turnovers.
Sprout now offers BenchMark, a new and innovative web-based benchmarking platform that allows managers and C-level executives to assess and improve their team member's remuneration packages with informed, data-driven decisions.
To further strengthen Sprout’s BenchMark platform, we also offer a Compensation Leveling Structure (CLS). It’s a specialized service where Sprout will generate a leveling structure for the client in consideration of job positions/descriptions and pay ranges to similar jobs in other organizations under a similar industry and/or across all industries.
The CLS aims to help organizations create fair and transparent pay frameworks that align with industry standards, market trends, and the organization's specific needs.
With the help of Sprout’s innovative solution, organizations can now stay competitive in the job market by delivering fair and attractive salary packages.
Don't miss out on this opportunity to revolutionize your recruitment strategies.