Salary Benchmarking - 2024 Guide process, benefits, And Templates in Saudi Arabia
Written By : Bakkah
15 Jan 2024
Companies often worry whether their senior executives’ remuneration packages are in line with those offered by other companies of similar size and industry. A small number of employers have access to this information, and gaining it can be challenging.
To attract senior executives’ the company must compete and be aware of what the market is paying for certain skills and develop fair and reasonable salary ranges in their companies accordingly. Salary benchmarking can help companies to overcome these issues.
What is salary benchmarking?
Salary benchmarking is a process that gives a complete breakdown of the compensation package allowing companies to compare salary and benefits available within specific sectors and named companies. It is a much more exact science, much more focused and detailed process than a traditional salary survey.
Salary Benchmarking Template:
The information that companies obtain from salary benchmarking. A list of companies sorted as follows:
|long term incentive plans (LTIPs)
How to get Salary Benchmarking information?
The majority of companies list this information within their annual reports and publish it for the public. But, for companies to obtain meaningful results, they will have to search in large volumes of these reports, not to mention that it will be hard to analyze the data.
It is a common procedure for companies to hire a third party, such as Bakkah Inc., to carry out this work and therefore save a lot of time and effort.
What are the benefits of salary benchmarking?
- Reduce the risk of losing top executives as a result of better offers paid by competitors.
- To prove to their shareholders in black and white that their senior staff provides value for money.
- These then give a clear indication of how their directors’ pay compares with the market.
- To see what other companies in your region are paying, which can aid both recruitment and retention.
- It helps to maintain your company’s reputation.
Salary Benchmarking Process
1. Do job descriptions:
You should have job descriptions for everyone in your organization. They will be essential for matching skills, responsibilities, and experience to each job position since you can’t count on salary benchmarking surveys to use the same job titles that you do.
2. Plan process:
Start building the salary benchmarking plan.
3. Determine the purpose:
Salary reviews? Is there a team that the organization may be over or underpaying? Are you losing top-performing employees or struggling to recruit fresh talent into a particular area of the business?
4. Establish the goals:
For example, to reduce management pay by 10 % in the next 18 months. Or establish a 5 % pay increase for key players that can stave off a retention issue you’re having. You will use these goals later to measure your project’s success.
5. Outline your approximate budget and resource needs:
Normally, there are two major costs to conducting a market study – salary benchmarking data and HR consultant time. If you plan to do the study in-house, you’ll only need to budget for benchmark survey data. If you choose to use outsourcing, don’t forget to add HR consulting fees into your budget, and understand what’s included upfront. So, take time to find out what the outside research will cost and if you need to include internal time or consulting fees.
6. Craft a timeline
Having your goals in mind, you can now create a timeline for your salary benchmarking project. If you’re a company with high employee turnover, you may need a shorter timeline so that you can perform an external market study once a year. If you’re hiring less frequently, you can likely complete a study every 18-24 months.
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