Brett Boadway—COO, IBAO
Employees are an organization’s greatest asset, representing a significant (if not the largest) investment it will make. How organizations design and deliver their compensation programs is critical in achieving sustained, long-term company performance.
This promises to be an exceptional time for most Canadian organizations as they tackle significant workforce challenges including a constrained labour market, inflation, ongoing pressure on salaries, economic headwinds, and growing expectations to address diversity, equity and inclusion pay gaps.
External market conditions and changing employee expectations drive organizations to rethink their total rewards programs to provide engaging and cost-effective alternatives. Business leaders are starting to ask themselves the following questions:
- How do we ensure that we most effectively use our compensation spend?
- Are we investing our financial resources/budgets in the right components of our total rewards portfolio?
- Do we know if our total rewards portfolio is optimized?
Leveraging data like the benchmarking survey we conduct with IBAO Members is a key foundational tool in assessing the competitiveness of an organization’s compensation programs. Compensation surveys provide data-driven guidance to key internal questions while supporting an organization in remaining competitive.
How organizations use salary survey data
A competitive compensation program plays an integral part in solving the retention and recruitment equation. By understanding the external market range for a particular job, organizations are better equipped to attract top candidates. While companies use salary surveys to ensure pay programs are market competitive, other considerations should be made when making data-driven pay decisions.
- Market pricing provides information to support decisions on how much and how to pay
- Market-based anchors should reduce the risk of both underpaying and losing talent to competitors or being unable to attract the talent it needs and overpaying and wasting organizational resources or impeding desirable turnover
- Market pricing is a descriptive, not a prescriptive activity. Market data is not the sole answer, but serves as an important tool—there’s often more to the story
When organizations incorporate compensation surveys in their total reward strategy, they better understand the current market and, over time, develop broader perspectives on how the market is moving. Organizations should aim to actively participate in and obtain data from salary surveys and re-evaluate employees’ salaries as part of their annual compensation cycle.