By Andrew Walker, Reward Expert at Croner
If you had asked someone at Croner Reward to talk about the market benchmarking work they were doing 10 or even maybe 5 years ago, you would have got a fairly standard answer.
Maybe we’d have been looking at salaries for sales staff across various regions of the UK; or perhaps helping a charity set the pay of a director in London; or maybe, just maybe, we would have been helping a business work out what to pay for a manager in their new office in Paris or Brussels.
Wind forward to the present day and things have changed.
As businesses strive to make the best of difficult economic conditions, as they look for new markets and as cost efficiency becomes an absolute must, so it is that more and more employers are ‘going global’.
The relaxing of cross border regulation, particularly within the EU coupled with both quicker travel possibilities and improved technologies all allow businesses to operate from a much more fluid base than ever before.
Add to this a growing acceptance of remote and teleworking and employers are rapidly learning that they can cast their net much wider in the search for the right talent at the best price. What does it matter where people are located as long as they get the work done to the right quality and for the right ROI?
Of course, it logically follows for employers that an important part of the mix here is ensuring that once they have been identified, skills are accurately priced in the real local market.
So in the last three months we have taken on work in countries as diverse as Finland, Malaysia, United Arab Emirates, Korea, Japan and the powerhouses of China and India. This list excludes the somewhat ‘routine’ work we have been doing in France, Germany, Poland and various other nearer neighbours. It also hides the many job roles that we have benchmarked in the US market or for US based employers in the UK and Europe.
And this surge in international benchmarking is not the result of some idle curiosity on the part of employers to see what these markets are like. For businesses hoping to recruit great talent for the most streamlined cost, the effects of paying people inappropriately can be crucial. Offer too much and employers run the risk of cancelling out one of the key benefits of looking globally; offer too little and the risk of picking up below par skills increases enormously.
And of course, important though cash can be it’s not just about base pay. Benefits (in whatever form they exist) can vary widely from place to place. It’s important to know what makes the most impact in terms of attracting employees, but also to be aware that what we think of as ‘core’ benefits might simply not be cost-effective to deliver in other territories.
Finally, it’s important to take stock of the cultural norms of a new location; employers should never assume that people from different backgrounds will even be motivated by the same things. Sensitivity in this area can make the difference between success and failure with new hires. All in all, good benchmarking, beyond perhaps the simple ‘numbers game’ can be a real asset to any business.
Some of the job roles themselves have changed a little as well; so along with the sales professionals and office managers we are seeing a lot more IT and technical roles being ‘priced’.
This is an almost inevitable consequence of the way in which technology works; the speed of change in the IT world and the way in which software and systems develop in an almost viral and organic way means that hot spots of expertise move at a bewildering pace. Add to that the way investment by both governments and corporations shape the supply/demand model where skills are concerned and it’s easy to see how vital it is for employers to keep their finger on the pulse of available talent and not just in their own ‘back yard’.
Whatever the content of the jobs therefore, these are certainly in a much more diverse set of locations than they were a decade ago.
But the basic skills of benchmarking don’t change. The combination of good data awareness, the objective ability to match jobs and titles from one organisation to another and the judgment to know when to use different sources of data are all vital to this field. And the really key skills that a specialist can bring are the ability to question when things don’t add up and the confidence to make decisions around making recommendations to their client.
There’s no doubt that the internet can provide masses of data on just about every topic; and market pay and benefits data is no exception. But arguably only a well trained researcher can make sense of that data and bring its real value to bear for employers.
The noted early 20th century American humorist Will Rogers once famously said “It's not what you pay a man, but what he costs you that counts.” What was true in the early 1900s is perhaps even more appropriate now in the rapidly changing world of global business.
Visit Croner for more information on pay and benefits.