Salary benchmarking shouldn’t happen in isolation in the HR department. CHROs need to collaborate with other key stakeholders in the business, including finance leaders, executives and even department heads. This helps to ensure the process is transparent, aligned with organizational goals and produces outcomes that meet the needs of the company and its employees. Plus, department heads and managers often have insights into specific skills, roles and market factors that impact their teams.
By presenting data-backed recommendations to senior leaders, you will be better positioned to secure buy-in for new pay structures. With direct input from stakeholders, you can be more confident that the company’s compensation policies are aligned with both market trends and the company’s financial and strategic priorities. You can also receive help in communicating those changes to the broader organization, which helps foster employee trust.
Collaborating with stakeholders on a compensation benchmarking project also drives a more holistic approach to total rewards. HR leaders can gain a deeper understanding of the nonmonetary benefits, perks and incentives most important to employees, and even to teams in different departments. For example, you may find that flexible work is a top priority for workers in the IT department while sales team members place more value on performance bonuses.
Once data has been analyzed and stakeholders are on board, you can get to work on establishing competitive and sustainable salary bands and pay scales. Your business might use one or both tools, depending on how its structured and tailors its compensation strategies.