April 9, 2015
To succeed and grow, your company needs the right people in the right jobs working together to do the right things. But how can you attract – and retain – the right people? Admittedly, it can be a challenge. But there IS an often overlooked tool to make employee recruitment and retention easier. It’s called…
The Market Pricing Policy
A market pricing policy helps an organization gain the clarity needed to compare its jobs to similar jobs in the marketplace. This can help the company determine market competitiveness by employee position or job title. And leveraging this information can help the company become more attractive to recruits while also encouraging top performers to stay.
If you are engaged in, or in charge of, employee retention and recruitment, there are some basic steps involved in developing and utilizing an employee market pricing policy:
First, you should segment your organization into employee groups. For example, these might include classifications like Executives, Directors, Managers, Supervisors, Exempt Professional, Exempt Technical, Non-exempt, etc.
With these segments identified, you can begin to assess – geographically – where to go when you need to recruit new employees within each group. Ask yourself: Can we find the talent we need locally? Or do we need to search for talent regionally or nationally?
Once you determine the appropriate geographic market for each group, you will then want to document your employee count and revenue size. This will help you work within the right subsets as you explore various market data surveys. Because surveys vary in their reporting structure, you may find your internal parameters on the border line. For example, let’s say you have 102 employees. The scopes in a particular survey might be from 50 to 100 employees and from 101 to 200 employees. Deciding whether to move up or down for comparison purposes might depend on your company’s plans for growth – or consolidation – in the coming year. You might need to make this same type of decision based on the revenue scope of the market survey under review.
Finally, you should determine, for each employee group, when general data is sufficient and when more specific industry data is essential. For example, depending on your industry, non-exempt jobs might be benchmarked to a general industry classification. This simply means that the specific job skills are transferrable and can be found in any industry. Other jobs, such as technical positions,however, may require highly specific industry experience and require you to benchmark more tightly to a particular industry scope.
There can be many other critical factors and parameters, of course, but throughout the process of developing a market pricing policy, you should document your resources and decisions. This will help ensure that anyone completing the market pricing work, or anyone reviewing that work (such as management), can clearly see where your data comes from. Understand, too, that a market pricing policy is not a once-and-done initiative. Changing conditions – in your company and in the marketplace – will warrant periodic policy review and revision.
Again, attracting and retaining top talent is challenging. So if you are not sure how to set up your company’s market pricing policy, or if you believe your current policy needs validation or updating, remember that Total Reward Solutions can help.
Call us today at 317-589-8529 to find out more.