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SallyDenbigh
Sally Denbigh

9 Oct 2018, 08:00

Salaries and Benchmarking

Salaries: What to Pay?

You’re about to recruit for a fabulous new position in your organisation – perhaps a newly-created one, or you may be looking to replace someone who has recently left – you know exactly who and what you’re looking for, you’ve already decided where you’re going to advertise, and the job descriptions and person specifications are nearly finalised. But you’re now faced with that age-old question: What to pay?!

You’re a charity, you want to spend your donors’ money wisely and carefully so can’t go splashing the cash on fancy salaries. But you also want to attract the best candidates.  (Paying low salaries can be a false economy if you only get second-rate employees). So what remuneration should you be offering, and what can your charity afford? What is the right salary not just for the post but also for your organisation?

If the role is an existing one, obviously you may simply choose to offer what the previous post-holder was paid; and in most cases, that will be the right decision. However, the vacancy could be an excellent opportunity for you to review the role, consider what worked best and what didn’t. Perhaps make a few changes, amend some of its focus and priorities, remove one or two responsibilities and add in others. But by doing this, you may also then need to amend its salary… But to what? What should you be paying? And of course, if the role is a brand-new one then determining the appropriate salary can be even more difficult.
 

Benchmarking

Some charities carry out benchmarking, whereby (simplistically put) they consider factors such as what similar organisations – sometimes also known as “the competition”! - are paying their staff for similar roles. They will then look either to match these salaries for their own employees, or pay the average of them. (Which is to say, if they examine six other organisations they’ll pay the median or midway salary of the six). Undertaking benchmarking exercises every now and then can be extremely useful to an organisation – and sometimes, quite enlightening too! It’s surprising how many CEOs and other senior-level staff are unaware of ‘the market’, including what other charities are paying their staff.  Benchmarking – particularly if existing employees are aware it’s taken place – can also have the added advantage of your charity being seen as being ‘fair’; properly valuing and paying your staff their worth. Because without a doubt, even if you don’t, your employees will know exactly what other organisations are paying!
 

Internal or external expertise

Benchmarking is sometimes carried out in-house by a charity’s HR person or team. However, it takes time and additional resource which your organisation may well not have.  There is also the potential for a conflict of interest, as your HR team could effectively end up benchmarking their own salaries! Some organisations therefore prefer benchmarking to be undertaken externally, thus ensuring – amongst other things – that it is completely objective. And of course, outside professionals will already have an extremely good understanding of the overall charity landscape, including roles and remuneration, and will be able to bring that expertise and knowledge with them.


It’s not all about the money!

 It is important to remember however that a good (that is to say, a high) salary isn’t the be-all-and-end-all to all employees. People obviously need to be able to pay their bills, but beyond that far more important to many is being able to achieve the right work-life balance.  With recent research in fact revealing that candidates are increasingly looking for benefits other than what’s in their pay-packet: such as flexible working, the opportunity to work from home, longer holidays, and so on. Not forgetting of course – and this is where charities can stand head and shoulders above the private sector! - working for a worthwhile cause. Wanting to get out of bed in the morning to go to your job, and at the end of the day feeling like you’ve actually been able to make a difference, can be worth its weight in gold to many people.   So even if your organisation is not able to pay ‘top dollar’ for a new job, that’s not to say you won’t still get the top candidates…

 

If you need advice with recruitment and determining the right salary for a role – including salary benchmarking – then Action Planning should be able to help! If you would like to talk to us about this and how we can assist your organisation, please do get in touch with us at: office@actionplanning.co.uk

David Saint

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