It’s that time of year – negotiating budgets for the next annual plan, including pay review, promotions, recruitment and maybe even growth. I can feel your head sinking into your hands now… How can you get a clear understanding of how competitive pay is across your business, sort through the conflicting – and expensive – asks from managers and employees and target your budget effectively?
Managers are telling you they need more resource to deliver the financial plan, employees are grumbling about the package their friend gets for doing “the exact same job”, Finance are trying to manage costs and the HR team are struggling to decide which fire to put out first.
But it doesn’t have to be like this – or at least not entirely… There will probably never be enough budget to do everything the business is asking for, but the chances are you don’t actually need to meet all of those requests in any case. What you need is a simple way to provide some perspective for justifying the budget request and targeting spend effectively.
By using your job grading framework – along with a bit of benchmarking and some fundamental analytics – can provide an objective way to identify areas where pay is genuinely out of step, investigate organisation design and productivity questions, and allow you to quantify and model solutions. And refreshing the data regularly can provide insights across the business to inform decisions.
A simple, but powerful, start for of reward analytics can include:
- Distribution of roles by grade – segment by department and take a look at the shape of your teams
- Pay spread by grade – compare to market benchmarks and segment by job or department for greater insight
- For operational areas, look at revenue (or profit) compared to headcount or payroll
There are countless potential refinements and additions to this list, but the important thing is to start somewhere – what you find will help frame the next set of questions to investigate. What people analytics are you using to help plan your pay review? If you’re interested in a chat, contact email@example.com.