Job valuing is one of the trickiest steps in the compensation planning process. It requires a keen understanding of what each of your individual employees do, the importance of those roles and tasks inside your organization, and how similar positions are compensated in the outside market.
For decades, Employers Council has been helping organizations of all shapes and sizes develop, create, and execute compensation plans. Our experienced compensation consultants have seen how plans succeed or fail based on the quality of job valuation. Here are six ways third-party compensation planning services, like those Employers Council provides, can help you both raise your job-valuing bar and streamline this complex task.
1. Align your compensation philosophy with your job-valuing strategy
Compensation planning, and, consequently, job valuing, is never a one-size-fits-all process. HR departments need to understand exactly who your organization is and isn’t. A compensation philosophy should connect your company’s values to how you compensate your employees, but many organizations run into problems with this key first step. A seasoned outsourced compensation planning consultant can help you shore up your philosophy; get it into a shareable, written form; and help you live it out through a corresponding job-valuing strategy.
2. Know your unique internal/external value balance
Outsourcing job valuing can help you get a wider view of how to balance internal and external factors. Looking only at external market data can cause unintended pay inequalities inside your organization. But relying only on internal valuation can lead to talent being wooed away by better-paying competitors. Experienced compensation consultants have seen many, many different ways to balance the internal/external equation. They can help you log your pay pain points and challenges to find the right balance for your organization, depending on your organization’s philosophy, culture, market competition, and more.
3. Gather all the information you need — the first time
Sometimes inexperienced compensation planners will skip right to the information-gathering step without a job-valuing strategy based on a strong philosophy and thoughtful internal/external balance. A knowledgeable compensation consultant will make sure you know what you need to know first. In general, job valuing demands up-to-date specifics on the kinds of work being performed. This is a time-intensive task that can mean interviewing all employees, creating and analyzing job questionnaires, or getting reports from supervisors detailing their employees’ positions. Then all that information needs to be translated into new or updated job descriptions, written in a consistent format. That’s a lot of work! Getting outsourced help for info gathering can help speed up the compensation planning process.
4. Match jobs externally using the right data
This is the meat of the job-valuing task for most organizations, but its price of entry can be steep. Without outsourced compensation planning services, organizations need to build or buy job-matching software and find and purchase quality survey data. Employers Council has time-tested and consistently updated software — and consultants who know how to use it well. In addition to conducting its own benchmark surveys, Employers Council has access to a wide variety of carefully vetted data. Greener compensation planners might struggle to locate the right compensation data, let alone use it correctly. Experienced compensation consultants can scrub surveys and perform the right cuts (according to size, industry, location, etc.) quickly.
5. Consistently value jobs internally
Based on decades of job-valuing experience, Employers Council consultants report that organizations can expect to find accurate external job matches for 60 to 70 percent of their positions. Whether you’re internally valuing jobs to make up that gap or as part of your balanced valuation strategy, a well-versed outsourced compensation planner can help you create and execute a transparent process. Getting help with a point-factor analysis or other proven ranking systems can ensure your internal valuing is based on facts, not just a best guess.
6. Analyze values against the reality of your situation
Finally, all job values should be evaluated against old fashioned reality. Once in a while, anomalies can sneak through even well-vetted data and lead to unrealistic values. Sometimes a quickly changing market might demand a different range of pay. Maybe your organization has a linchpin position that needs a more competitive approach. Outsourced compensation planning services can give you an objective second opinion when asking: Does this make sense for us?
Ready to dive into job valuing? Employers Council can help with any of these steps or provide holistic help throughout the entire compensation planning process — a three to four month undertaking. Our experienced consultants have worked in many different industries and with the full spectrum of organization sizes. Get in touch to find out how we can help ease your team’s compensation planning burden and get you quick, accurate job values.