Begin with the right information
One good place to start is to conduct salary trend analysis to establish the bigger picture for the business and look at how that has changed over time. It’s a useful process and provides excellent discussion material for the Board – particularly if you are arguing for an increase in the payroll budget as part of your recruitment and retention strategy. Salary trend analysis is far easier to complete if you use reporting tools within your HR software, as this is not only accurate and insightful – it should save you a lot of time too – especially if the alternative is compiling or updating a manual spreadsheet by hand.
Obviously, UK companies now have an obligation to publish their gender pay gap data on an annual basis. The annual salary review is a good time to consider this too, especially if you still have some way to go to bring your gender pay gap down compared to competitors in your industry. Again, HR software can help you here as it makes it much easier to track your pay gap performance and then you can use the HR data produced to compare with the previous year and demonstrate what progress has been made overall.
Consider alternative approaches
Perhaps this year it’s time to consider how you review and process salary changes and see if the time is right for your company to adopt another approach. One point to consider is whether you assign salary bands according to the job role or the person and their worth to the company? Perhaps you look at the market value and set salary brackets according to the current rate? Do you prefer to offer ‘across the board’ blanket percentage increases for most staff or do you negotiate individually? Maybe you even do a combination of some or even all of the above. However you choose to assess salary and increases, it’s always useful at the start of the process to pause and reflect on whether this is still the best way forward for your people, your business and your budget.
One radical approach to salary adopted a small number of progressive businesses in the technology and finance sectors is to allow staff to decide their own pay rises. This isn’t as wacky as it seems at first glance as, done effectively, it encourages a collective understanding of job value and individual contribution as well as an awareness of the financial constraints facing the business. Rather than encouraging greed or selfishness, those who have adopted the approach have instead seen greater transparency and a feeling of fairness as well as improved staff loyalty and work ethic. Food for thought?
Consider the company culture around salary discussions
Do individual staff members discuss remuneration with each other in an open manner or is an exchange of personal information generally discouraged by the business? Obviously, you can’t legally try to prevent employees from discussing their salaries if they choose to, however it might be useful to think about any unwritten rules perceived to exist in your business. If there are no differences that could be viewed as unfair then employee salary discussions shouldn’t be a problem – but do beware of inadvertently getting caught out. For example, not actively identifying and addressing historical issues whereby some staff are paid more or less than others for equal or equivalent work. The general mood has shifted on the subject of salary and many people are now more aware of their rights and more confident in asking for more if they feel that they are entitled to it.
With the big salary discussion season almost upon us, it certainly pays to be prepared.
Avoid salary review surprises in your business and take a look at how software can help you. As a potential partner with plenty of experience and a market leading solution, The Access People Management Suite is a proven choice.
Get in touch with us today to get a demo of our HR software and discover how we can help your business.