When it comes to wooing quality talent in a competitive market, we all know money talks. When people change jobs, most will want or expect a pay increase compared to their previous job – and a hefty hike can act as a powerful lure.
This is borne out by Hudson research, which has revealed that the number one ‘must have’ in a new role for job seekers is ‘the right salary’1. But what exactly is the ‘right’ salary for a role as opposed to a ‘good’ salary, and how do you determine this?
Good vs right: what is the difference?
To determine what a good salary for a role might be, you first need to have an accurate gauge of the going rate for the same role offered by other organisations. ‘Good’, for example, might be 20 per cent above the market rate. It’s fairly cut-and-dry.
But ‘right’ is a more complex matter. The right salary is about making sure that you pay people what they are worth, based on what they will bring to your organisation – but also what you can afford.
Looking beyond salary to lure talent
In today’s economic climate with profit and margin pressure, budget can sometimes be limiting. But with the cost of living soaring, salary increases are important to people – but luckily they’re not the only thing that’s important.
In Australia, ‘the right salary’ may be the No 1 ‘must have’ in a new role, but work life balance and cultural fit with the organisation are the next most important priorities.
These other factors can be used in combination with salary to attract talent, which is why organisations need to look at their entire employment offering, with salary a part of it – it’s not the only drawcard. With other elements like career progression and work life balance highly valued as ‘pull’ factors for job seekers, the relative importance of money alone can decrease as it is weighed up against other components of the offering.
So when it comes to career progression, for instance, what kind of career trajectory can employees expect with your company, and will you offer professional development and training?
For those with young children, will your organisation offer them the flexibility to leave work early for school pick-up or work from home when necessary? And that’s not just for women but for men, too. Here in New Zealand, the Hudson Report showed work life balance now pips career progression as a must-have in a new job – for men. The world is changing fast and organisations need to ensure their employment offerings are keeping up.
The right offering will therefore address not only a person’s financial needs but their life priorities, motivational drivers and their values. Is that six figure salary going to mean putting in 70-hour weeks at the expense of family time? Do you offer other perks that will add to their quality of life or make their life easier, such as a gym or on-site cafeteria?
It’s all part of the equation.
3 tips for getting your employment offering right
- Get market data to research what the role is paying. Partner with a recruiter who specialises in roles you’re recruiting for – they’re in touch with the market and can help you find the right salary level.
- Have a conversation with potential hires that goes beyond skills and experience so you understand their broader priorities. Elicit information not only on their career aspirations but also their other priorities in life, motivational drivers and values. This understanding will form the basis of the package you offer them.
- Develop and sell a compelling EVP. It’s vital for hiring managers to understand and be able to articulate their employee value proposition clearly to candidates, but it amazes me how many fail to do that. What do you have to offer – a great team and workplace culture, fantastic coaches and career development? If two organisations are offering the same money, these are the things that will get candidates over the line.
||Roman Rogers is Hudson's Regional General Manager, New Zealand. With more than 15 years industry experience, Roman is responsible for driving growth and profitability across Hudson's New Zealand business.
The Hudson Report: Forward Focus 2016