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Updated on November 20, 2023
How do you stay competitive on the salary front without going overboard? Here are a few factors to consider when determining your strategy.
Despite what some employers may think, compensation is a major reason for employees to leave an organization. How can you use it as a tool to retain as well as attract employees?
Implement a fair internal salary structure
Some companies, mainly SMEs, have a limited or no appropriate salary structure. It is important to determine the value of the jobs within your company, and not only the value of an individual’s CV or profile. This evaluation, based on objective criteria, will allow you to group jobs with a similar level of responsibility, and then build an appropriate salary scale.
The structure does not have to be complicated. It can simply be a competitive salary scale, tailored for each position. Employees will know their salary can progress over the short and medium term. Being able to see themselves in the future reinforces their loyalty.
Naturally, you need to consider the market. Several public studies and data are available to estimate the competitive salary that should be offered for each position. This applies to operational (labourers, clerks), tactical (supervisors, professionals) and strategic positions (managers, directors) alike. The salary needs to reflect the level of skills required.
Companies that offer profit sharing incentives should make them available equitably to all employees who meet performance objectives.
Enhance direct compensation
Employees want access to benefits that suit their situation, in addition to their salary. This is where employers can be creative without going overboard on salaries.
For example, the company could consider offering:
- “Workcations”, a mix of work and vacation that allows employees to work from anywhere in the world for a few months every year;
- Access to a cottage so employees can work in a different environment;
- A schedule tailored to the employees’ needs (taking equity and the specifics of the job into account);
- Unlimited vacation;
- Working remotely (fairly standard now in most businesses);
- Access to a fitness room, yoga courses, a corporate card to go to a spa;
- Telemedicine consultations and repayment of health and wellbeing expenses;
- Onsite daycare;
- Planned social events;
- Mass transit cards and free parking;
- Dry cleaning service to save time;
- Reimbursement of the cost of training.
Options also include medical and dental insurance, a pension plan (group RRSP, defined benefit or defined contribution plans, VRSP for SMEs) and a personal assistance plan (PAP).
Staying competitive
It is essential to make employees realize, through a total compensation statement, that these benefits are added to their salary and increase its value. For example, an employee earning $60,000 per year may find that they actually earn $72,000 when they add in their benefits.
Inflation should not be the only criterion for a salary increase. It’s a matter of balance. If your salaries are too high, it can put your company in a difficult position when it comes time to purchase equipment or go through a slow period. An excessive increase may have the opposite effect and result in layoffs rather than retaining employees.
Even though the Consumer Price Index (CPI) has varied from 5.1% to 8.1% in Québec in 2022, the Ordre des CRHA has noted that salary increases range from 3.7% to 4.5%. In order to control these increases, which are higher than in the past, some companies are offering two salary revisions per year to react to inflation in real time. Employees appreciate this practice.
Employers need to be aware of the salaries and benefits offered in their industry to make attractive and creative proposals. But opportunities for advancement, company values, employee recognition are also part of the total compensation package and are incentives that should not be underestimated.