Issue No. 64 - April/May 2012
How to put a price on your staff
by Con Klestinis
How do you ensure you are paying your staff a competitive rate?
If you employ accountants you will doubtless be aware of the current skills shortage that is gripping sectors of the profession. To retain the best people, it’s vital to ensure their remuneration packages remain competitive. For many managers, that can be easier said than done.
Calculating a benchmark
Employers spend enormous chunks of time trying to accurately gauge what is a fair and reasonable salary. This process of comparing a salary with a primary job role is what we, in the business, call ‘benchmarking’. However, other factors should be used as criteria during this exercise. For example, for an employee, level of qualification, years’ experience, and business unit should be considered. The location and size of the business should also be applied in any calculations.
Personal attributes, such as work ethic, should also be used in the evaluation. As Kerry Wright, general manager at William Buck in South Australia, says: “We benchmark our salaries to ensure we are competitive within the market place when recruiting new staff. Obviously everyone is treated on an individual basis. Promotion and reward within the firm are linked to performance and not just salary surveys.”
Given this need to consider individual circumstances, it’s important that a calculated average or mean is only used as a guide rather than a definitive answer. But it usually follows that, the greater the sample size of benchmarking research, the more meaningful and accurate the results. As Tracey Pearce, HR manager at Pilot Partners in Queensland, points out: “It should be a targeted tool for the accounting profession. The information must be current and come from a reasonable sample size. It must be relevant to individual roles, varied levels and to help differentiate the different areas of accounting.”
As the business owner, partner, HR manager or general manager, ther...