You’ve found the perfect talent and are ready to bring them on board. But… what do you offer? In recent years, determining the right salary has become a real hot topic, with rapid changes across industries. Companies are seeing salaries rise due to labor shortages and inflation, meaning they need to be more strategic with salary policies to stay attractive. Easier said than done!

In this blog, we’ll walk you through how to offer a salary that’s not only competitive but also a true reflection of your company culture and brand.

Salary now vs. 10 years ago: a world of difference 

The job market has transformed significantly over the past ten years. Where you might have hired a top developer for a reasonable rate ten years ago, today’s salaries require a deeper investment. In many sectors, salaries have risen by around 25-30%, driven by factors like inflation, demand for specialized skills, and massive technological shifts that require new expertise.

For companies, this means you need to pay more not just to attract talent but to build a competitive overall package – from salary to benefits. This is where it gets interesting: you can use salary strategically to position your company in the market. But how can you be smart about it? Below are some steps to make the process easier.

Step 1: understand market trends and industry standards 

Setting the right salary starts with market knowledge. What do your competitors pay? And what do candidates in your sector expect? Luckily, there are tools and platforms these days, like Glassdoor and benchmark reports from HR firms, that give you a clear picture.

Did you know: in some fields, like IT, cybersecurity, and healthcare, salaries for critical roles can be up to 40% higher than for similar roles in other sectors? Insights like these help you avoid under- or overestimating salary expectations.

Tip: Don’t let your salary policy be driven by numbers alone. Consider what’s essential to your organization. If growth is a big focus for your company, consider building developmental salary steps. This way, you offer a financially attractive path for employees who want to grow and develop their skills.

Step 2: create a flexible, future-oriented salary policy 

Now that you have a market overview, it’s time to shape a strategic salary policy. A strong salary policy is flexible and future-oriented – it provides employees with stability but leaves room for adjustments as needed. A straightforward but effective approach is to set salary ranges per role and level. Include space for annual inflation adjustments and growth within roles.

Strategy tip: Your salary policy is also a chance to express your culture. Does your company value equality highly? Consider making your salary ranges transparent. Transparency builds trust and helps your team feel valued and fairly treated.

Step 3: invest in benefits and work culture 

Salary matters, but it isn’t everything. Many employees value things like flexibility, learning opportunities, and a positive work culture just as much. Research shows that benefits are a key deciding factor for many. Think about options like remote work, training budgets, and additional leave days. Especially post-pandemic, employees expect flexibility at work – and this expectation is here to stay.

Fun fact: In companies where flexible hours are standardized, employee satisfaction is often 20% higher than in organizations without this option. By offering such benefits, you not only make your company more attractive but also build a culture of trust and balance.

Step 4: ensure internal equality and transparency 

When it comes to salary, nothing is as essential as fairness. Employees who feel valued and fairly treated are more engaged and less likely to leave. Make sure comparable roles fall within the same salary range, and keep this policy transparent.

Interesting insight: Companies with a transparent salary policy experience up to 30% lower turnover on average. By clearly communicating pay scales and raises, you not only increase satisfaction but also demonstrate your commitment to fairness and consistency as an employer.

If equality is a core value for your company, consider an annual pay equity audit to reduce pay gaps. This shows that you actively pursue transparency and equality – something many employees truly appreciate.

Step 5: stay flexible and respond to market changes 

The job market is constantly evolving. What’s competitive today may be outdated a year from now. To avoid getting stuck, it’s smart to make part of the salary variable, for example through performance bonuses. This allows you to respond to market shifts without unnecessarily raising fixed costs.

Did you know: In sectors like consulting and IT, up to 20% of income is variable. This gives companies the flexibility to reward performance and effort without implementing structural salary increases.

Flexibility helps companies stay agile while also giving employees the opportunity to earn more based on performance. This can add that extra bit of motivation and keep your company competitive, even in tight markets.

Build a salary that supports your brand and culture 

A well-crafted salary policy is so much more than a cost factor. It’s a strategic tool that strengthens your brand and culture. By finding the right balance between salary, benefits, and a fair, flexible approach, you not only give employees a reason to join your team but also a reason to stay. Remember, salary policy isn’t a one-time decision – it’s a dynamic part of your organization that grows and adapts with the market.

Do you have questions or are you curious about the possibilities of working with a recruitment agency? Send us a message!