Preventing unnecessary salary costs due to the Pay survey
In our opinion, many companies when carry out the Pay survey and then make pay adjustments based on the outcome could do so with significantly lower pay adjustments. In our opinion, there are two main reasons why many companies spend far too much money on adjusting salaries in connection with the pay survey.
Many companies treat the outcome of the Pay survey as an extra Salary review, which in our opinion is not necessary and usually leads to the company spending more money on salaries than necessary. Our suggestion is to implement the change required from the Pay survey in the next Annual Salary Review, where the manager is informed of the proposed adjustment and why it should be made. In this way, an informed salary change for the employee can take place, where the Pay survey adjustment becomes part of the annual pay increase.
The second change that many companies could usefully make is in how the Pay survey is carried out, where adjustments/measures in the same and similar jobs are made after an analysis at individual level where the individuals who are considered deviating are addressed. In our opinion, this is a very costly and also incorrect way of approaching the Pay survey. The costs are high because it requires adjustments that are not necessary, and often these adjustments lead to imbalances in other analyses in the pay survey and/or lead to imbalances in the salary review or next year's pay survey.
Our proposal for handling is that the analysis is done at group level and if there is no unreasonable deviation between, for example, the average salary for men and women in the same work, then it does not need to be analyzed and addressed at individual level. This approach has been checked with the DO and is considered correct. The idea is to find inappropriate pay differences between men and women, and not at the individual level. As an example, if there are both men and women who have very low salaries in the group, this in itself is not a basis for a salary adjustment from an equality point of view as both men and women are disadvantaged - what should be found are systematic inequalities, other deviations can be adjusted from a salary policy point of view but are not a necessary measure.
YourWork24 can help with the work required in the Pay survey and Annual Salary Review and also offer IT system support that facilitates the Pay survey and ASR.