Remuneration studies
What is a compensation study for?
Compensation surveys are essential to ensure a well-compensated workforce. The Human Resources department must be committed to the employees, carrying out studies that ensure adequate remuneration for the position and the value of each employee in comparison with his or her peers.
What is the purpose of compensation studies?
Studying our clients’ salary ranges and analyzing the market is a priority.
In our Human Resources Consultancy we have the necessary tools to carry out this analysis effectively.
Advantages of compensation studies
Multi-sector or ad hoc remuneration studies
Depending on the needs of each company, compensation studies can be generic or tailor-made. For business groups, opting for generic analyses is usually a great option.
However, some companies require a more detailed study, so Melt Group designs each analysis in a comprehensive and customized way.
Experience in compensation studies
The remuneration study requires experience from the team in charge of carrying it out. It is crucial to carefully analyze what the market offers and determine the needs of the sector.
It is not just a matter of making salary comparisons, but of conducting a high-quality documentary and analytical analysis.
Interpretation and decision making
Knowing how to interpret remuneration studies is essential for making the most of their benefits. Decision-making and the implementation of new economic measures within the company depend to a large extent on it.
Remuneration studies: The salary band
In order to correctly establish the salary band within an organization, it is extremely important to have a perfect knowledge of the labor market. In this way, it will be possible to define salaries and wages with objectivity, which will serve to recruit talent among much more motivated candidates.
The salary band is the range of remuneration established between the different positions within a company. Hierarchizing the different job profiles is key to determining the famous salary band. What is basically done is to establish a minimum and maximum salary in each of the hierarchies.
Obviously, the initial reference is the minimum interprofessional wage established by law in each country. Subsequently, we must carefully analyze the sector, in order to assess in what numbers we should move. This provides us with quality information regarding the expectations of professionals in each activity.
This is undoubtedly an important need for HR managers.
How to establish the salary band?
- The market: a thorough research of the market is a priority. In the compensation studies we carry out at Melt Group, we analyze the salaries (fixed + variable part) of profiles similar to those of our clients’ companies.
- Employees: knowing our employees, their positions, skills, knowledge and abilities is key to determine the salary band for each position.
- Economy: each organization needs to adjust that salary band to its own economy, in order to achieve benefits. Therefore, the remuneration study must also reflect the maximums that can be assumed in the company.
- Emotional salary: this concept is key in Human Resources. The idea is to complement the monetary salary of workers with other types of benefits, such as improving work-life balance, favoring access to teleworking, flexible schedules, etc.
Salary: fixed part + variable part
The salary or wage is the consideration that every employee receives in exchange for his or her work. Depending on the type of company, the employees’ labor agreement, prior negotiation, the position held and other reasons, it can vary considerably.
As a general rule, salaries consist of a fixed and a variable part. In addition, flexible remuneration and other forms of social benefits are included in the salary.
Fixed salary
This is the base salary offered to the employee for his or her employment relationship with the company. This amount is always the same, i.e., it does not vary. Therefore, it is independent of the fulfillment of objectives by the employee.
Variable salary
It is a fundamental part of the salary of many employees. It is designed to motivate the employee, since it increases according to the achievement of objectives.
Emotional salary
If we add flexible compensation to the fixed and variable part of the employee’s salary, we obtain the employee’s emotional salary.
This is a perfect formula to improve the employee’s perception, who will feel much more valued by the organization to which he/she belongs.
Flexible remuneration
Professional justification and self-worth
Flexible compensation allows companies to increase employee compensation without increasing the cost of salaries.
Flexible compensation is defined as payment in kind; that is, the employee will receive his or her regular salary but also other forms of non-monetary compensation, such as luncheon vouchers, company car, housing, or payment for services such as schooling for children or gymnasium.
What are the advantages?
- Talent Attraction
- Flexible salary allows attracting talent to the company.
- Loyalty and Retention
- Builds employee loyalty and prevents talent drain.
- Increased Productivity
- Increases productivity through employee loyalty.
- Salary Costs
- Does not increase salary costs.
- Tax Reduction
- The employee will see his taxes reduced.
- Economic Savings
- Flexible compensation increases economic savings for employees.
- Labor Conciliation
- It favors work conciliation.
How can we help you?
At Melt Group we help you implement flexible compensation plans through our detailed compensation studies.
To do this, we determine the objectives to be achieved, study your employees and design the action plan taking into account the requirements of the business.
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