Recently, more and more companies have been participating and using salary surveys as a credible source of information in planning their total rewards strategy.
However, only a full data remuneration survey used on-time following business plans can help companies stand out from their competitors in the market and set a winning strategy for their people agenda.
During these information-driven times, insightful salary survey reports together with a total remuneration strategy are the cornerstone for building sustainable business goals.
Why a salary report matters
When most businesses decided on the solution of cutting down operation costs to break the barriers of low efficiency, it is a top priority to optimize their human resources (HR), which entails a regular efficiency and compensation budget review.
According to the exclusive salary report provider in Vietnam, Talentnet Corporation, the number of companies purchasing its salary report has continually increased in recent years.
The latest Mercer Salary Survey, in 2016, saw a 30 per cent rise in survey participation by Vietnamese companies, proving that more and more local business leaders have recognized the benefits of having a qualified salary report together with other HR management tools.
Since compensation is directly tied to the business bottom line, securing reliable salary reports is a crucial need for any company, helping them to benchmark their total remuneration rewards with their competitors before deciding to adjust their pay scheme.
This is also why salary reports are conducted annually, to keep data updated and best reflect market trends.
“As more and more business leaders consider HR a strategic partner that helps drive business performance in the long run, salary reports are playing an impactful role in offering comprehensive data and analysis on the market, industry, job function, and benefit scheme,” said Ms. Hoa Nguyen, Senior Director of Talentnet’s Mercer Remuneration Surveys & HR Consulting Department.
“This information not only serves as a valuable reference but also offers critical solutions for organizations to rejuvenate their compensation and benefit strategies, making them a winning package for both employer and staff. Forty-six per cent of the 2016 survey participants wanted to review their benefits scheme to ensure their competitiveness in the market, which means that enterprises are proactively observing the market and continuously reevaluating their offers.”
In the latest Mercer – Talentnet salary report, the top priority was given to base salary increments and the second priority to training and development as well as recruitment. Short-term incentives are the next focus of budget allocations for HR in 2017.
In the end, a salary report with trusted and valuable data is the solution for effective salary systems and opening the door to talent engagement and retention.
HR budget allocation for 2017
Source: Talentnet – Mercer Report 2016
Executive base pay variation, comparison with Vietnam
Source: Mercer May 2016, TRS Surveys
The trap of similar salary reports
A government report on the acceleration of international economic integration indicates that Vietnam has signed ten free trade agreements (FTAs), concluded negotiations over two more, and is in talks over four others.
Business leaders are therefore starting to build interconnected ecosystems and collaborating across industry platforms like never before.
Obviously, in this emerging age, one of the top concerns that keeps CEOs awake at night is how to retain and engage talent amid such global competition, when fair and competitive salaries and rewards are the top priority.
Possessing a comprehensive salary report can be considered a cutting-edge tool for companies to become aware of emerging HR trends and global ground rules.
Regional comparison of executive level salary
However, once considering to use salary reports for reference, business should bear in mind the following.
First, data should be validated carefully and weighted the same way to ensure the consistency of results.
This means all your data provided should be treated under a standard methodology, otherwise the information released will not be comparable. In positions and levels for example, it is important to look at job duties and level of responsibilities rather than job titles themselves.
Second, not all companies need the same salary reports since business scope, size, and goals always vary from one to another.
For instance, small and medium-sized enterprises may need to acquire a customized salary report with focused data at certain levels and areas while big companies need a broader source of data.
Third, salary reports are an information reference, not an “action plan”. Therefore, businesses may need to revisit their strategic goals, plan their tentative roadmap, and decide how to follow or adapt cost and benefits practices in the market.
To be a proactive player in the labor market, enterprises need to make sure they have full information on the total compensation package that provides thorough benchmarking and overviews.
Without a comprehensive and credible reference source, business leaders may reach incorrect assumptions about their total remuneration offers, which could mislead their compensation and benefits strategies.
The bottom line is what matters in creating a winning compensation package. It’s not about how much you pay, but how you pay.
VN Economic Times