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Designing Unbeatable Compensation Packages for New Employees

Want to win the War for Talent in 2022? Attractive compensation packages are key to attracting new employees. Read on to learn more about how to develop a strong compensation strategy that will help your company stand out in the candidate’s market of today.

 

 

What is A Compensation Package? 

 

The term “Compensation Package” refers to all of the monetary and non-monetary compensation that employers give to employees in exchange for performing their work. A Compensation Package brings together salary, benefits, cash and non-cash incentives, as well as perks and freebies. 

 

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Why Are Compensation Packages Important? 

 

1. They Bolster Your Recruitment Efforts

According to a recent poll carried out by Berkley, 63% of respondents agreed that salary is the ultimate deal-breaker when it comes to job offers. This goes to show the critical importance of compensation in a company’s recruitment strategy. This is especially the case in today’s strong candidate market, where in-demand professionals can essentially name their price. Building an attractive compensation package that is in line with the current market will empower your organisation to win the war for talent against other employers. 

 

2. They Increase Retention & Lower Attrition

 

“Employees rated compensation as the second-most important aspect of job satisfaction in the Society for Human Resource Management’s 2016 Employee Job Satisfaction and Engagement Survey.“

 

Today’s professionals are significantly more mobile than previous generations and they often vote with their feet if they are dissatisfied with an employer. Research tells us that employee compensation is a major contributor to satisfaction levels and, this, in turn, can lead to improved productivity, morale and loyalty among staff all of which can help to greatly reduce an organisation’s churn rate. As such, taking the time to design attractive and futureproof compensation packages for employees can help to support staff retention and reduce attrition. 

 

3. They Offer an Opportunity to Put Company Values into Action

 

“A compensation philosophy is simply a formal statement documenting the company’s position about employee compensation. It explains the “why” behind employee pay and creates a framework for consistency. Employers use their compensation philosophy to attract, retain and motivate employees.” ~ SHRM

 

A well-thought-out compensation philosophy can support the promotion of certain core values within an organisation. Certain benefits (e.g. childcare, paid volunteer days, upskilling opportunities) that tie in with core values provide an opportunity to show employees that their employer cares about more than just the work. By implementing a compensation philosophy that works in tandem with your core values, you can build a strong Employer Brand Proposition that will ultimately help to attract new employees who share these values, leading to a more cohesive workforce.

 

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Common Components of A Compensation Package

The elements that comprise Compensation Packages can be broken down and separated into two distinct categories: direct and indirect compensation.

 

Direct Compensation

Direct compensation describes a straightforward monetary reward given to employees. It can be broken down into two types – fixed rewards (e.g. base salary) and short-term and long-term incentives (e.g. commission, bonuses).

 

Examples of Direct Compensation

 

  • Base salary
  • Wages
  • Bonuses
  • Commission
  • Overtime
  • Stock options

 

Indirect Compensation

Indirect compensation encompasses any perks and benefits that an employer offers to their employees. It consists of two categories – indirect financial compensation and non-financial compensation. One of the main purposes of indirect compensation is to highlight how much the organisation values its staff. 

 

Examples of Indirect Compensation 

  • Health insurance
  • Paid leave (vacations, holidays, sick days, etc.)
  • Retirement contributions
  • Educational Assistance 
  • Paid volunteer days
  • Pensions
  • Company cars
  • Gym memberships
  • Low cost or free meals 
  • Bike to Work Schemes

 

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How to Ensure You’re Offering a Competitive Compensation Package

 

“Supposing is good, but finding out is better.” ~ Mark Twain

 

In order to ensure that your organisation is offering fair and competitive compensation packages to new employees, you will need to regularly research the market. Stay up-to-date with employment trends and make sure your compensation strategy is in line with the latest market developments. 

 

Salary Guides are an excellent place to start. At Berkley, we create annual reports detailing the latest salary trends across the Business & Technology, Life Science & Engineering, and Supply Chain & Procurement sectors. In 2022, we launched our inaugural Contracting Rate Reports which detail daily and hourly rates for IT and Engineering Contractors in Ireland.  

 

You should also make a habit of conducting salary benchmarking exercises against your competitors. Don’t forget to include benefits and perks in your research. For a step-by-step guide on how to do this, check out our dedicated article, “What is Salary Benchmarking? A Guide for Employers in Ireland.”

 

If you need support, we highly recommend partnering with a Recruitment Consultancy that has specialist expertise in your area. An experienced consultant can advise you on the market and how to build a compensation package that appeals to today’s candidates. 

 

What is Pay Transparency & Why Is It Important?

,

Pay transparency has become a major talking point among employees and employers alike in 2022. Read our guide to learn what pay transparency is and why it is important.

 

 

What is Pay Transparency?

 

Pay transparency is a company policy in which employee compensation data is made visible. Pay transparency policies help to ensure that employees have a good understanding of their organisation’s compensation philosophy, strategies and practices.

 

Companies that adopt a pay transparency policy have multiple options when it comes to sharing compensation data. Most companies choose to only make this information visible to those within the organisation, however some opt to make it publicly available. 

 

euro coin under a magnifying glass to symbolize pay transparency

The Prevalence of Pay Secrecy

 

Up until recently, the majority of organisations encouraged employees not to discuss salary with their peers. Unofficial pay secrecy policies emerged from employers’ fear of litigation and a desire for greater flexibility in salary negotiations. 

Because most employees are not provided with salary information from employers, their knowledge heavily relies on their ability to communicate with each other. Due to privacy norms, however, pay remains a taboo subject. As such, many people feel uncomfortable revealing their earnings to others and are reluctant to ask colleagues about their salaries. 

 

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The Argument Against Pay Secrecy 

 

Secrecy around salary creates what’s known as  “information asymmetry” i.e. staff members are not aware of how much they are paid in relation to their co-workers, but employers know about everyone’s pay. There are numerous disadvantages associated with this that can hinder staff attraction, engagement and retention. 

 

One research paper contends that letting employees’ imaginations run wild “may cause misconceptions about compensation distribution in the company, a decreased sense of internal and external equity (or fairness), decreased motivation, decreased capability of the management to influence the employees’ behaviour at work, decreased employees’ loyalty and trust in the company.” 

 

Pay secrecy has also been found to create the conditions that allow wage inequality to thrive. In an environment where pay secrecy is the norm, employees have no way of discovering if they are being paid less than their peers. What’s more, given that raises are based on previous earnings, discriminated-against employees are less likely to negotiate for higher pay. The institution of a pay transparency policy not only motivates employers to create fair pay systems but also gives employees the opportunity to monitor, complain about and rectify any pay discrepancies. 

 

 

Breaking the Pay Secrecy Taboo

 

However, recent years have seen more and more employees call for the end of pay secrecy. So what factors have contributed to the rising demand for pay transparency? 

 

1. Combatting Wage Inequality

 

Over the past few years, numerous countries have introduced legislative measures to tackle discriminatory wage gaps. In many cases, these measures use salary transparency to force employers to be more accountable for wage discrepancies. 

 

A good example of one such measure is the  Gender Pay Gap Information Act which was signed into law by the Irish government in July 2021. Under this Act, private and public sector employers with 250+ employees will need to report on the difference in male and female remuneration. Over time, the scope will be widened to include employers with 150+ employees and then 50+ employees.

 

 

2. The Great Resignation

 

Since 2020, “The Great Resignation” has rocked the world of work with employees leaving their jobs in droves. Against the current backdrop of salary inflation, many professionals who feel that they are being underpaid in their current job are seeking out new, better-paid roles. As such, some organisations are adopting innovative practices such as salary transparency in order to bolster their talent attraction and retention rates. 

 

When employers are not transparent about pay, employees are 50% more likely to leave their job in the next 6 months. 57% of employees who are paid at market believe they are paid below market, and of the employees who are paid above market, 42% believe they are paid below market. ~ Payscale

 

3. Gen Z Enters the Workforce

 

Generation Z (i.e. e born between the years 1996 and 2012) is entering the workforce and is expected to make up a quarter of the global workforce within the next few years. As the oldest members of Gen Z start securing entry-level roles, we are now beginning to get an idea of how this generation will shape the workforce of the future. Over the coming years, we expect employers to grapple with differing generational values and attitudes as Gen Z’ers come to dominate the labour landscape. 

 

Gen Z is distinguished by their social conscience and this has played into their professional aspirations. This age group is passionate about equality for all in the workplace and are willing to challenge the status quo in order to achieve it. 

 

For Gen Z, equality and transparency go hand-in-hand. As such, pay transparency is a key issue for this age group. Data from a recent Beqom study backs this up: 

 

  • Gen Z-ers are more likely than the members of any other generation to share salary information with their colleagues. 
  • 70% of Gen Z-ers would consider switching jobs for greater transparency. 
  • 28% said pay transparency was important to creating a better company culture, while another quarter said knowing their CEOs’ salaries would motivate them to work harder and earn more money.  

 

4. Online Movements 

 

Social media and online forums have provided a space where countless people from all backgrounds can discuss salary transparency. Given the taboo nature of pay, many people feel more comfortable discussing these issues in an anonymous conversation online with strangers than face-to-face with their real-life colleagues, friends and family. 

 

The 2015 #talkpay campaign offers up one example of how the internet has been harnessed to promote the pay transparency movement. The hashtag was initiated by Lauren Voswinkel, a Pittsburgh-based senior software developer, who realised after many years of working in the industry that she was being paid significantly less than her male counterparts. According to Twitter data, about 1,300 people published salaries as a result of this trending hashtag.

 

 

Buffer: A Case Study of Pay Transparency in Action

 

The most well-known example of a company with a salary transparency policy is Buffer – a social media management tool. In 2013, published an online spreadsheet outlining each employee’s first name, salary, position and city of residence. They have also publicly shared their formula for calculating strategies and have been open about benefits. 

 

Buffer’s openness has made them an employer of choice and this has had a positive impact on their talent attraction efforts. For example, in the month following the publication of the salaries, Buffer received 2,886 job applications, more than doubling the 1,263 it received in the 30 days prior to the announcement.

 

 

Pay Transparency & The Future of Work

 

Companies that adopt pay transparency policies are more likely to develop a data-driven employee compensation strategy that prioritises proactivity and fairness. Companies can future-proof their talent acquisition strategies by designing compensation packages for employees that encompass pay transparency best practice. This ensures that all employees know how and why they are valued. In the future, it will be those organisations that invest their time, thought and effort into designing comprehensive pay transparency policies that will be best-positioned to win the war for talent.

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What is Salary Benchmarking? A Guide for Employers in Ireland

Salary benchmarking is essential for employers who want to remain competitive in today’s tight labour market. This process allows employers to quickly identify and adapt to labour market developments and out their competitors in the War for Talent. 

 

 

What is Salary Benchmarking? 

 

“Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies.” ~ Wikipedia

 

Salary benchmarking refers to the process of collecting information on salary and benefits packages offered by similar organisations operating in the same industry. This data can be further broken down by location, industry, company size and so on. This research provides human resources (HR) teams with a useful comparative framework that they can then use to calculate salaries for specific roles. 

 

Salary benchmarking is a detailed comparative remuneration process that enables organisations to evaluate how competitive they are within the labour marketplace. Conducting this exercise regularly ensures that your organisation is keeping up with market developments. As such, salary benchmarking has become standard global best practice for companies of all industries and sizes. 

 

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Ireland’s Salary Landscape in 2022

 

Despite the turmoil of the past two years, Ireland is enjoying a buoyant employment market and is expected to return to full employment by 2024. In particular, there has been a surge in demand for skilled employees across the tech, engineering, life science and supply chain sectors. 

 

However, a combination of skills shortages, high employee turnover, and pandemic-induced disruption has resulted in a fiercely competitive market in which candidates are very much in the driving seat. We are also seeing pent-up demand for salary increases among employees who took pay cuts or remained in lower-paying jobs during the pandemic. What’s more, with inflation rates reaching a 21-year high of 5.5% in December, in-demand candidates who know their worth are now seeking out higher salaries either through pay rise requests or by changing jobs. 

 

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The Benefits of Salary Benchmarking

 

Talent Attraction & Retention

 

In today’s volatile jobs landscape, it is those employers who arm themselves with up-to-date and accurate salary data who are the most likely to win out in the war for talent. Top professionals will gravitate towards “employers of choice” that they perceive to offer a fair and competitive salary and benefits package. From a retention point of view, employers who have conducted a thorough benchmarking exercise will be prepared when employees request pay rises. As such, salary benchmarking plays a critical role in talent attraction and retention strategies. 

 

Hiring in a New Market/Industry

 

Salary benchmarking is also an immensely useful activity for organisations that are new to the market or who are hiring in an unfamiliar area. Performing a comprehensive study of the going market rates can help employers to define costs and determine budgets for new roles. This will then enable them to set alluring compensation packages for new positions that are competitive in the market. 

 

Ensuring Fair & Equal Compensation

 

“According to WorkEqual, the 8th of November marks the date on which women symbolically stop earning, on average relative to men, because of the gender pay gap.”

 

Another key advantage of salary benchmarking is that it can help tackle wage discrepancies across different groups. Study after study reveals that women and people of colour earn less than their white male counterparts across a wide range of roles and industries. What’s more, professionals who are affected by the pay gap often become trapped in a cycle of lower pay if objective salary information is not made available. Salary benchmarking provides objective information that employers can use to make fair, non-discriminatory salary decisions. 

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Why You Should Also Benchmark Company Benefits & Perks 

 

In 2022, many companies do not have the budget to keep up with ever-rising salary inflation. In cases like this, it may prove useful to benchmark the benefits and perks offered by your competitors. This information will enable your team to create a compensation package that appeals to more than just the candidate’s financial motivations. 

 

For example, you may find that providing schedule flexibility, remote working, and above-average annual leave in addition to a fair salary may be more attractive to candidates than simply paying a higher salary but none of these benefits.

 

In today’s highly competitive labour market, benchmarking total compensation packages, including benefits, will ensure that your organisation is offering overall packages which stand out from your competitors. 

 

How Do You Conduct a Salary Benchmarking Exercise? 

 

Step 1: Design a Goal-Oriented Process

 

Your first step will be to decide what information you need and how you will gather it. To do this, define your goals and then identify what data points will best allow you to achieve those goals. You may find that the type of data you require will vary depending on the group of people you are studying. We find that a good starting point is to ask yourself “Where do the people we hire come from and where do they go when they leave us?” 

 

Once you have defined your required data points, you will then need to create a clear, structured process that you can easily repeat again and again. At this point, you will have a better understanding of the project scope so it’s a good time to figure out whether it’s something that can be done in-house or if you will need support from a third-party expert such as a specialist Recruitment Consultancy. 

 

Step 2: Collect Your Data 

 

Now that you have completed the planning stage, the data collection process may commence. You can gather compensation data in a variety of ways, including survey data, HR-reported aggregate market data, and even employee-reported data. When compiling your data, ensure that it is easy to navigate by grouping together similar jobs. You may further segment your data by including additional information on location, industry, company size, and experience level. 

 

In many cases, you will need to secure approval from key decision-makers for any new compensation strategy. As such, it’s important to remember your audience when collecting and presenting your data. You will need to ensure that your data can stand up to scrutiny by being scrupulous in verifying data, referencing sources and providing supporting evidence. 

 

Step 3: Determine A Compensation Strategy

 

The salary benchmarking process will provide you with the requisite information to set pay structures that are externally competitive and internally equitable. Having compared the data against your own budgets, you can determine your desired market position and set a target percentile. Be sure to choose a target that both aligns with your own pay philosophy while also giving you sufficient wiggle room for negotiation with candidates. 

 

Toy figures standing on a pile of euro coins

Useful Salary Benchmarking Tools

 

If you are planning on conducting a Salary Benchmarking exercise in 2022, then you could kickstart the process by downloading a copy of Berkley’s latest Salary Guide report or our 2022 Contracting Rate Report. Our consultants have collated data on 300+ roles and have devised three reports covering each of our core specialities – Business & Technology, Life Science & Engineering, and Supply Chain & Procurement. 

 

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What Salary Am I Worth?

Constantly fluctuating salaries means that it can be challenging to determine your worth. However, it’s important to know your value in order to make sure that you are receiving a fair and competitive compensation package. To learn more, read our guide below on how to figure out what salary you are worth. 

 

 

Why It’s Important To Know What Salary You’re Worth

 

“Understanding your own worth is very important. If you don’t understand your worth and the value you bring to your employer, why should anyone else?” 

~ “Understanding Your Professional Value”, INCORP

 

Knowing your worth is key to ensuring steady salary growth throughout your career. In fact, a study featured in the Journal of Organisational Behaviour has revealed that a 25-year-old employee that starts at $50,000 would earn $634,198 less than an employee starting at $55,000 by the time they reached the age of 65. As such, it’s important to factor up-to-date and achievable salary goals into your career plan. 

 

Having a good knowledge of your worth will empower you to weigh up job opportunities and negotiate better wages throughout your professional life. Cultivating this knowledge is particularly important for groups that are more likely to be underpaid such as entry-level workers, women and people of colour. 

 

 

4 Ways to Figure Out Your Worth 

 

1. Download Salary Guides 

Salary guides offer the most effective way of researching your worth. For the best overall picture, download several salary guides from a few different sources and cross-reference the figures. You can get started by downloading Berkley’s most recent salary guide reports. Alternatively, you can discover average market rates for your role in the contracting space by downloading our 2022 Contracting Rate Reports. 

 

2. Talk To A Recruiter

You can also learn more about average salaries by talking to a recruitment consultant. We recommend finding an experienced recruiter who specialises in your field. A specialist consultant can also tell you about contracting rates for that position in case that is a path you are interested in pursuing. Visit this page to arrange a free consultation with one of Berkley’s specialist recruiters. 

 

3. Look Up Similar Job Listings 

Amid calls for greater pay transparency, a growing number of employers are featuring salary bands in their job ads. As such, it is now much easier than ever to discover the going rate for your role. For the most comprehensive view, we recommend searching across a number of different job boards. 

 

4. Ask Your Network

If you have many connections, it may be worth asking your network for general salary trends and information in your field. However, bear in mind that this information is more likely to be based on opinion than fact. 

 

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What Factors Affect Your Earnings?

 

Location

When determining the salary for a role, employers must consider local living costs. 

As a rule, employers in city-centre locations generally offer much higher wages than rural areas. For example, Dublin workers earn 15% more than their counterparts in other counties in order to compensate for higher accommodation, food and transport costs. 

Furthermore, areas featuring business clusters (defined by Wikipedia as “a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field”) tend to offer more competitive salaries in order to attract top talent

However, it is worth noting that the rise of remote working in recent years has led to calls for decentralised pay scales. In the future, geography may not have such a strong influential effect on salaries. 

 

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Company Size

In Ireland, people employed by large multinationals tend to earn more than those employed by domestic SMEs. For example, CSO research has revealed that people working for US multinationals earn almost double the average industrial wage. These large companies offer higher salaries and more comprehensive benefits because they generally have the resources to do so. However, we are finding now that many smaller organisations are combatting this by using perks creatively when paying more isn’t possible.

 

 

 

Skill Supply & Demand

Severe skills shortages have led to a market in which employers fiercely compete against each other for top talent. Organisations wishing to remain competitive need to pay big bucks to hire for in-demand skills while also retaining current employees by offering pay rises and counter-offers when appropriate. 

However, research from Grant Thornton has found that a shortage of skilled workers has been identified as a constraint to growth by 37% of Irish businesses. So why is this? Ireland’s talent pool has shrunk while our economy has grown, so the demand for labour has gone up. This has been exacerbated by the pandemic as the net migration of skilled workers has fallen to an all-time low. 

As a result of this, candidates with niche, in-demand skills can command higher salaries at every level of their career. They are also more likely to turn down job offers as a result of receiving lucrative counter-offers from employers.

 

What are some of the most in-demand roles in 2021?

Engineering: Process, Automation, Validation, Ehs, Quality, Regulatory, Manufacturing, Chemical, Electrical, Maintenance Engineers And Technicians.

IT: Software Developers, Analysts, Designers, Engineers, Architects, Technical Support Staff.

 

Experience

As you progress in your chosen career and gain experience, your earnings should continue to grow. Candidates with a high level of skill, knowledge and business acumen built over years in the job are deemed to be highly valuable. 

What’s more, your experience is inextricably linked with your reputation. Typically, the more experience you have, the better you’re reputation will be. As your reputation develops, there will be more employers who will be willing to pay top dollar for your services. 

Typically, top earners within an occupation will have 10+ years of experience. These senior candidates are highly sought-after as they offer a level of hard-won expertise and insight that can have a transformational effect on an organisation. 

 

“In the business world, everyone is paid in two coins: cash and experience. Take the experience first, the cash will come later.” 

~ Harold S. Geneen

 

Education Level

Research has confirmed that earned income typically increases with your education level. For example, data from the CSO reveals that the median earned income for PhD-holders was almost five times higher than that of a person with no education. This is particularly the case in Ireland, where the earnings advantage for adults with a third-level qualification is larger in Ireland than on average across OECD countries.
If your income is stagnating then it may be time to look into upskilling. The key to unlocking a higher earning potential through learning is to think shrewdly when choosing courses and to stay ahead of the technical curve.

 

 

Type of Role

The type of role you work in can also influence how much you earn. For example, contractors typically earn higher gross pay than permanent employees. This is because contractors are usually employed on a short-term basis. Contractors’ higher pay also compensates for the fact that they do not receive employee benefits such as sick pay or annual leave. Furthermore, contractors are paid for every hour/day that they work whereas permanent employees are paid a salary that may not cover hours worked in overtime.  

 

What’s more, by engaging the services of a specialist tax accountancy firm contractors can further maximise their take-home pay. Specialist tax accountants achieve this by making limited company structures as tax-efficient as possible while also offsetting business expenses against the contractor’s income. To learn everything you need to know about making the switch to contracting, visit Berkley’s dedicated Contractor Hub. 

How to Communicate Your Worth to Potential Employers

 

“The worst financial transaction you will ever make is selling yourself short.” ~ Greg Gilbert

 

Once you have researched salaries, the next step is to learn how to communicate your worth to potential employers. When applying for a promotion or a new job, you need to market yourself as if you were a business. To stand out as an applicant you need to be able to clearly articulate the value you offer based on the criteria the employer has defined. Confidence is key here. If you’re going to ask for more money, you have to truly believe you’re worth it. Once you have demonstrated that you could be a valuable asset to the company, then you should be able to easily justify your worth in terms of salary.

 

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Key Takeaways: What Salary Am I Worth?

To ensure that your earnings stay on track throughout your career, it’s important to cultivate a strong understanding of your worth. In order to do this, you will need to do your homework by researching the going rates on the market and by factoring in the various things that could potentially affect your salary. However, the work doesn’t stop there – you must also be able to confidently and effectively communicate your worth and value to potential employers. For more salary tips and tricks, contact Berkley today and talk to one of our expert consultants!

 

How to Ask for a Pay Raise

Are you thinking about requesting a salary bump in 2022? Read our guide for top tips and tricks on how to ask for a pay raise.

 

 

Introduction

 

Irish wages are expected to rise 4-5% this year and next, according to EU estimates. However, with inflation projected to reach 3.1% next year, many industry experts question whether these increases will keep pace with the rising cost of living. These figures indicate that many employees will be seeking out salary increases over the next 12 months. 

 

Data from MarketWatch has revealed that workers who regularly negotiate their salary earn at least $1 million more throughout their careers compared with those who don’t. Outside of moving jobs, it’s clear that salary negotiation is the best way of increasing your income. However, many employees have never approached their managers about a much-deserved salary increase. If you are thinking about broaching the topic of a salary bump at work but don’t know where to start, why not check out our comprehensive guide below.  

 

Job Interview

Pay Raise Statistics 

 

  • Only 37% of workers have ever asked for a raise from their current employer. (Source: Payscale)

 

  • 73% of women have not asked for a pay raise during the COVID-19 pandemic, compared to 58% of employed men. (Source: Glassdoor)

 

  • 70% of employees who have asked for a raise received one. 39% of those who asked for a raise received the amount they asked for. Another 31% got a raise that is less than the amount they requested. The remaining 30% did not get a raise. (Source: Payscale)

 

  • The most successful strategies for getting more money were in-person meetings (48%) along with researching the salary range of similar positions for comparison (34%). (Source: Zoro)

 

  • While 36% of women don’t do anything after initially being denied, 42% of men asked why they were denied, 13.6% negotiated nonmonetary benefits, and 39% started looking for a new job. (Source: Zoro)

 

  • Workers who regularly negotiate their salary earn at least $1 million more throughout their careers compared with those who don’t. (Source: MarketWatch)

 

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What Are the Different Types of Pay Raise?

 

1. Increases Based on Performance and Merit 

An employer may choose to reward an employee’s achievements by giving them a salary bump. This raise may take the form of a standard percentage increase or it could be a lump sum added to the employee’s annual salary.

 

2. Cost-of-Living Adjustments (COLA)

Some employers opt to give out annual or bi-annual raises in order to keep up with the rate of inflation. The amount of the cost-of-living raises varies with inflation. As such, this type of raise helps to ensure that the buying power of an employee’s salary remains the same during a period of inflation. 

 

3. Standardised Increases

A standardised pay raise refers to when an employer awards a salary increase to a group of employees (e.g a particular team, the full company). Every employee receives an equal amount and the increase may take the form of a percentage raise or lump sum.

 

Feel Uncomfortable Asking for a Raise?

 

Making a pay rise request isn’t something you do every day, so it’s normal to feel anxious. However, initiating the conversation yourself is far more effective than waiting for your employer to make the first move. Being proactive about salary may be uncomfortable but it has been shown that this strategy can have a hugely positive effect on your salary. According to Fast Company, the four biggest fears people have when asking for a raise are: 

 

  1. Fear that you don’t deserve more money 
  2. Fear of rejection
  3. Fear of negotiating 
  4. Fear of losing your job 

 

So what are some things you can try to ease your nerves about asking for a salary increase? 

 

  • Practice the conversation beforehand with a trusted friend
  • Prepare your arguments in advance
  • Get to know your worth by researching salaries 

 

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How to Ask for a Raise: A Step-By-Step Guide

 

Step 1: Pick the Right Time

When asking for a raise, timing should be your first consideration. The timing of your request could have a major bearing on your employer’s response so you need to be tactical. Before you schedule a meeting, reflect on the following questions: 

 

  • What is the company’s current financial situation like? 
  • Is there a salary review cycle coming up?
  • When was the last time you received a raise? 
  • Have you successfully completed a major project recently?

 

Step 2:  Calculate Your Pay Raise Request

Knowledge, as they say, is power. Before arranging a meeting you need to know your worth and translate that into a fair and realistic salary. As such, it’s important to have an up-to-date grasp of current market rates for your role. You can research this by cross-referencing different salary guides, looking up salary brackets in job ads, and chatting to a recruiter. It’s also a good idea to read up on the rate of inflation and cost of living figures. 

 

Step 3: Prepare Your Arguments 

According to Financial Therapist, Debra Kaplan, “The request for a raise should be based on objective fact gathering and not on a self-assessment of worth.” When making a pay raise request, investing time into preparing compelling augments can significantly increase your odds of successfully persuading your boss. 

 

We recommend preparing a “Brag Book” that contains the following pieces of information : 

 

  • Key facts demonstrating how you have added value to the company 
  • Stories of times when you added value 
  • An explanation of how your responsibilities have changed/expanded since first taking on your role
  • Examples of any positive feedback you have received from colleagues, managers, clients etc. 

 

Step 4: Plan Your Next Steps If You Get a ‘No’

While positivity is key, it’s also important to carefully consider what you will do if your boss chooses to decline your request. It’s best to do this in advance, so you can stay objective.

 

Firstly, you should consider how feasible it would be to make a non-monetary request in lieu of a salary bump (e.g. additional holiday days, greater flexibility, remote working etc.) 

 

This is also a good time to weigh up your options and to start seriously thinking about moving on to the next step in your career. Consult your career plan and start thinking about what the next career move should look like for you. 

 

Step 5: Arrange a Meeting

Having completed your prep and reflected on your next steps, now comes the hard part – talking to your manager. Take some time out before the meeting to relax and review your arguments. Give your manager plenty of notice by sending an email to formally set a time and date to discuss your salary. 

 

During the meeting, try to stay professional by presenting your arguments in a neutral and fact-based way. Take your time and remember to breathe!  

 

At the end of your presentation, ask your manager if they have any follow-up questions and arrange a time to check in again to see how your request is progressing. 

 

10 dos and donts of asking for a pay raise - infographic - berkley recruitment

10 Do’s & Don’ts of Asking for a Raise 

 

  1. Do try to make your request in a face-to-face or video meeting.  
  2. Don’t make it personal. 
  3. Do back up your request with several objective, fact-based arguments. 
  4. Don’t give an ultimatum or threaten to leave your job. 
  5. Do conduct research to learn more about current market rates for your role. 
  6. Don’t base your request on a colleague’s salary.
  7. Do consider alternatives to a raise in case you get a negative response.
  8. Don’t schedule the meeting at a busy time of the year. 
  9. Do keep a positive mindset about your chances of securing a raise. 
  10. Don’t blindside your manager. 

 

 

What To Do If Your Employer Says No

 

Common Justifications for Pay Rise Refusal 

According to Payscale, the most common reasons employers give for refusing a salary bump are: 

 

  • Budgetary Complaints 
  • Asking outside of the established time of year for raises 
  • Performance doesn’t warrant a raise 
  • Not in the role long enough
  • Shockingly, 33% of bosses do not provide any rationale for refusing a raise request.

 

Next Steps

If your employer says no to your request, you should first try to dig a little deeper into their rationale. If you think your manager will be receptive, why not ask them what you can do to earn a raise in the future. Their answer will hopefully give you helpful information to guide and improve your performance going forward. However, if they cannot provide you with an answer then it may be time to consider moving on. 

 

If the company isn’t in a position to give you a raise at the current time, you could also enquire about a non-monetary alternative such as extra holidays or an improved benefits programme. 

 

Should You Say or Should You Go?

In some cases, you may be better off changing jobs altogether. In fact, research shows that getting a new job is a much better way to secure a pay increase than asking your current employer for a raise. When switching jobs, it’s generally the rule to negotiate for a 10% to 20% pay increase from what you are currently making. You should also consider making a switch to contracting, as a lucrative day rate may in fact offer higher take-home pay than a salary. To learn more about how much you could potentially earn as a contractor, download Berkley’s 2022 Contracting Rate Reports. 

 

Before making your decision, consider your long-term career goals and whether you can achieve these while working in your current role. If you feel like you have plateaued in your current job, then it may be time to seek out a new position elsewhere that meets your salary expectations while also offering plenty of growth opportunities. 

 

Fortunately, the fact that you already have a job means that time is on your side. Take your time and do your research to ensure that you find a role that is the perfect fit for your skills and personality. We also recommend chatting to a Recruitment Consultant who can advise you on ways to grow your career by taking advantage of current opportunities in the market. 

 

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Understanding Counter-Offers: A Guide for Job Seekers

In today’s job seeker’s market, employers are under pressure to retain high-quality team members. As such, we are seeing more and more employers make counter-offers to employees upon learning of their plans to move on. Read our latest blog for a comprehensive guide on counter-offers and how to respond to them.

 

 

What is a Counter-Offer? 

 

When an employee resigns from their job, their employer may make a counter-offer to induce them to stay. Employers typically make a counter-offer within a week or less of receiving the employee’s notice. Counter-offers can take many forms including one or more of the below:

 

  • Increased salary 
  • Additional company benefits 
  • A promotion
  • A change in role
  • Added responsibilities 
  • Additional job flexibility
  • More involvement in projects that interest you
  • Promises or future considerations

 

Counter-offers are particularly prevalent in candidate-driven markets such as Tech, Supply Chain and Engineering, where skills shortages make it hard to source and recruit new employees.

 

LinkedIn Poll: Have you ever accepted a counter offer?

Statistics About Counter-Offers 

 

  • 50% of candidates that resign will be counter-offered by their current employer. (Source: UK Recruiter)
  • 38% of hiring managers reported not making counter-offers at all. (Source: Recruiter Box)
  • 57% of employees accept counter offers made to them. (Source: Recruiter Box)

 

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The Top Reasons Why Employers Make Counter Offers

 

  • To retain the employee’s valuable knowledge of the company.
  • The employee has a niche skill-set that will be hard to replace. 
  • To save on the costs of hiring and onboarding a replacement.
  • To avoid increasing the workload for the rest of the team.
  • To keep up staff morale and team relationships.
  • They do not have enough time to recruit and onboard a new employee. 
  • They want the employee to complete a time-sensitive project.
  • They want to buy time until they can find a replacement.

 

Man and woman shaking hands

 

Reasons Why You May Accept A Counter-Offer

 

There are some cases when accepting your employer’s counter-offer is the right call.

 

You may wish to stay with your current employer if you are having second thoughts about the new job offer. If it is the case that you still want to change jobs but are having doubts about the recent offer, then your best bet could be to accept the counter-offer and keep job-hunting until you find a role that’s right for you. You may want to consider partnering with a recruiter to ensure that the next offer you receive is the best fit for you. 

 

Candidates who are purely motivated by money may also be more inclined to accept a counter-offer. However, before making a decision, you will need to weigh up whether this short-term monetary gain is more important to you than your long-term career goals. 

 

Reasons Why You May Decline A Counter-Offer

 

“Are counter offers just a last-ditch attempt to show a company really cares? Or are they a panicked reaction to keep staff who they cannot afford to lose? Why wasn’t the employee been rewarded with these increases/improvements before saying they are leaving?

The real question is, will the counter-offer fix the issues that prompted you to leave in the first place?  Chances are it may not! The primary reasons employees resign are lack of career opportunities, over-looked on promotion, salary not being in line with the market, negative work culture etc. 

The majority of people who accept a counter-offer still leave their employer. This goes to show that most counter-offers only fix a financial aspect rather than addressing the bigger picture and these issues tend to come to the forefront again very quickly”.

 

In most cases, it won’t be in your best interest to accept a counter-offer. By the time an employer makes a counter-offer, they know that your loyalty to the company is in question. While accepting a counter-offer may initially meet your short-term needs, ultimately this move could hamper your future career progression within the company. For example, your employer will be far less likely to offer you a promotion as they are aware that you could leave the company as soon as a better job offer comes along. 

 

What’s more, while the prospect of a salary bump seems very attractive, it’s worth acknowledging that money can’t solve everything. Ask yourself if the extra income will make up for the problems that made you want to leave in the first place.  Realistically, these problems will persist even after you accept the counter-offer and you may end up handing in your resignation anyway. 

 

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The Potential Downsides of Accepting a Counter-Offer

 

According to data from Phaidon International, a whopping 80% of candidates who accept a counter-offer from their current employer end up leaving within six months. What’s more, a study from Heidrick & Struggles has revealed that almost 40% of senior executives and HR leaders alike agree that accepting a counteroffer from a current employer will adversely affect one’s career.

 

“Candidates under counter-offer need to consider why they wanted to move on from their role in the first place. If it’s purely money motivated, then speaking to your manager may be the easiest solution. If it’s more than salary, then it’s unlikely that much will change to warrant you staying in your role.

Counter-offers really highlight what someone ‘should have been’ earning before they attempted to make a move. It’s a shame that most need to tell their employer they’re leaving before they get their value in their role.”  

Studies show that most candidates that accept a counter-offer will be active on the market again in six months, so ask yourself, will you really be happy in six months, or will you wish you made the move?”

 

10 Questions to Ask Yourself Before Responding to A Counter-Offer

 

  1. What would be your dream job? 
  2. What do you value in a job (e.g. money, challenge, clear track for career progression, work-life balance, flexibility etc.)? 
  3. Where do you want to be in a few years time?
  4. What are your long-term career goals? 
  5. What does your career need next to bring you closer to meeting your medium-long term goals? 
  6. Is your current boss aware of your career goals and are they supporting your career progression? 
  7. What will change if you accept the counter-offer? 
  8. Does the counter-offer address the reasons you wanted to leave in the first place? 
  9. Would a pay increase provide enough compensation to make you overlook the things that made you want to leave?
  10. What would you gain if you leave?

 

Can’t Decide? Talk it Over With Your Recruiter 

 

One of the benefits of working with a recruitment partner is that you can use them as a sounding board. If you have been given a counter-offer and are unsure how to respond, discuss the pros and cons of both options with your recruiter. They will be able to advise you on the best move for your personal and professional growth. 

 

Professional woman in a wheelchair doing a video call

Counter-Offer Etiquette

 

When it comes to responding to counter-offers, honesty is the best policy. You should never lie about a fictitious job offer to prompt a salary raise from your employer. Conversely, don’t make up a counter-offer when negotiating salary with a potential new employer. Lying could backfire spectacularly and may result in serious reputational damage or worse. If you want to secure a good deal with a new employer, then your best bet is to partner with a seasoned recruitment consultant who can negotiate a deal that will satisfy both parties.

 

Another important point is timing. Coming at the situation in the right order shows proper consideration for all involved parties. In an ideal world, the best time to approach your employer about career moves is before you start applying for other roles. If you have a good relationship with your manager, schedule a one-to-one meeting during which you can discuss your career. This will give you an opportunity to bring up any issues you are facing. It will also give you key insights as to where you stand with the company and whether it is in your best interest to stay there. 

 

Otherwise, the best time to talk to your manager is after you are approached with a job offer from another company but before you have responded to it. If you are interested to hear what your employer comes back with, then having a firm offer in place will give you strong leverage. 

 

Do not wait until after you have accepted the other company’s offer before talking to your manager. Accepting a counter-offer after already accepting the original offer could damage your professional reputation and relationships as it reveals a willingness to burn bridges. 

 

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How to Accept a Counter-Offer 

If you have decided to accept your employer’s counter-offer, then you will need to communicate in a clear and timely manner to both parties. When informing your recruiter and the other organisation of your decision, express thanks for all of the time and effort that went into the recruitment process and state that you have decided not to accept the job. They may follow up with you to learn more about the reasoning behind your decision. 

 

How to Decline a Counter-Offer 

If you have decided to reject a counter-offer, it is important to be tactful so as not to burn any bridges. You want to strike the right balance between being firm and being polite. Start by thanking your employer for the offer and express appreciation for the fact that they wanted to keep you on. Give some indication as to why you have decided to reject the offer, but keep your tone positive. Restate your final day and offer to help with the transition during your notice period. 

 

 

Key Takeaways

 

While receiving a counter-offer from your employer may feel flattering, in most cases, it is ultimately in your best interest to decline the offer as it is likely to hold you back from achieving your long-term career goals. However, whether you decide to accept or decline the offer, it’s important to be tactful and keep the lines of communication open with all parties. If you need help making your decision, discuss your options with your recruitment consultant. 

 

Want to make a career move? Chat to one of our consultants today. 

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How to Answer the Salary Expectations Question in a Job Interview

When attending job interviews, many candidates dread the inevitable question about their salary expectations. The key to a successful response is to do thorough research and answer with confidence. Read our guide below to learn more about how to answer the salary expectations question in a job interview setting. 

 

 

Know Your Worth! 

 

“If you know what you’re worth, then go out and get what you’re worth.” ~ Rocky Balboa

 

It’s important to know how to value yourself in the job market. Having this knowledge will empower you to answer questions on salary expectations with confidence. What’s more, showing confidence will inspire others’ confidence in you and this can only benefit you in your job search. For more advice on how to build confidence before an interview, read our guide “How to Calm Your Nerves Before A Job Interview“. 

 

 

Why Do Employers Ask About Your Salary Expectations? 

 

Budget Considerations 

One reason why interviewers ask candidates about their salary expectations is to check whether these expectations align with their budget. Before proceeding to the next stage of the recruitment process, they need to know if they can afford to hire you. In many cases, the employer will have performed a thorough salary benchmarking exercise and will already have an idea of fair market rates. They will need to know if your expectations align with market averages and if this fits within their budget. 

 

Candidate Suitability 

The salary expectation question is also an effective way to gauge if the candidate is at the right career level for the position. A candidate who expects a much higher salary than the other candidates may be too senior for the role. Conversely, candidates who set out a low salary expectation may not have enough experience for the job.

 

To Check if the Candidate Knows Their Worth 

Enquiring about salary expectations is an indirect way to see how well the candidate knows their worth. A strong candidate will recognise the value of their skillset in the market and will be confident in sharing their worth. They will be able to work this out by factoring in the appropriate market value, their years of experience and their career achievements.

 

LinkedIn Poll - When it comes to job offers, is salary the ultimate deal-breaker

 

How To Research Job Salaries 

 

Research will play a key role in how you answer the salary expectations question. As part of your pre-interview preparation, you should invest some time and effort into researching salaries so you can answer this question with confidence. To get a clear picture of your worth in the current market, it is a good idea to cross-reference a few different sources. 

 

  1. Search online for up-to-date salary guides such as the recent publications by Berkley. You will find that some guides sort roles by years of experience and geography. 
  2. Don’t forget to inform yourself of the average contracting rates for your role. You can do this by downloading Berkley’s 2022 Contracting Rate Reports.
  3. Visit online jobs boards and look up similar jobs in your area. Check the job description to see if it includes salary information. 
  4. Don’t forget to talk to a recruitment consultant. At Berkley, our consultants are experienced experts in their specialised fields and will be able to advise you on average salaries for the position for which you are interviewing. Click here to book a free consultation. 

 

 

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What Factors Affect Your Salary Level?

Use your current/previous salary as a starting point

 

Location: When setting a salary, employers often factor in the local cost of living. For example, Dublin workers earn 15% more than their counterparts in other counties in order to compensate for higher accommodation, food and transport costs. What’s more, there may be a higher concentration of similar organisations in the area so there is a need to offer a competitive salary to attract top talent. 

 

Experience: Candidates who have a high level of skill, knowledge and business awareness honed by years in the job are considered to be highly valuable by employers. They can bring a level of unique expertise and insight that can only be learned through experience. As such, their salaries will continue to grow as they build up their experience. 

 

‘Hot’ Skills: Skills shortages have resulted in a candidate’s market in which employers compete for top talent. Professionals with niche, in-demand skills can command higher salaries at every level of their career. In Ireland, this is particularly prevalent in the IT, Data Analytics, Science, Financial Services, and Engineering sectors.

 

Company Size: Irish workers employed by large multinationals tend to earn more than those employed by smaller domestic organisations. For example, one study found that people employed by US multinationals in Ireland earn almost twice the average industrial wage.

 

Education Level: Studies have found that your earned income tends to increase depending on your level of education. For example, according to data from the CSO the median earned income for those with a Ph. D was nearly five times higher than that of a person with no education. This is particularly the case in Ireland, where the earnings advantage for adults with a third-level qualification is larger in Ireland than on average across OECD countries.

 

 

Strategies On How To Answer The Salary Question 

 

Deflect & Delay:

If you do not know how to answer the salary expectations question yet, then you can deflect it. Keep in mind that you will eventually have to discuss salary expectations, as such deflection will initially be the smart move. Delaying this conversation may put you in a better negotiating position later on in the process when you have convinced the interviewer that you are the best candidate for the job. As a rule, it’s best to keep your response short, polite and neutral. 

 

Sample Responses: 

  • “Before I answer you, I’d like to learn more about the role and the company so I can give you a more accurate salary expectation.” 
  • “I’m seeking a competitive offer that includes benefits and other kinds of compensation, but I’d like to learn more about the specifics of what this job involves  before I give my salary expectations.”
  • “Let’s discuss the role requirements and expectations first, so I can get a better idea of what you need.”

 

Turn the Question on Them

Another option is to diplomatically flip the question on to the interviewer. In doing this, you signal to them that you are flexible on salary and you offer them the chance to take the lead in answering the question. If you succeed in coaxing a salary range out of the interviewer, then this will give you a useful reference point to use later on in the process. However, you will still need to do your homework to find out if this is a reasonable offer that aligns with your expectations. 

 

Sample Responses: 

  • “That’s a great question—it would be helpful if you could share what the range is for this role.’’
  • “You likely already have an idea of your budget for this position and what it is worth to the company, so it would be useful to know the salary range that you have in mind”
  • “It’s hard to say as I don’t know how salaries are structured here. Is there health insurance, a bonus built-in somewhere, motor expenses, travel, holidays etc?”

 

Give a Range 

Eventually, you will need to answer the question. When that time comes, provide a range rather than providing an exact figure as this will show that you are willing to be flexible. When discussing your desired salary range, be sure to cite your research and give your reasoning.  

 

When setting your range, bear in mind that the employer may offer something on the lower end. As such, it’s a good idea to ensure that your target figure is quite close to the bottom number. We also advise you to keep your range somewhat narrow with a variance of no more than €5 – 10,000. However, take care not to set the amount too high or you could be considered overqualified.

 

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What Not To Say 

 

  • If possible, try to avoid answering the question. Use deflection and delay tactics to learn more about the job or find a way to turn the question on them. 
  • Don’t lie. When it comes to salary expectations, honesty truly is the best policy. 
  • Don’t give an exact figure as this may be much higher or lower than the budgeted salary for the role. 
  • Don’t be negative in how you answer the question. Keep your response short and your tone positive. 
  • Wait until they bring up the topic of money. Raising the issue of the salary too early on in the process communicates that you’re more interested in the paycheck than the position.
  • Don’t sound unprepared. Back up your answer by highlighting your reasoning and research. 

 

4 Strategies for Answering the Salary Expectations Question in an Interview - Berkley Recruitment - Infographic

 

Working With A Recruitment Consultant?

 

If you have partnered with a recruitment consultant for your job search, then it is highly unlikely that the hiring manager will ask you for your salary expectations. Rather you will privately discuss your salary goals with your recruiter and they will negotiate with the hiring manager on your behalf. The recruiter will advocate for you and help ensure a deal is reached that satisfies both parties. As such, going down the recruiter route is an ideal option if you dislike the thought of salary negotiations.

 

Advice From Our Consultants About How to Answer the Salary Expectations Question

When it comes to salary, always tell the truth about your current and expected package. This will help to eliminate any unrealistic expectations from both candidates and hiring managers. If you’re working through an agency then let the recruiter manage things as much as possible for you. However, if you’re asked about salary in an interview, ensure you’re giving accurate information. This is usually recorded by all parties, so saying one figure initially and another at the end of a process can cause issues with transparency. Remember, you are being asked about your current package so it can be improved on, not for any other reason.

 

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Key Takeaways: How To Answer the Salary Expectations Questions

 

As is the case with any interview question, confidence is key when discussing your salary expectations. You need to know your worth in terms of salary. In order to feel confident in your response, do plenty of research about average salaries in your field and don’t forget to factor in any relevant factors. Be strategic in your answer so as to put yourself in the best position possible. For more advice on how to answer the salary expectations question in an interview, why not book a free consultation with one of Berkley’s in-house recruitment experts.

 

 

Download our 2022 Salary Guide Reports to Learn More Today!

 

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