Market Pricing Program
- Does your organization have critical or “hot” jobs?
- Is your organization losing employees to your competition?
- Does your organization take too long to evaluate jobs and you lose prospective employees to another job offer?
- Do your employees complain about their pay?
What is Market Pricing?
Market pricing is the technique of creating a job worth hierarchy based on the "market rate" of a job in the labor market and its relationship to the other jobs within the organization.
There are external and internal markets for labor --- both can influence pay rates. The external market pay rate is determined by labor supply and demand. The internal market is dependent the competencies of the existing employee population and retention factors, such as the ease with which existing employees can find satisfactory work elsewhere.
Why Market Price Your Jobs?
Ensure that you pay your high performers what they are worth before they leave to go to your competition
Ensure that you stay in front of labor market changes especially demand for “hot” jobs (those jobs that require critical skills and/or are in high demand)
Recruiters need to feel comfortable that the job is market priced correctly so they can do their job effectively and bring quality talent into your organization quickly
Market pricing is a vital step in the Salary Administration process for the whole company (to ensure internal equity)
Inaccurate market pricing (or salary ranges) can result in an ineffective Salary Administration Program, which can impact a company’s Performance Management System
Salary structure adjustments do not address current labor market conditions; therefore, market pricing should be conducted annually to ensure competitiveness over time
How Do We Conduct a Market Study for Your Organization?
In order to conduct a market study, it is important to understand the components of the position to be priced, as well as the competitive labor market (e.g., geography, industry, revenue size) within which it competes. Once completed, the results of the market pricing can be utilized to develop a salary structure consisting of compensation grades and ranges.
Market pricing can be accomplished by collecting data from published salary survey sources. In some cases, companies prefer a custom salary survey for their specific needs. It is important to utilize as many relevant sources as possible in order to ensure an accurate market comparison. Each survey has an effective date; therefore, all data must be aged to a common date, utilizing a prorated percentage of the average merit increase award in the competitive market. Once all data is aged, multiple measures of central tendency should be calculated and evaluated, such as the average, median, and weighted average, to determine the best estimate of the market value.
We will provide you with a final report on the total market value of the job including base pay, short-term incentives, and total cash compensation. For specific jobs, we also provide long-term incentives and total direct compensation.
Elmore Consulting Group Inc. (ECGI) Can
Market Price a Job Within 24 Hours of the Request:
Elmore Consulting Group offers a 24/7 Market Pricing Program. For clients in this program, we will market price a job within 24 hour of your initial request. Please contact us at (949) 679-2350 for more information about our program.