Offering the right salary is essential to attracting and retaining quality staff. While benefits, flexibility, and culture all play a role in employee satisfaction, salary remains one of the most important factors in both hiring and retention. If your pay is not aligned with market expectations, you risk losing strong candidates, facing increased turnover, and damaging your reputation as an employer.

Many businesses rely on outdated benchmarks or internal budgets to guide their pay decisions, without checking how they compare to current standards across the industry. With inflation, skills shortages, and changing workforce trends, staying informed about what constitutes competitive pay is more important than ever. This article outlines how to find out whether you are paying your staff in line with the market, how to identify any pay gaps, and what to do if adjustments are needed.

Understand What Market Rate Really Means

Before comparing your salaries to the market, it is important to understand what “market rate” actually refers to. It is not just the award rate or a figure pulled from a salary report. Market rate reflects what candidates are currently earning or expecting in roles similar to yours. Here are a few key things to consider:

• Go Beyond the Minimum: Award rates set the legal baseline, but most skilled candidates expect more than this. The market rate usually sits above award levels, particularly for roles in demand or requiring specialised experience.
• Factor in Location, Industry, and Experience: Market pay can vary widely between industries, capital cities and regional areas, or based on how much experience a candidate brings to the table.
• Compare Roles: To get a true sense of market rate, make sure you are comparing the same level of responsibility, qualifications, and role scope – not just job titles.
• Rely on Recent Data: Salary expectations can shift quickly in response to talent shortages or economic changes. Data from 12 months ago may no longer reflect what candidates expect today.

A clear understanding of what drives market rate helps you assess your current salaries with context, not just numbers.

Check Multiple Sources Before Making Assumptions

One salary guide or job ad is not enough to determine how your pay compares. The best way to gauge where you stand is by reviewing a range of sources. This will give you a clearer picture of what people in similar roles are actually earning. Here is how to do it:

• Speak with Your Recruiter: Recruiters have up-to-date insight into what candidates are earning and expecting. They can provide accurate comparisons based on location, industry, and skill set.
• Use Job Boards Strategically: Look at advertised salary ranges for similar roles in your area. While not every listing includes pay, enough research can reveal useful patterns.
• Refer to Industry Reports: Salary guides and workforce surveys from your industry can help validate your findings, especially for high-demand or niche roles.
• Monitor Candidate and Staff Feedback: If job applicants are declining offers or current staff are mentioning pay concerns, it may be a sign your salaries are falling behind.
• Pay Attention to Exit Trends: If staff in key roles are leaving for better-paying jobs, this could indicate that competitors are offering more attractive packages.

By using multiple sources of data, you avoid basing decisions on a single reference and gain a more reliable sense of where your salaries sit.

Identify Gaps and Adjust Where Needed

Once you have assessed your current pay against the market, the next step is to identify where your salaries may be falling short – and what to do about it. Not every gap needs an immediate increase, but knowing where you stand puts you in a stronger position to make informed decisions. Here is how to approach it:

• Prioritise At-Risk Roles: Start with positions that are difficult to fill, have high turnover, or are critical to your operations. Making adjustments here can deliver the greatest return.
• Review Total Compensation: If salaries are below market but cannot be increased immediately, consider what else you offer. Flexibility, bonus schemes, learning opportunities, or extra leave can add significant value.
• Set a Plan for Incremental Change: If gaps are identified, you do not need to fix everything overnight. Communicate with staff about upcoming reviews or staged increases to show you are addressing the issue.
• Avoid Internal Inequity: Pay differences between employees in the same or similar roles can cause frustration – even if everyone is being paid near market rate. Fairness matters as much as competitiveness.
• Use Insights to Strengthen Recruitment: Knowing where your offer sits, allows you to confidently advertise roles, negotiate with candidates, and reduce the risk of losing great applicants to higher offers.

Staying aligned with market expectations does not mean overpaying – it means paying fairly and smartly, based on what your business needs and what employees can realistically expect.

If you want to attract and retain quality staff, you need to know where your salaries stand. Relying on old data, award rates, or assumptions can lead to underpaying your team. This then makes it harder to hire and easier to lose the people you want to keep. By understanding what market rate really means, using multiple sources to check how your pay compares, and making practical adjustments where needed, you can position your business as a more competitive and attractive employer.

At Conquest Recruitment Group, we help businesses assess, benchmark, and improve their hiring strategies – including salary alignment. If you are unsure whether your pay is hitting the mark, get in touch with our team for advice tailored to your industry and staffing needs.

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tags: Career Blogs, HR Industry