How to help clients manage remuneration reviews

Retaining talent should be among every leader’s priorities for the coming year and, in a cost-of-living crisis and the current inflation/rates environment, money talks. But where does a business go to find out how the salaries they are offering for certain positions compare?

The first and most obvious place businesses look for salary information is in the major benchmark surveys run by recruitment multinationals such as Mercer, Korn Ferry and Hays. But this may not be the best place for medium and small businesses to start, according to CRM Recruitment founder Barry Maurer, whose staff have worked in the UK and Australia.

“These surveys have their limitations and are very standardised,” Maurer says. “They’re not geared to smaller businesses, so accountants can come in and be a sounding board to some of the realities of that.”

Often the job titles used within large organisations, and therefore in the salary surveys, are different to the ones that would be used in small and medium businesses, he says.

“The surveys are designed for larger companies, are being sold to larger companies and are reflecting larger companies,” Maurer says.

And salary surveys don’t take into account what Maurer calls the “key person factor” that is often more relevant in a smaller business. That is the fact that a person in a certain role in a large organisation could be a tiny cog in a large machine. But a person in a similar role in a small business could be far more important.

How can accountants add practical value?

The remuneration discussion, or the job of salary benchmarking, is ultimately the responsibility of the HR professional. But in many smaller businesses there may not be such a person, or they might hold quite a functional role, as opposed to a strategic one.

No matter the scope of the HR function in the business, accountants can add practical value in numerous ways. The first is through a superpower many don’t even realise they possess.

“Accountants are effectively benchmarking off their various clients through what they see every day,” Maurer says. “When I go and see my accountant, I always ask about what is happening out there in terms of remuneration across other sectors.

“They have a unique perspective. They themselves are benchmarkers, because they’re always seeing into other companies. They know what represents best practice in the remuneration discussion.”

And so, accountants can offer their clients some of the most relevant, up-to-date and powerful data to inform the salary discussion. They do this by simply keeping track of what is happening in the remuneration space across similar-sized businesses, in similar locations and across numerous sectors.

That information, Maurer argues, is likely more valuable to small and medium businesses than the data that comes from major salary surveys.

Getting creative in the engagement space

What is remuneration? When it’s boiled down, remuneration is a retention strategy, Maurer says. And there is more than one way to make it work to the advantage of the employee, and the business.

Other, more creative financial factors have exciting retention benefits, and they’re ones that smaller and medium businesses can potentially use more easily.

“You might look at other factors that have powerful retention benefits, like profit sharing,” Maurer says. “That is an interesting theme that can be developed, and one that absolutely requires the knowledge of an accountant as it comes at the structure of remuneration from a different perspective.”

Along similar lines, for particularly valuable and important staff members, the accountant could also help develop an equity plan.

“In terms of providing useful, relevant data, there’s a lot an accountant can do,” Maurer says.

“They’re seeing broader and more relevant salary benchmarks than the annual surveys can offer. They know the ins and outs of different structures around profit share and equity plans, which people tend to get quite excited about. And they know the client business and its finances. I think accountants could be quite expert from those perspectives.”