Don’t Sell – Recommend!

I saw a reference recently to putting together a salary budget recommendation one could ‘sell’ to the C-Suite.  I thought the language a bit peculiar.  Developing a salary budget recommendation should be an annual joint strategic responsibility of HR and Finance.  You shouldn’t have to ‘sell’ it.  It should stand on its own merits, and the validity of the information used to create it should align the organization’s compensation philosophy with the business objectives.

The general process is:

  1. Confirm the organizational components of the business drivers
  2. Update the position data and market information
  3. Collaborate with Finance to prepare budget scenarios.

Business is dynamic.  Often situations and circumstances change during the course of a year.  Confirming the strategic and tactical objectives allows you to:

  • Analyze the current business environment for competitive pressures, financial constraints, performance against targets and additions or revisions to near term operating plans
  • Assess current resource conditions with predicted needs
  • Determine internal requirements for investment, training, retention, etc.

Most firms have a firm handle on basic employee data. Often though we see companies do not understand the value of positions in the organization relative to business needs.  This information is independent of the individuals who occupy those positions. Once this data is assembled it need only be reviewed and updated as required perhaps annually or more critically, by changes to actual business conditions.  Sound position data can then be matched to market salary information to complete the current or as-is analysis.  A tool like DBCompensation can certainly help.

Working with finance to develop budget scenarios should be easily accomplished allowing the team to illustrate the results graphically and focus on the business-related justification, which after all is the information and context that decision makers need and want.

Compelling reports like the one below where the red line illustrates the ‘before’ situation of severely underpaid higher value positions can be compared against the budget scenario in teal that aligns the organization with business needs.  This isn’t selling.  This is strategically advising company decision makers.  Isn’t that your job description?