Salary is one of the best weapons businesses have in the ongoing war to find and retain top IT talent. Making sure IT salaries are competitive and appropriate for available positions and geography as well as commensurate with experience is a challenge, especially in emerging technology hotspots like the Research Triangle region of North Carolina.
In the high tech market, compensation levels can be drastically different, depending on location as well as the constantly fluctuating demand for specific programming languages, applications and frameworks, according to compensation data and services provider PayScale.
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In its most recent Compensation Best Practices Report, PayScale reports that compensation is crucial to retaining top talent and that retention is one of the key challenges businesses face in 2014.
"We found companies are increasingly worried about retaining their top talent," PayScale's Vice President of Marketing Tim Low says. "More than ever, real-time market data on compensation has the ability to give businesses a competitive edge as they grapple with a more dynamic talent economy and employees who are looking for a bigger, better deal," he says.
Staying competitive in tech talent game
To ensure her organization is hiring and retaining top talent, and to make sure salaries are on par with or exceed that of competitors, Rebecca Bottorff, chief people officer at Bandwidth.com, says she uses PayScale's real-time compensation benchmarking and data analytics tools when putting together compensation offers and benefits packages.
"Compensation is such a sensitive area," Bottorff says. "Because most of the data from competitors, or even from the Bureau of Labor Statistics is outdated, it's hard to find data on which to base pay decisions. And then the candidates you're looking for don't trust that the data you're using is accurate. It can really be a mess," Bottorff says.
Because Bandwidth.com is located in Cary, N.C., in a tech hot spot, Bottorff says she has to benchmark salaries for developers every six months, a huge change from her previous practice of doing so every few years.
"I had to switch up my strategy, because the market is so hot. I used to wait as long as I could, because it's such a complicated and tedious process," Bottorff says.
"When we started to benchmark in real-time, it made us so much more agile, nimble and much more attractive to the developer talent we're trying to attract," Bottorff says.
As the market for developers heated up over the previous year and Bandwidth.com began scaling up existing projects and instigating new ones, Bottorff says, finding qualified developer talent was one of the biggest challenges. Neither internal nor external recruiting efforts were able to meet the demand.
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"Developer demand is skyrocketing. These guys often have two or even three offers on the table at once, so they were able to pick and choose, and we needed an edge," Bottorff says.
Leveraging PayScale's data and the real-time compensation benchmarking tools allowed her to find qualified new talent and to make existing talent compensation more competitive. It also drastically reduces the chance that good employees might leave for a more lucrative offer.
Focusing on employee retention
"It's not just about how much to pay new hires. As our business has evolved, the responsibilities are changing and necessary skills are evolving for our team members, too," Bottorff says.
"In the past few years, Java and C++ would have been enough to qualify almost any hire. But now, Android and VoIP are mandatory on top of baseline development skills. I need to know how to compensate employees who've kept up and added those skills," Bottorff says.
Using real-time compensation planning and benchmarking tools allows organizations to determine the value employees have to the business, and also evaluate how new knowledge and skills should be rewarded, Bottorff says.
"I have the tools to see how my workforce has matured, and I know I'm paying for the skillsets they actually have learned," Bottorff says. "My jobs can keep up with the value of the employee to the business. By recognizing that they are becoming more valuable to the market and paying them accordingly, I can reduce the chance that they'll leave," she says.
Sharon Florentine covers IT careers and data center topics for CIO.com. Follow Sharon on Twitter @MyShar0na. Email her at firstname.lastname@example.org Follow everything from CIO.com on Twitter @CIOonline and on Facebook.
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This story, "How to attract and retain tech talent by using compensation benchmarking" was originally published by CIO.