How do you know you’re paying the right amount for your talent? Read this article to find out.
Everyone has a price
You’ve heard it said that everyone has their price. It’s an adage that definitely applies to talent supply. Sometimes, it can be difficult to know if you’re paying too much for talent, particularly when there’s no clear job category data for the territory you’re recruiting for. So what can you do to make sure you’re not paying too much? Here are a few tips.
1. Explore your own historical rates
You may already have some evidence of previous rates agreed from earlier recruitments hidden away somewhere. It’s surprising how many times we uncover data clients already have on their systems on job categories!
2. Ask your staffing suppliers
It’s an obvious step, but asking staffing agencies for their perspectives on rates can be an effective option. Some will argue that staffing agencies have a vested interest in exaggerating rates, but in our experience, that’s rarely the case, especially when you ask the same question of several partners. The fact is, vendors won’t want to be seen to be over-playing their hand. Check rates with four or five vendors and you should get some firm market indications. In truth, most organizations don’t check with their vendors because they don’t feel they have the time, or it would be fruitful if they did. You should really give them some credit – it’s their industry and job after-all – but trust your instincts if you feel you’re being hoodwinked!
3. Check-out candidate quoting rates
When you engage in a talent acquisition exercise, you will likely come across candidates happy to outline to you the sort of rate they’re looking for to perform a role. If you sensibly take note of each of these ‘rate conversations’ a picture will build of the average rate candidates will accept. Keeping this data on file (but not attributing it to any individual so as not to break data privacy guidelines) can help in future procurements.
4. Suppliers rates supplied during the RFI/RFP Process
If your organization regularly sends out Requests for Information (RFIs) or Requests for Proposals (RFPs) then it’s likely you will be able to mine rate cards responses from previous procurements to start building a perspective on market rates and how they are changing.
5. Invest in market insights tools
Should your budget allow, there are some excellent market rate analysis tools available to talent professionals these days. Examples include Talent Data Exchange, Talent Neuron by Gartner, and People Ticker.
6. Ask Workspend!
Workspend captures meta-data on job category rates from around the world because we are a global talent company. Often, we can source market pricing information from other clients at an industry or territory level.
Final Thoughts
Establishing your own intelligence of market rates is something that improves over time if you’re a good note-taker and you make a conscious effort to carefully curate any rate related insights. Rates can be captured from all of the different sources referenced above and used to develop a holistic rate card for the job categories you recruit on. Do bear in mind though that rates vary enormously based on territory, whether individuals are working remotely or on-premise, and the state of health of market employment (and growth). It’s well-worth giving consideration to these factors when cataloging any rates being offered.
Finally, we sometimes get asked the question, ‘How will I know if I’m not paying enough?’ The answer to that question is reasonably straightforward, and it can be measured from the start and end of a program:
At the start of a program: If you’re not paying a sufficient market rate for your roles, the quality of candidates you can attract will be low. If this is the case, try nudging up the pricing point and see what level of improvement you see.
Then, as programs mature: Any excessive rate of dropouts/leavers will give you a realistic picture of your pricing point.
About the Author
Sameer Srivastava has over twelve years experience in designing, implementing and managing MSP programs in Europe, Asia, and the US. His current responsibilities include oversight of Workspend’s Strategic Center of Excellence based in New Delhi, India, and business operations in APAC and EMEA. Prior to joining Workspend, Sameer was leading Kelly OCG’s Implementation services in EMEA and later went to head their MSP and RPO Operations in India. Post Kelly OCG, Sameer was at Allegis Global Solutions where he managed Implementation and Operational teams in India. Sameer also has experience working as an IT and Change Management Consultant in the US and the UK. Sameer holds a bachelor’s in computer science from the University of Nebraska, Lincoln (USA) and an MBA from Cranfield University (UK). He can be contacted at [email protected] or follow him on LinkedIn.
