Experts have debated a lot regarding the advantages of a competitive compensation plan in gaining a head-start over its competitors. As mentioned earlier, companies can incorporate various benchmark tests for comparing themselves with the competition. While associating with start-up businesses or any new business, they can have a reference from similar industries.
Before thinking of improving their present plan, it is crucial for companies to be determined about being competitive within the industry. People within industries keep a sharp eye on their competitors to see if they possess a better plan. It does not mean spying or hiring someone to disclose information about their competitors.
They should have a habit of acquiring information about the competitor’s compensation through legal and ethical ways. This may contain information about previous wages from new recruits, surveys on the industry through third parties, research on association of trade, etc. Again, their competition may reveal their range of wages directly on their job listings.
On the other hand, when any of their staff member moves around the market, they should not get astonished on finding an exponentially better package of compensation within any of their target competitors. The compensation offered by the competitors and their package of incentives would also contain those initiatives the competition is engaged in, such as an interactive contest among the sales teams.