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Case Study: Aligning Compensation Structures Across Businesses

Laura Fischer

Feb 6 2025

3 min read

Client Challenge

A leading U.S. plastics manufacturer was seeking an experienced consulting organization to create a common foundation for their employee compensation structure across three separate businesses. Given the unique positions at each site, the sites’ individual approaches to how employees were paid and different geographic pay guidelines, this challenge had to be approached delicately and strategically. This was met with further difficulties, as the markets for each client site were competitive due to low labor supply. Ultimately, the key goal for the company during this HCM compensation project was to ensure employee pay was market competitive and internally equitable so that the manufacturer could effectively recruit, retain, and motivate their employees.

The Solution

We leveraged our expertise in compensation best practices, the labor market, specific jobs and analytical tools to initiate a successful compensation assessment. This involved evaluating every position, from non-exempt to vice president level, and harmonizing all jobs across three locations to develop a new job hierarchy, ensuring pay for 700+ employees was competitive. The market results were then used to design a universal pay structure based on the client’s compensation philosophy and slot the positions by pay grade. Separate structures were developed for production and non-production roles and then by location based on geographic differentials with varying cost of labor. Hourly rates by skill level were also integrated into pay grade ranges.

Throughout this process, aligning the business strategy, reward objectives, client culture, market dynamics, and other important factors were essential in creating effective and sustainable deliverables that could be maintained over time.

The Results

Our work resulted in an executive-level presentation and report that outlined our insights, recommendations, results, methodology and education to maintain the deliverables. We were able to successfully align pay across all locations and integrate hourly rates by skill level into pay grade ranges. We also partnered with the client to ensure internal equity by leveling positions within pay grade and assessing employee pay using well-defined criteria. Additionally, guidance was provided to develop key messages to effectively communicate and implement the outcomes of this significant initiative.

Our results included:

Evaluating and harmonizing jobs across locations
Conducting a market analysis to compare employee pay to the client’s labor markets
Designing a pay structure to support three locations and the client’s compensation philosophy
Incorporating skill-based pay by level for relevant jobs
Identifying and addressing gaps in pay to be internally equitable
Recommending pay guidelines to increase consistent application
Developing key communication for implementation

Our team at Sikich goes beyond traditional recruiting. Our talent acquisition solutions are designed to help you reach your business objectives and empower you to attract and retain top talent through innovative talent solutions. To learn more about how we can help your business, please contact us.

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About the Author

Laura Fischer

Laura Fischer has an extensive background in Human Resources and Organizational Development. She is recognized for building strategic partner relationships by using her keen industry knowledge, strong business acumen and innovative approach to provide unparalleled client service.