“External,” also known as global competitiveness, has become an essential aspect of the business. Employers who understand and master this concept are better equipped to attract and retain top professionals, build a strong employer brand, and ultimately achieve greater success in their industries.  

By consistently evaluating and enhancing your competitiveness, you can remain relevant in today’s ever-evolving business landscape. Learn how this concept can impact your organization and how it can effectively strengthen your position in the industry.  

What Is External Competitiveness? 

External competitiveness refers to an organization’s ability to attract, retain, and motivate employees compared to other companies operating in the same industry or labor market.  

In essence, it’s about how well an organization positions itself as an employer of choice to draw top candidates from the external job market. 

Key Contributors to External Competitiveness 

It’s common knowledge that paying more than other employers makes it easier for an organization to attract and retain the best candidates. However, global competitiveness is much more than offering competitive pay—it’s a multidimensional concept that encompasses various factors, including: 

1. Compensation and Benefits 

One of the primary aspects of global competitiveness is how an organization’s compensation and benefits package compares to those offered by competitors. According to Gallup, 64% of employees say a significant increase in compensation or benefits is “very important” when choosing their next job.¹  

Base salary, performance-based incentives, bonuses, PTOs, healthcare benefits, and other workplace perks are increasingly becoming factors that impact how much an organization stands for current employees and potential candidates. 

2. Work-Life Balance 

According to Gallup, second on the list of what employees consider most important is a greater work-life balance and personal well-being. Around 60% of respondents said that the freedom to choose when, where, and how to work has become very desirable.¹ Organizations that promote flexible work arrangements and support employees’ personal lives tend to be more attractive in the job market. 

3. Career Advancement Opportunities 

In light of the great resignation, many employees, precisely 63% according to Pew Research Center, quit because they weren’t offered growth opportunities.² This factor is often overlooked, but it dramatically impacts job satisfaction and employee retention.  

Employees are more likely to stay with a company that provides career growth and development opportunities. Add to the fact that organizations with clear pathways for advancement and skill enhancement are considered more attractive to ambitious professionals. 

4. Company Culture 

“Company culture” has become a hot topic in the business landscape. This refers to the shared values, beliefs, attitudes, and behaviors that shape an organization’s overall environment and characteristics. A strong company culture aligns employees with the organization’s mission and goals, fosters a sense of belonging and purpose, and promotes positive working relationships.  

The key to attracting more candidates is to foster a positive, inclusive, and supportive culture. It immediately gives organizations the edge against those with less favorable environments. 

5. Employer Branding 

An organization’s reputation and brand image in the job market plays a critical role in determining its competitiveness in the job market. Positive reviews, employee testimonials, and recognition as an employer of choice can enhance an organization’s reputation and attract top candidates. 

Striving for a unique, competitive, and attractive brand image can quickly increase your chances of being known. As they say, the best marketing strategy is through word of mouth. 

6. Diversity and Inclusion Initiatives 

Inclusive hiring has become an integral aspect of the modern workplace. Organizations that prioritize diversity and foster inclusive environments are more likely to attract a diverse pool of candidates. Today, most employees prefer joining a company that stands for what is right, providing equal treatment and opportunities. By positioning yourself as an inclusive company, you can already appeal to younger generations. 

Related Article: National Employee Benefits Day 2023: A Call for Personalized Employee Perks 

Why Does External Competitiveness Matter? 

Being externally competitive isn’t just about the benefits it holds for employees. It can benefit the organization in many ways as well. 

1. Employee Attraction 

The competitive search for talent is still a concerning issue. According to the US Bureau of Labor Statistics (BLS), there are still 9.8 million vacancies, and about four million employees were reported to have quit their jobs as of the last business day of May 2023.³  

In a competitive job market, top-performing candidates have choices and are likely to be enticed by more lucrative offers from competing employers. Externally competitive organizations are more likely to attract the best candidates, giving them an edge in securing highly skilled individuals. 

2. Employee Retention 

High employee turnover is expensive for a company in terms of recruitment, training, and lost productivity. A competitive compensation package can help attract skilled candidates, but more importantly, it helps retain talented individuals within your organization. 

When employees feel that they are being adequately rewarded and recognized for their efforts, they are more likely to stay loyal to the organization rather than seek opportunities elsewhere. 

3. Improved Employee Productivity 

When employees feel cared for and appreciated, they are more likely to be motivated and committed to their work. Offering wellness-focused perks, such as health insurance, gym memberships, mental health support programs, and other bonuses that promote work-life balance, such as paid time off, parental leave, or on-site childcare facilities, can reduce stress levels and improve focus at work.  

When employees have access to resources that promote physical and mental health, they are more likely to maintain a healthier lifestyle and experience reduced stress levels. This, in turn, leads to improved morale and reduced absenteeism, benefiting both the employees and the company. 

4. Competitive Advantage 

The workforce becomes a key differentiator in industries where competitors offer similar products or services. A company that offers attractive perks can gain a competitive advantage by having a highly engaged and motivated workforce, leading to improved customer satisfaction and loyalty. 

Balancing Internal Equity With External Competitiveness 

The global competitiveness of an organization is not determined in isolation but rather heavily influenced by market forces, industry trends, economic conditions, and the availability of skilled professionals. The job market has undergone significant changes in recent years, primarily influenced by technological advancements, globalization, and changing workforce expectations. 

The emergence of remote work, the gig economy, and a more mobile workforce have further intensified competition among employers seeking the best candidates. As a result, traditional hiring practices and compensation models have been challenged, requiring employers to reevaluate their strategies to remain relevant and competitive.  

In a move to improve global competitiveness, challenges may arise with maintaining a fair pay structure among employees in the organizations. However, one cannot be paid attention while the other is neglected. 

“Reconciliation between the two is essential for the program to be regarded as equitable, competitive, and appropriate.”– says Robert Greene, Ph.D., CEO at Reward $ystems, a faculty member at DePaul University in their MSHR and MBA programs and Consulting Principal for Pontifex.⁴ 

Related Article: How to Answer the Top 3 Questions Employees Have About Pay Equity 

7 Strategies for Maintaining Balance 

While striking the perfect balance between internal fairness and global competitiveness may be challenging, employers can implement the following strategies to address this issue effectively: 

1. Conduct a comprehensive compensation analysis. 

Conduct regular and thorough compensation analyses to understand the prevailing market rates for various roles within the organization. This data-driven approach will help ensure that salary offers are competitive without creating significant disparities internally. 

2. Consider using the total rewards approach. 

Expand the scope of compensation beyond just base salaries. Consider offering attractive benefits packages, performance-based bonuses, stock options, and professional development opportunities to enhance the overall value proposition for employees. 

3. Engage in transparent communication. 

Be transparent with employees about compensation practices and how they align with the company’s overall compensation philosophy. Transparent communication can help build trust and understanding among employees, reducing any inconsistency. 

4. Establish career progression opportunities. 

Create growth paths for your employees within the organization, enabling them to see how their efforts and development can lead to increased compensation and advancement. 

5. Incorporate performance management. 

Implement a robust performance evaluation system that ties compensation to individual and team achievements. This will help ensure that rewards are distributed based on merit and contribution to the organization’s success. 

6. Adopt flexibility and customization. 

Offer flexibility in compensation packages, allowing employees to customize benefits according to their needs. This can be a valuable perk that enhances overall job satisfaction. 

7. Stay agile. 

Continuously monitor and adapt compensation strategies to reflect changes in the job market, economic conditions, and industry standards. Keeping up with the changes lets you be one step ahead in the industry and among competitors.  


At ACS Professional Staffing, we recognize the pivotal role that internal equity and global competitiveness play in today’s rapidly evolving job market. Our seasoned experts work closely with organizations like yours to devise innovative compensation strategies that align with market trends and your unique requirements.  

Through thorough compensation analyses, we gain insights into industry-specific salary benchmarks, ensuring your offers remain competitive and enticing to top professionals. Transparency is at the heart of our philosophy, and we believe in open communication with both employers and employees regarding compensation practices.  

By fostering a culture of trust and understanding, we mitigate imbalance and promote employee satisfaction, leading to higher engagement and productivity. Contact us today to learn more about how we can help! 


1. Wigert, Ben. “The Top 6 Things Employees Want in Their Next Job.” Gallup, 21 Feb. 2022, www.gallup.com/top-things-employees-next-job. 

2. Parker, Kim and Horowitz Juliana. “Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected.” Pew Research Center, 9 Mar. 2022, www.pewresearch.org/majority-of-workers-who-quit-a-job-in-2021-cite-low-pay-no-opportunities-for-advancement-feeling-disrespected. 

3. “Job Openings and Labor Turnover Summary”, US Bureau of Labor Statistics, 6 Jul. 2023, www.bls.gov/news.release/jolts.nr0. 

4. Greene, Robert. “Balancing Internal-Equity With External-Competitiveness: A Challenge In Today’s Volatile Environment” 22 Jul. 2020, www.linkedin.com/balancing-internal-equity-external-competitiveness.