Are You Offering Competitive Compensation?
One of the toughest decisions small business owners have to make is how much to pay their employees. Too little and they risk high turnover and low morale; too much, and they’ll never get ahead financially. Calculating salaries is a tightrope walk that few new employers feel comfortable with. Do you know if your salaries are competitive?
Use the right tools
Fortunately, there are a number of readily available tools at your disposal to help you calculate the ideal salary for each employee in your company. It’s important that you use all the resources you can, because your employees are almost certainly already using them, and they know exactly how much they should be making. Start with free tools from the Bureau of Labor statistics like their Consumer Price Index and Employment and Wage Surveys to get a rough idea of the cost of living in your area and average salaries for employees in your industry. For more detailed information, consider using a salary calculator from a site like Salary.com.
Allocate funds
When deciding on compensation for each employee in your company, one of the things you’ll want to consider is which positions you’ll want to offer the most competitive compensation. For example, if you’re hiring for a position known for high turnover, you may not want to offer as competitive a salary as you would for an employee with many responsibilities who would be difficult to replace.
Compensate with benefits
If you can’t offer the same high salaries as other employers in your industry, consider making up the difference with benefits. Certain benefits like free parking may not cost you a whole lot, but could make a world of difference to an employee comparing your offer to another. Show employees and recruits how much their benefits are worth through a . Compensation reports clearly and concisely show how your benefits bridge the gap between your offer and the seemingly higher salary at another company.
