One of the key reasons people work is, of course, money. Although money is just one component of employee satisfaction, how much you pay your employees and the factors you use to establish pay scales and award raises, bonuses and incentives can profoundly affect the quality of your workforce. Employees who are underpaid are more likely to seek new employment. As a result, it's important for small businesses to offer an employee compensation package that meets or exceeds the average for your region or industry.
Creating a Compensation Package
Having access to up-to-date, region-specific salary information for the positions you need to fill can help you structure your wage policies and, in the process, provide you with a competitive advantage as you build your employee compensation package. Government and association reports, as well as salary surveys, can be valuable ways to benchmark your compensation levels and identify trends affecting wages at small businesses like yours. Robert Half produces annual Salary Guides that cover starting pay for thousands of positions in a variety of professions. Our Salary Centres feature additional commentary on hiring trends and a Salary Calculator.
Employee Compensation – on a Budget
If you lack the budget to raise salaries, you can still distinguish yourself from other employers by providing special perks not everyone offers or focusing on elements that increase the appeal of your workplace. Some small businesses opt for variable pay programs in which incentives, bonuses, commissions, profit sharing or lump sums are awarded periodically in addition to base salary. The additional employee compensation package is generally tied to individual performance and the company's profitability.
To ensure your employee compensation package is current and fulfills the needs of your staff, hold two-way discussions with employees periodically. Find out which incentives are most important to them so you can continue refining your offerings.