You Can Afford to Provide Fair, Competitive Employee Compensation

Picture of Gina Blitstein Gina Blitstein combines her insight as a fellow small business owner with her strong communication skills, exploring topics that enhance your business efforts. That first-hand knowledge, matched with an insatiable curiosity to know more about just about anything, makes her a well-rounded writer with a sincere desire to engage and inform.

You Can Afford to Provide Fair, Competitive Employee Compensation

Attracting talented employees is important to the success of your business - and talent doesn’t come at bargain prices. That’s why it’s critical that the compensation you offer for positions in your company is both fair and competitive. It’s equally important, of course, that you can actually afford your payroll. How do you arrive at a salary or hourly rate that you can justify paying while adequately rewarding your employees?

Considering Employees

It should come as no surprise that employees who feel they are well-compensated have higher job satisfaction and are more loyal to their employer. There are a number of online resources which offer advice and current compensation ranges for jobs. These can help provide a ballpark for you to begin crafting a compensation package for employees. You’ll also want to consider some additional pieces of the compensation puzzle, including the following:

Consider the cost of living in your area - You may be offering what, in many areas of the country, is a generous salary - but if the cost of living is particularly high, your “generous” offer may come across as a slap in the face. Be certain that the compensation you offer is commensurate with the standard of living you intend to provide where your employees live.

Avoid a wage gap - Look for indications of wage gaps among your employees. Even if you don’t mean to, you may be perpetrating one. All employees should have equal opportunity to attend trainings, work on special projects and gain specialized experience. This will ensure that your entire team remains equally promotable. If you offer compensation based on an employee’s previous salary, you may be unknowingly perpetuating a wage gap that started with their former employer. Make policies around compensation clear and transparent so that wage gaps don’t happen - or continue.

Account for special skills and/or experience - Offer additional compensation for those employees who bring something extra to the position. Should they have additional experience or training that will make them even more valuable, be sure to pay them accordingly, or they will surely take their talents elsewhere.

Considering the Business’s Bottom Line

While ideally, you’d be able to offer generous compensation to a desirable employee, the fact remains that your business has its financial constraints. Factor these elements into the equation to make compensation fair to your company’s budget:

Remember all the benefits - There could be some savings for the business by providing extra, non-financial benefits. Flexible scheduling, the option to work from home, stock options… these are ways to provide considerable value to employees without direct out-of-pocket expenses to the business. You may also be able to do away with certain costly amenities, like office space and equipment by hiring remote employees.

Consider the value to the business - If a generous salary simply seems like too much for the business to bear, analyze the value of the position in relation to the business. This may help you to better justify the expense of paying talented employees. Can getting - and retaining - a star employee help your business make substantially more? There’s a high probability that it will.

Hire the multi-talented - Look beyond the “one-trick ponies” and seek out employees who have multiple talents and skills. These employees can perform a wider array of tasks, wear various hats and serve your business in a number of ways. Employees like this may help you fill several positions with just one person, eliminating the need for several new hires.

It is possible to do both: Pay employees competitively and fairly, and afford to do so without suffering for it financially. It’s a delicate balance but it can be achieved with some considerations for their needs and yours. In the long run, all parties involved will be better for the effort.

How well-compensated are your employees?

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