How to Pay Competitive Employee Wages Without Breaking the Bank

Tue, Feb 28, 2012


With unemployment rates still running high, there is no shortage of qualified applicants for whatever position you may be looking to fill at your company. But that doesn’t mean you can offer exceedingly low salaries and expect the position to fill itself, especially if you want your future employee to be a productive member of your company for years to come. Filling vacant positions costs money and time, and both are valuable. So you’ll want to offer a competitive salary to your employees. But how do you decide on a salary that fairly rewards your employee without breaking the bank?

Start with a good amount of research. There are several publications, published annually, that compare salaries for difference professions. NACE puts out a yearly Salary Survey, that offers the standards for entry level positions in accounting, engineering, and computer programming, among many other related fields. It also offers different starting salary levels based on an employee’s level of education. It outlines salaries for those with a bachelor’s degree in nearly eighty separate disciplines, forty for those with a master’s degree, and more than twenty for those with a doctorate. But beyond just laying out the varying salary levels, it will also detail the range of offers, so you can be prepared for the final negotiation. There are tons of other options for this sort of research, with websites such as salaryexpert.com and payscale.com leading the way.

Do some soul searching. Only you truly understand the needs of your business, so you’re the only one who will be able to define what a fair salary offer is. How important is this new person to your company’s success? Are they a manager, an integral team member, or an outlying part of the support staff? Is the position you’re filling likely to generate revenue? What would it cost you in overtime or outsourcing if you didn’t bring someone in for that position? For example, a great accountant in a ten-person office may be worth much more than someone who is part of a massive accounting department at a huge corporation. The wage should reflect the amount of responsibility you’re expecting from that person, as well as how difficult they’d be to replace once they’re a part of the team.

Pay for quality. Your company deserves the best. A business is only as strong as its employees, and though it might cost you a bit more in salaries, it will save you in mistakes down the road. Remember these people are your greatest asset, and training is expensive and time-intensive. Offering a competitive salary will attract the best and brightest to your company, and help keep your current employees from straying elsewhere.

Think outside the box. Salary isn’t the end of the game when it comes to compensating your employees. There’s other ways you can show them they’re needed, while saving some cash along the way. Things like company cell phones and computers will save them money on something they’ll need to use for work anyway, and you can write off the expense instead of laying more money out in salaries. Company credit cards can also be a fantastic perk. Give your employees Chase freedom rewards cards they can use for business expenses. You’d have to pay the expenses either way, but with the cards your employees can accrue rewards points they get to use. Helping your employee pay for flight upgrades or vacations without extra expenditure will not go unnoticed.

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