Pay scales and your employees.
You know how to run your business quite well, keeping on top of the cost of materials, utilities as well as what your competitors are charging. What may mystify you are salary pay scales, Specifically, the amount of compensation and benefits any particular employee should receive. You need to know what to pay your people to attract and retain the best talent. Fortunately, there are some free tools you can use to help you pay your employees what they are worth and keep them from leaving.
Research Government Data
The best source for current wage information is provided by the federal government. Through the US Bureau of Labor Statistics, data is compiled for thousands of positions and that information is available at BLS.gov.
Visit the BLS website to pull up data for a specific job title. You should know that most job titles also have various names. A search of the BLS website can help you identify the title that is closest to the position you are researching.
Consider Local Variations
BLS data covers all 50 states in addition to the District of Columbia. That data includes wage information on the national level with salary averages for the 10th, 25th, 50th, 75th and 90th percentiles. The more experienced the individual and the higher the job requirements, the more likely your pay rate will coincide with a higher percentile.
The data also drills down to the individual states. This is important because salaries tend to vary widely from region to region as well as from state to state. You need to learn what those averages are in your area and plan accordingly.
Consider the Entire Compensation Package
While salary is important, it is by no means the only part of the compensation package. Fringe benefits, including sick pay, vacation pay, health and dental plans, eye care assistance, and a retirement plan are other costs that should be factored. You can leverage your fringe benefits package to attract top talent.
For smaller companies, competing on the same level as large corporations may seem like a losing proposition. This is where you need to emphasize that your business, although small, provides much more flexibility than what they might find with a larger competitor. For instance, you may not be able to match the bonus plan of a larger competitor, but you could offer flexible hours and a work-at-home option one day per week. Employees with families may place more value on a less rigid work structure than on better compensation found elsewhere.
Present Your Offer
With your salary and compensation package information in hand, you are ready to make an offer. If possible, make this offer in person instead of by letter or through e-mail. This will allow you to make a brief case for remuneration, before permitting the job candidate to ask questions. Following that, the candidate would accept or reject your offer, or she may ask for more time to consider it.
You may find that a prospective employee is not satisfied with your offer. Even with the best research accomplished, you may learn that your offer does not meet an individual’s needs. This may become apparent especially if the prospect has done her own research and has uncovered what a competitor pays. Consider meeting her counter offer, if you have the budget to do so and you do not want to lose an attractive prospect. Once you have come to terms you may conclude the process by formally sending a letter to the new employee outlining a start date, salary and fringe benefits.