It is never an easy task deciding how much you should be paying your employees, even more so if it something you have never done before. It is important to find a good balance between paying enough to get the best possible staff, whilst not overpaying. You never want to pay more than the job is worth to the business, a salary is an investment like anything else and you should be able to see a return. Obviously, it is also vital to ensure you are complying with all wage laws and properly managing your payroll requirements.
Do your research
One great place to start is to research what other comparable businesses are paying for similar roles. You can often find this information on job advertisements and job boards. Spend some time looking online at similar roles, make note of things such as the duties and responsibilities of the position. Also looking in the same geographical area as your business will give you a good basis for comparison and give you an insight into what your competitor are willing to pay. Not all job adverts will state exact salaries, but many will at least offer a salary range to give you some indication of where to start. Check out this guide on researching salaries.
Look at salary surveys
Tools such as salary surveys can be used to determine the average salary for a specific job and industry. They are compiled from data collected from several employers, which is then analysed to determine a median salary. Salary surveys can focus on more than one job title, location and industry and are often conducted by specialists within the HR industry. When looking for a salary survey, be sure to find a reputable source that is proactive at keeping their information up to date. Salary surveys can quickly become outdated because of the time-sensitive information.
Do your maths
As mentioned earlier, a salary is an investment and therefore should have a return. For some positions, this is easy to work out. For example, for employees who are directly bringing money into the business, such as sale staff, you can easily work out if their salary is covering the profits they make; if they bring is £100,000 in profit then it is most likely worth paying them £20,000. For administrative and support staff this can be harder to work out as they aren’t directly bringing money in. The best way to look at their value is to look at the money they are saving your business, as opposed to the money they make. A good way to determine this is to look into how much it would cost to hire virtual assistance to complete their work instead but be sure to carefully think about whether virtual staff would realistically work for your business. Find out more about virtual assistants here.
It is also good to remember that some people value more than just money when it comes to their jobs. As a business there are plenty of additional benefits you can offer your staff to enhance their full package, such as flexible working hours, casual dress, extra holidays and telecommuting. All of these things can help enhance the appeal of your business to potential employees, and a lot of them won’t cost you a penny.