If you are looking to attract and keep the best employees, you have to pay them the most competitive salaries possible. But you also have to stick to a sensible budget because you also have to ensure that you don’t lose money by giving unrealistically high salaries.
In general, to establish a competitive yearly employee salary, consider all the payments that your employee will receive. For instance, if you provide health insurance, allowances, and bonuses, you should factor in determining a salary range.
To pinpoint that sweet spot, check this quick guide to determine the ideal salaries for prospective employees.
Research and Then Research Some More
Your salary offer must be on par with the salary ranges that similar companies are paying. Start by asking around in your industry. You should also scour career boards and job listings online to check the national average for that specific position you want to fill. It will also help to narrow down the search by location since this will significantly affect acceptable salary ranges and cost of living.
Likewise, consider the experience level you want from a new employee since more experienced professionals will need higher salaries than less experienced employees.
Select an Affordable and Reasonable Salary Range
After you’ve determined the average salary range for the open position, you’ll then have to review your finances to identify a reasonable amount your business could comfortably afford. The pay range you’ve settled on must be within your industry’s average salary range without costing your business more than it could reasonably afford.
Additionally, you must consider how much extra money the prospective employee would be saving for and bringing in to your business. Once you’ve pinpointed the max pay range your business could afford, you could then go into negotiations confident that your offer is fair and competitive and without going over your budget.
Offer a Competitive Benefits Package
While a competitive salary is crucial, keep in mind that a paycheck isn’t enough. The most responsible companies provide their employees with a competitive employee benefits package. This package should include health insurance, job flexibility, health and wellness benefits, professional development opportunities, and retirement savings plans.
To attract top talent, you must supplement a competitive salary offer with extra benefits and sought-after company culture. This particularly applies to businesses that don’t have the means to offer very competitive salaries but want to give their employees a competitive compensation package.
Find Out Prospective Employees’ Salary Expectations
Once you’ve determined a suitable benefits package and salary range, try to find out if the potential employee’s salary expectations are within your budget range. If every applicant wants a salary out of your budget, you need to reevaluate your financial means or expectations.
If a particularly desirable candidate’s salary expectation is just slightly higher than you can give, try highlighting your competitive employee benefits package. Hopefully, your extra benefits are something that the candidate needs as well.
Also, remember that you want your new employees to be satisfied with their salaries. So never lowball or pressure them into accepting your offer because they’ll be unhappy and unproductive at work. Take note that employee satisfaction is directly related to lower turnover rates and increased productivity.
Determine employee salary ranges that are on par with competitor offers and industry averages. Offer a competitive benefits package to make the position more attractive to the best people. These are the basic things that can help you determine a prospective employee’s salary that will be work for everyone.