Determining compensation for new staff is always pivotal in the hiring process. This is the point where an employer can create or break trust, as well as set the tone for the entire employment relationship. Remember, you want to pay enough to get the best talent, but not more than what the job is worth. The best way to determine compensation is coming up with a payment scale for smoother fiscal transactions.
Assess the Value of the Position
You cannot correctly determine the salary scale and bonus structure of new staff before assessing the value of the positions you plan to place them. Be specific about the duties and responsibilities of the job, being careful to create a detailed description, the job title, alongside other pertinent information. After establishing the demands of the job, assess the value it brings to your business. The compensation should reflect the responsibilities required for the position, the experience, qualifications, and level of skill.
Benchmark
You can only offer competitive compensation by looking at factors such as the pay standards of your industry, your geographical location, and the size of your organization. Do an online search to gauge how the job is already priced in the market. For instance, you can search for ‘human resource management salary range’, then narrow the search down to your region. You are looking for local guides to understand the position in your area better. You can also choose to drill down more by looking for help from online job sites. You can use advanced search tools to look up specific keywords and categories that match your post to get a good picture of the current market. This is an easy way to determine what an employee expects to make from your company and help you determine if you can sustain the salary for the position. More so, you get a better understanding of how experience, education levels, and qualifications influence compensation.
Create a Salary Structure
With an idea of the median pay and the value of the position, it is easy to set financial parameters. Create a feasible compensation your organization can comfortably release. Determine the minimum and maximum amount you are willing to pay to ensure the salary negotiations do not undermine the capacity of your finances. When deciding on the most appropriate compensation of your new staff, consider each of them individually. If the experience and the qualifications would put your company on a competitive edge, the maximum pay would be the most appropriate for the candidate. If you feel a better employee would secure the position, the minimum wage would be worth.
Factor-in Total Rewards
Consider the total value including benefits, incentives, and other rewards when determining a fair compensation for each position. How would you reward the employees based on their performance? This will help you to leave enough wiggle room for future increases when deciding on the right compensation. Common perks include commission, health insurance, bonuses, among others, which should inspire the employees to be highly productive.
Be Flexible but Realistic
Even with the set compensation range, expect new employees to negotiate. Candidates who know their worth tend to demonstrate desirable negotiations. Employees with professional qualities strive to give their best, and so it is important to make them feel sufficiently compensated. In the negotiations, try to meet the candidate halfway to enhance loyalty.
With enough research, you can create an enticing salary range that will help you draw a solid pool of talent. After setting the compensation levels, be sure to assess them every three years.
