This post is part of a larger guide: TQR’s 2020 Salary Guide. Click here to get the full guide free!
One of the questions we ask our clients when we engage with them is, ‘why would a high performer want to work for your company.’ Sure, you evaluate the candidate and select the best for your team, however, when you uncover a gem, are you able to offer them a competitive compensation package? More importantly, are you positioned to retain employees?Here are the steps to developing an attractive level of compensation.
Step One: Define the Role
Although it may seem elementary, communicating the skills, experience, and education required for the job will help you determine a proper title and level of compensation. You should be able to answer the question, what value does this position bring to the company? What is the role worth? Regardless of the candidate, paying over the amount the job is worth is not good for business. When marketing your job, the job title matters. The reality is most candidates will search positions by title or a range of titles; you will need to do some homework and look at what the market is paying for your role and make sure the title matches well. Hint: a recruiter within your industry is a great source to start with to provide help with both an equivalent title and salary range.
Step Two: Review Your Budget
Each company will have its internal budget to adhere to, and that’s an essential part of any business. What is the pay range for the role and what will be our criteria for selecting candidates at the low end of the scale vs. the high end of the scale? Start with what is the most you will consider paying for the position and work back from there. On the low end of the scale, looking at the market, what are other companies willing to pay? The region also matters when setting the budget. The cost of living varies a great deal across the country and the same job in California vs. Mississippi should have a very different pay range to attract the right candidate. There are plenty of available tools to determine the cost of living by City and State.
Step Three: The Overall Compensation Package
How do your benefits stack up? Employer-paid, medical, dental, and vision go a long way in a time of uncertainty within healthcare. Do you offer other perks that your competitors might not? Do you offer flex-hours or work from home privileges? Are you a start-up with all the excitement of potential massive growth? If you have a tight budget, perks that require less cost but more flexibility to employees is an excellent option and highly desired by high performers.
Step Four: Consider Variable Compensation
Employee incentive programs are on the rise and are an excellent tool to attract and retain top talent. Even if you can’t afford to pay top dollar in salary, determine what you consider to be a fair wage and offer an individual incentive plan that will allow top performers to excel and get compensated above and beyond for their talent.
Step Five: Retain, Retain, Retain
Protect your investment in highly productive talent by keeping an eye on the market and paying accordingly. One size does not fit all. Be willing to pay outliers more to keep them; it is more than likely that the value they bring to your company is far beyond the average, yet you will only need to pay them 20% to 30% more.
This post is part of our larger annual Salary Guide.