Paying the right salary is about more than just money. Lee Biggins of CV-Library knows how to get it right
What does it mean to offer fair pay? And can you comfortably say that your business is paying individuals what it should be? With 65.3% of Brits believing that they’re underpaid, it’s important to address this issue, especially considering that pay is one of the biggest factors in helping to attract and retain staff.
Figuring out fair pay is a challenge in any business, but this guide aims to resolve your queries surrounding a difficult and sensitive topic.
Listen to the market
Ultimately, the salary which your company offers is what people will be most responsive to. Your company might be highly successful, with an ultra-cool office, but employees won’t care unless they’re part of the rewards.
One of the clearest ways to ensure you’re offering fair pay is to align your rates with the market value of the role. When employees are searching for a job, they’ll see what companies advertise for similar positions. By setting a benchmark, you’ll show that you’re playing to market.
When considering the benchmark, remember to compare jobs in the market requiring similar skills, experience and key tasks. Laying out a detailed description of the role will also help you to think critically about the demands of this position. What would you expect to be paid? What value does it provide to your business?
Be responsive to skills and experience
As mentioned above, skills and experience are critical factors to consider when setting a benchmark of what you’ll pay for a job. These will also help you to set up parameters for a pay range.
Essentially, you’ll create a spectrum of desirable skills and experience, which will be weighted according to their rarity. As a person continues to tick off the criteria that you’ve laid out, pay increase will become more flexible.
The tricky part is deciding how your company rewards expertise in certain areas. Make sure you’ve laid out your decision in writing so there’s no confusion about fairness further down the line. This should include anomalies, such as paying premiums for highly sought-after skills.
Acknowledge strong performance
So you’ve hired an employee and decided to pay them based on the market rate for their position. What happens if their performance exceeds all your expectations of them?
Again, you should write down how you plan to assess the performance of your team and ensure this is standardised. This means that your expectations are quantifiable and attainable. Moreover, how will you make sure your employees succeed without transparent targets in front of them?
Using a system of performance-based pay will allow you to incentivise your workers, so they can see a tangible result that correlates to business performance.
Invest in the best
If you’re forced to go above market value to pay for certain employees who won’t settle for any less, then consider them as an investment. If your company is only willing to offer the minimum going-rate for wages, then chances are you’ll end up with people who are minimally qualified.
Better quality employees will eventually generate a better future for your company. Remember, you get what you pay for.
It’s not all about salary
There are many advantages to offering additional benefits. Workplace perks will play a big role in how you reward employees for their contributions to your organisation. Many businesses are starting to see the value of making sure their employees are healthy and happy. A prime perk is health insurance. With insurance costs rising, a health insurance scheme is very attractive to potential employees. A second one is flexible working. This is one of the most desirable perks as it gives people the autonomy to decide their own working hours.
A gym membership is another popular perk. Gym memberships can be pricey, so subsidising this cost is bound to benefit employees with the bonus of reducing stress. While you’re at it, why not sign up for a membership yourself as staying fit can boost your own and your company’s performance.
The perks that employees receive alongside their salary can be influential when they’re deciding whether to accept your job offer. Employees will take comfort in the knowledge that their wellbeing is recognised.
Although there’s no universal way to decide fair pay, this guide should have put you on the right track to deciding how you will compensate your employees.