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Two ways to ensure you're paying competitive salaries

by , 17 February 2014
If you want to retain your staff, you need ensure you're paying your employees competitive salaries. But how do you do that? You have two options...

Olympic Staffing Services says the adage is mostly true: You really do get what you pay for.

The site goes on to say while this is the case, most business owners and managers aren't translating this knowledge to their payroll. And that could be the reason for increased turnover, lower job satisfaction and decreased productivity.

So how do you ensure you're offering a competitive salary?
 

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Use these two methods to make sure you're paying competitive salaries

#1: Develop pay structures according to guidelines you develop

The Practical Guide to Human Resources Management says must develop these guidelines through stakeholder participation. Examples of stakeholders you may want to include are:

  • Representatives of line management
  • Worker/union representatives
  • Shareholders
  • Your finance department, which has to effect payment and determine the tax implications of your guidelines
  • Your sales and marketing department where sales commission is concerned
  • Operations/production where contract labour is concerned.

Ask yourself these questions when you develop your guidelines:

  • How will my corporate mission, vision and objectives best be achieved?
  • How competitive do I want my pay levels to be?
  • Which skills are in short supply, or are strategically important to warrant better than average pay levels?
  • What does the law dictate?

#2: Conduct market remuneration comparisons

There are three tools you can use to conduct market remuneration comparisons: conduct your own research into market rates, research job advertisements in the media or buy a commercial remuneration survey.

Just keep in mind that it's costly and time-consuming to conduct your own survey. You have to consider the time you'll spend to design the survey, conduct the survey and collect, analyse and report on the data.

This is where commercial remuneration surveys come in. Check out this article, it has key points you must consider when you buy a remuneration survey.

Paying your employees a competitive salary will benefit your company exponentially. So use these two tips to ensure your employees are getting competitive salaries.



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