Online recruitment agencies are always looking towards business practices to ascertain how and why a candidate chooses a particular job. Aside from enjoyment and flexible working which often top lists of most desirable work benefits, salary is an important part of a candidate’s choice. So how can a business decide how much to pay its employees?
What is the Job?
When trying to find staff and employees, it is important to adequately define the job role so that the expectations of the candidate match that of the business. It may sound better to complicate the job title to make it sound more impressive to potential candidates, however if the proposed salary does not reflect the title it can cause disillusionment. Understanding the nature of the position, including how much other companies are paying for the same job, is a good starting point when devising a salary or plan of payment for new employees.
With talent shortages and more startups than ever, the issue of money and wages has rarely been more prevalent. SMEs can decide upon competitive wages in order to attract the best quality candidates, however they must define whether workers are exempt or nonexempt. For instance, employees who work a set number of hours per week and who do not qualify for overtime and must be paid a yearly salary are exempt, whereas nonexempt employees are paid an hourly wage and qualify for overtime should it be necessary. If an employee is paid hourly then it may be slightly easier to determine what amount to pay as there are government guidelines regarding minimum and living wages that must be adhered to.
Living on a Salary
There are various factors that determine the rates of pay for employees that should be considered during the process of small business recruitment. Employers should consider the following aspects when deciding on salaries:
• Your company’s reputation – If your business has a great reputation it may be easier to attract talented candidates without having to pay a huge salary. Over two thirds of workers value flexible working over their salary too so provided your business has the right perks, salary may not need to be top of candidates’ lists.
• Experience – Candidates with more years of experience are likely to command a higher rate of pay. If you require an employee who needs little training and is ready to hit the ground running, you must expect to pay them adequately for it. Or, if you can afford to spend time training someone up who has less experience, they may accept a lower wage initially and work towards a payrise.
• Demand for talent – Reports indicate that the UK is suffering from a huge soft skills shortage, with those new to the working world lacking in the office skills needed to understand a modern workplace. Expect to offer salaries that match the need you have for talented well-rounded employees – you get what you pay for so if you need someone top notch, you must pay a top notch salary.
• Cost of living – The cost of living in many cities in the UK is rising far above what is offered in terms of salary. The importance of the emotional wellbeing of an employee should be reflected in the salary offered to them; employees must feel valued and able to live their lives with an adequate income. Companies in big cities should expect to pay more than those in smaller towns or in the countryside.
Salary is not the most important aspect of a candidate’s decision making process. Reports show that things such as flexible working, health and dental care and company culture are among the most important things candidates take into consideration when choosing a job. However, money is what makes the world go round, for better or worse, so paying an employee what they deserve is imperative if a business is to successfully attract the talent they need to ensure their business thrives.