By: Tina Samuels
Everyone in business world knows: money matters.
This is particularly true when you are running a business. You need to pay bills, keep employees happy with their salary, and still manage to make a profit.
The answer to keeping a company running doesn't involve paying the least amount possible to employees. Keeping pay rates below the competition is one way to ruin your own company. You'll need to offer pay that is high enough to nab you high quality employees, but not so high that you can't keep things afloat.
What Should You Be Paying?
Figure out your pay practices before interviewing applicants. If you don't know what you should be offering or how to counter pay requests from applicants, you won't be able to make the right decision. Review the previous payment practices of your company.
You can base some of your decision on past decisions, but keep in mind your company's budget.
Can you afford to pay more without affecting customer, product, or total profits? Would an increase in pay keep better employees which in turn can improve business? All of these questions should be figured into your decision on what you should be paying.
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What Are Competitors Paying?
It can be hard to find out exactly what your competition is paying their employees.
If a company is paying lower rates, they don't want to be outpaid by the competition. There are websites, such as Payscale.com, that can give you an idea of what is being paid to employees in your industry.
When advertising the position you are wishing to fill, define the responsibilities of the position clearly. If you are seeking an entry level applicant, say so. Understand that highly experienced and qualified applicants will demand a higher salary.
To keep everyone on the same page, set your pay scale.
Communicate to applicants clearly what this scale is and what you base it on. Entry level applicants will start at the low end, while experienced applicants may receive the top end of the scale. You must consider future events in your scale, such as raises for cost of living, performance, and experience.
If you are paying a lower rate than competitors, think about sweetening the deal for applicants.
Add more benefits or job perks in order to lure quality applicants. While a high pay is nice, a full benefits package and perks such as casual clothing days, days to leave early, and options for partial telecommuting can make your company more appealing.
It can cost you substantially less to offer in house perks or great benefits when trying to beat the competition. Most perks are known as 'quality of life' perks.
These can include flex time, sweet vacation or personal day packages, discounts at local eateries and business, or almost anything that can improve the quality of life for employees.
Budgeting for the future, considering you competition, and adding perks is a sure way to ensure you will tempt the best quality applicants to your company.
About the Author: Tina Samuels writes on mobile payments, social media, and small business topics.