Setting Fair Salaries for Future Employees
Are you a small business owner, ready to hire employees? Have you been working alone for so long that you don’t know how much you should pay employees? A salary is an investment, a gesture of faith that an employee will contribute to the growth and value of your company.
While there is no preset way to know the perfect salary, here are some tips on determining what to pay your employees.
Research the Market
You cannot set proper salary parameters without understanding the market. Pay scales are often affected by variables like geography and business classification. You also have to consider education, work experience, and skill levels. Typically, the more education a candidate has, or the more experience, the more they’ll expect to get paid. Start by researching databanks like Salary.com that demonstrate accurate pay ranges for any given position.
Consider the Role You’re Hiring For
You must justify each salary. Divide the positions into two categories: revenue generators and administrative support. The revenue generators must make money, so candidates are only viable if they bring in enough profits to cover their salary. Administrative support employees must provide efficiency, or save money. Therefore, a candidate would not be viable if their work could result in financial loss.
Determine if the Job is a Salary Position or an Hourly Position
Employees are usually paid based on the business field in which they work. Salary-based jobs, where you would pay an employee a flat amount, are often used for roles where results are more important than time spent — a marketing company or an artist, for example. Other jobs don’t necessarily have measurable results, such as jobs in retail stores, and so an hourly rate is fairer. There’s no set answer, of course, but consider the livelihood of the employee as well as what’s best for the business.
To learn more tips and tricks, contact Mantralogix. We are always here to help.