When was the last time you reviewed your employee salaries? Are you confident you are still paying the right wage?
Are there any signs you should look out for, to indicate it is time to reconsider your pay structure?
The short answer is yes…
- If you’re struggling to recruit good quality staff, or don’t even receive any applications for a role
- One or more of your employees tells you they are considering leaving as they have had a much better offer from a competitor
- There is unrest because some of your team feel unfairly paid in comparison to others in the company
- Your management team tell you they feel the business is disadvantaged because of the pay
- Staff morale is low
Whilst you shouldn’t automatically assume any of these signs mean your pay is wrong, I encourage you to review it.
When we have this conversation with our clients we recommend they adopt a salary range or pay scale, rather than a definitive salary for each role.
What do I mean by that?
You identify a minimum and maximum salary you are prepared to pay for a role. You would determine where an individual would sit on that scale based on a number of factors including the person’s qualifications, experience and even their current salary.
This approach gives you flexibility not only for recruitment but also for employee retention.
How do you determine what the pay scale should be?
- Consider your location – if you are based in an area that is difficult to access you may need to pay more to attract people. Equally if you are located in an area where salaries are high, such as London, you need to compete on a level playing field
- Have an appreciation of the various disciplines – what do operations managers, or marketing officers get paid in other companies? You can check out online professional magazines or roles on online job boards and social media, such as LinkedIn
- Access interactive data – this is where we can help. We have access to a recommended source of online data that is live and up to the minute.
- Ensure the business has budgeted effectively
Interestingly, in the SME environment, salaries are changing very quickly at the moment. There is a significant skills shortage, particularly in some sectors, and businesses are faced with having to pay competitively in order to attract high calibre people.
Remember, paying well does not guarantee you will attract good people. And neither does it ensure employee satisfaction or retention. But not paying well, definitely impacts morale, motivation and engagement.