(1) Do your homework
Market forces will generally dictate salaries, so it’s important that you know the market for the role you want to fill and the economic forces that influence it.
If there arent many people in your local area who have the skills or experience you’re looking for, or if theres a lot of competition in your industry to fill that kind of role, then you might have to pay more to attract applicants, or offer them other incentives to come and work for you.
Do your research on what the going rate is by consulting recruitment agencies, local papers, your trade press or jobs websites. When interviewing candidates dont feel shy about asking them what they earn in their current job this can give you a good idea of what you might need to pay in order to attract that person.
(2) Whats it worth to you
If it’s a role thats vital to your companys success, such as sales manager or head of your customer relations team, then you may decide that it is worth paying a premium to ensure you attract the right person.
(3) Money isnt everything
Research has shown that salary is an important factor, but actually it isnt most peoples prime consideration. So what else can you offer applicants
You need to understand what motivates and really matters to the kind of person you want to attract. Is it a friendly, fun, vibrant office atmosphere Feeling valued Or perhaps it’s flexible working conditions or great experience Remember: a job is more than simply what it pays.
(4) Know your policy and make sure your staff do too
When and how do you review pay with your existing employees It might be tempting to keep quiet on this, for fear of raising expectations for more money. But, in my experience, honesty and transparency around pay works in your favour.
If you ensure your staff know when you will review their pay, and most importantly, what you will base their reviews on, then everyone knows where they stand.
(5) Pay reviews without tears
How often should you review pay Most companies do it annually, which tends to work well. You can either do one review for everyone at the same time, or do it on the anniversary of each employees joining date. Its fine to have individual reviews outside of that time, as long as you’re clear on why you’re doing it.
Continue reading on the next page to understand how you can assess how much pay should increase by and what to do if you can’t afford to pay additional wages.