Employee pay may be classed as an operating expense, but like any good investment staff salaries can deliver healthy returns.
Your business may have a great product or service but the true strength of the firm lies with your people – and top talent deserves to be well remunerated.
Salary levels are still a crucial element when it comes to attracting and retaining the best people. Quite simply, companies that do not offer competitive pay can put themselves out of contention when it comes to sourcing skilled talent in today's recruitment market.
Let’s take a look at how a smart salary policy can support your business.
A competitive salary shows you care
A carefully constructed salary policy shows you are committed to your team, and this in itself can be a tremendous incentive for your employees. Ensuring that your salaries are competitive for today's market is an important consideration. Benchmarking the salaries offered to your employees using relevant industry publication, such as the Robert Half salary guide, is one way to ensure your remuneration packages are competitive.
Your concern for the wellbeing of your employees filters through to morale and productivity.
Low salaries are false economy
Successful staff retention should always be a core business goal. Higher remuneration however is still a key reason for leaving a job. In order to attract and keep top talent on the payroll, proactive companies should adjust their remuneration policies to ensure their offers match or exceed averages in their location and industry.
When employees leave your company the impact on your organisation can be significant. Project timelines may suffer – costing the company additional time and resources to resolve.
Filling that vacancy comes with an additional cost burden. Because the hiring process takes many resources like developing and publishing an ad, time for screening applications, invitations to interviews, rejection letters, time spent for the interview, onboarding & training costs etc., the financial resources can easily escalate if companies need to find a new hire. As well, not having the right person on board may mean the company isn’t able to reach its growth targets. The specific consequences of a bad hire however are not limited to an additional expense for recruiting again. It can also affect office morale.
These financial repercussions can be avoided simply by developing a competitive salary policy.
See your people as an asset – not an expense
It can help to view your employees as appreciating assets of the business. Sure, you’ll outlay costs initially but over time your team will bring knowledge, experience and loyalty to their acumen – qualities that will add value to your firm. The challenge for business leaders is to stay up to speed with current salaries and remuneration trends so you can offer competitive pay packages to your employees.