Selecting a salary for a role is tricker than you think. If the package is too low candidates could avoid you. Offer someone too much and your employees might rebel. Here’s how Aaron Wallis Sales Recruitment thinks you can get the balance right.
1. Review internal and external factors
Every job role is different. It’s important to consider all of the internal and external factors that could feed into your salary decision.
Useful external factors to consider include the availability of the skills you need are. What is the fair market rate for your geographic area? A higher salary may need to be offered if your business is located in London and the skills you’re after are in high demand.
Internal business factors play a large part as well. For example, if you’ve struggled to find someone for over six months and there’s an urgency to fill the position, you may have to increase your salary offers.
2. Consider implementing salary bands
A combination of salary bands and job grades can be a great tool for communicating expectations to your employees.
Job grades are the definitions of your roles, assessing how junior or senior someone is by a specific job title. Salary bands are the ranges of compensation that can fit within a job title.
Having transparent salary ranges by job title can help guide your hiring managers around the ranges of salary they should offer candidates. It also provides motivation for employees to work their way up through high performance.
3. Think about bonus schemes
An appealing bonus or commission scheme can be a key pull factor for attracting top talent to your business, especially in a sales environment. Try to create a bonus scheme which creates a “win-win” for both your business and the employee, where meeting targets will translate into a higher reward for both parties.
Equally, as crucial as an attractive bonus scheme can be to recruiting staff, it can often be a common pitfall for businesses.
It can be hard to change a bonus scheme once an employee has signed a contract, it’s important to ensure that your commission systems are sustainable and that your not placing your revenues under threat.
4. It’s more than just money
Think about the whole package, aside from the monetary reward that comes with the job. Things like the amount of annual leave you receive within a role, as well the opportunities for flexible working and the workplace culture of your business can count for reasons why a candidate should choose your company.
Similarly, if your business expects long working hours, outside of the normal 9-5, you could suggest that you may need to offer a higher salary to entice a candidate to join your company.
5. Be prepared to walk away
As a hiring manager, the last thing you want to do is lose your target and have to start the recruitment process all over again. Maybe you had a second choice, but even having to go crawling back to them is not without its own issues.
However, you can’t be held hostage, and every role has its pay cap. If you’re simply not getting your candidate to see sense, be prepared to walk away.
Offering an appealing salary in the context of the role and your company’s expectations is essential to attracting staff who will hit the ground running. Often it’s a balance between keeping your budgets on track but also providing an incentive for the top talent out there to join your business.
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