Why Exceeding Your Competitors Wages Is Smart
When job seekers are looking for work, one of the most important aspects of their search is the compensation plan. They are looking for a job that pays well, offers extensive benefits, and allows them to do the work that they love. For some, pay is the deciding factor when deciding between two jobs. As an employer, it makes sense to offer a competitive wage to not only attract top talent but to keep them.
If you are a small or mid-sized business owner and aren't sure where to start when it comes to putting together a compensation plan for your workers, start with the competition. Check to see what people are making in other businesses similar to yours and, if possible, exceed it. Smart business owners understand the benefits of competitive pay and know that it helps their businesses in three main ways:
Exceeding your competitors wages helps to attract top talent
Depending on the industry, it can take the average job-seeker between three and five months to find their ideal job. This means hours spent browsing the web for job openings, attending hiring events, and applying for jobs they never hear back from. If your goal is to attract top talent, you have to stand out from the competition. One of the best ways to do that is to exceed your competitor's wages. As job seekers wade through all of their options, a higher-paying position will immediately grab their attention. Exceeding your competitor's compensation package is vital when seeking out top talent with a very specific skill-set.
Sometimes, the employee that you are looking for is not actively seeking a position. These are considered passive job seekers; those who are content in their current job but wouldn't turn down a great offer. Job recruiters and staffing agencies work to find this kind of talent, and if your company is currently offering higher wages than your competitors, it gives you an advantage to recruiting this top talent.
Exceeding your competitors wages reduces turnover and retains high performing employees
Unfortunately, loving what they do is typically not enough to keep a good employee around. They have to be paid enough to not only live in the current economy but also feel like their strengths and abilities are being compensated. Low pay is one of the biggest reasons that employees leave a company, which results in expensive turnover rates. To keep top talent, you have to compensate for your top talent. If your employees see that your competitor is paying significantly more than you, nothing is keeping them from jumping ship.
Don't lose some of your best assets because you're not willing to compromise in the compensation department. It's important that you are aware of what your competitors are paying their employees- because your employees are.
Turnover can be extremely expensive, especially for small and mid-sized companies. All of the marketing, interviewing, training, and onboarding can take valuable time away from making a profit. Most of the time, an increase in wages (for an employee that is actively benefiting the company) is more cost-effective than losing the employee and starting over.
Exceeding your competitors pay contributes to a positive company culture
If you don't show your employees that their strengths and contributions are appreciated, they'll find an employer who does. While accolades, reward systems, and notes of gratitude are always a nice touch, these things don't pay the bills. Employees who are actively contributing to the growth of a business should be compensated monetarily. When employees are paid more and feel more appreciated, they are happier at work. Happier employees typically mean more productive employees, and this is good for business.
As a business owner, it's important to create a space where your employees feel seen and appreciated. One of the best ways that you can do this is to make sure that you offer competitive compensation packages. By exceeding your competitor's wages and compensation packages, you're telling your employees that you want to keep them and that they're worth the cost.
Handling payroll is a full-time job, and many small to medium-sized businesses end up having to create an HR department to keep everything organized. Other California businesses, however, hire staffing agencies to help outsource many of the duties that a traditional HR department would handle, including payroll.
If you're not sure where to begin when it comes to paying your employees or offering competitive wages, get connected with a professional staffing agency today. They can help you navigate the details of payroll and compensation packages so that you can attract, keep, and accurately compensate top talent.