Paying people properly and fairly is one of the main ways you’ll keep the best talent – which is more crucial than ever when it’s hard to come by.
But, with the soaring cost of living, and lots of businesses not knowing how to benchmark their reward packages, it can be hard to get it right.
Let’s look at the issues businesses face, and how to work out if you’re paying your staff as fairly as you can.
Understanding the landscape
It’s hard to see the bigger picture if you’re only looking within your own business. One of the biggest challenges businesses face is making sure they’re paying their team a wage that is standard for the industry they’re in.
Salaries can vary vastly across different sectors (even if the jobs themselves are fairly similar), so it’s important to have a clear understanding of the landscape when deciding on pay.
One of the best ways to do this is to work with a recruiter who’s a specialist in your sector. They’ll be able to help you tot up the total cost of the benefits you’re offering and benchmark them to other live vacancies in your market.
Once you’ve benchmarked your roles, make sure you’re paying at least industry standard – and ideally higher. Creative kingpin Netflix prides itself on using the ‘rockstar’ principle when hiring: recognising the value of one ‘rockstar’ and paying the hefty price tag to go with them, rather than hiring ten less-qualified employees to try to do their job instead.
And while you might not be in the position to routinely offer six-figure salaries, it’s worth bearing the principle in mind when scouting for talent.
How to set pay fairly
Once you know where you stand, there are a number of methods you can use to reevaluate the way you pay people in your business.
You don’t want any of these to feel like a token gesture, so think carefully about how your organisation works, and what your employees really value.
Regular review – one of the biggest mistakes you can make is to overlook your existing team and the salaries you pay them. With household budgets being squeezed, your talented staff might not hesitate to go elsewhere if it means a bigger paycheck. Try to get ahead of that by conducting pay reviews at least once a year – and maybe even twice, if you’re serious about staff retention. Remember, more often than not it costs more to replace people than to give them a pay rise.
Look at salary as a percentage of sales – this can be a helpful metric to show whether you’re spending too much or too little on salaries, compared to the overall performance of your business. It can also show you when it might be a good time to hire new staff or raise wages.
Progression opportunities – people want to progress in their career, and they want to see their salary increase in line with that. By mapping out paths for progression, you’ll give employees the opportunity to grow and encourage them to stick with you in the long term.
Bonuses – it’s worth giving some careful thought to whether bonuses are the right option for your business, whether your employees expect to receive one, and how much is the right amount to give.
Profit share schemes – should your employees share in the success of the business? Drawing a direct link between the business’s performance and the benefits employees get can be a real motivation boost, as well as a way to reward people for their contribution.
Is it all about the money? – salary is important, of course, but it’s not the be all and end all. People are increasingly looking for other benefits from their employer, with flexibility and work-life balance becoming more important than ever. Think about what really matters to your staff, and how your business might be able to provide it.
Get professional advice
Setting, reviewing and adapting pay in a way that’s fair to your staff is essential for any creative agency to attract and keep talented people. To do this properly, you need to take a practical approach based on accurate data.
Get in touch with us today and we can help you plan for and understand your next steps in building a more diverse and fair business.