There’s more to salaries than pure numbers! Salaries contribute to lots of other factors that affect your business such as your ability to attract great talent or retain your existing star performers. As an employer, it’s on you to keep up with salary trends and ensure that your employees are paid fairly given the market rates in your location. For small and medium-sized businesses, this can be a challenge, as your resources may be stretched a little thinner than at large organizations. If that’s the case, don’t forget about other perks and ways to reward employees that will supplement their salary.
1. develop a cohesive salary structure
If you’ve recently started your own company (or are in your first few years of doing business), you’ve probably had to figure out everything as you go. Most of the time you probably had to create and implement all your processes from scratch. From figuring out bookkeeping, to developing HR processes, to finding office space, whatever your business needs, you had to do it all. That includes figuring out how much you should pay each new employee you hire. Every new position you hire means figuring out where they fit on your pay scale. Our 2020 salary guide is a useful resource to develop a cohesive salary structure so every employee on your team is fairly compensated. For each role, you’ll find the salary ranges based on years of experience and location, ensuring accurate data across the board. Use the data to create your own salary structure depending on the positions you have in your company.
2. negotiate salaries for new employees
If you’re in the process of hiring new employees, there’s a good chance they’ll negotiate their entry salary. Don’t go into salary negotiations blind, or make assume you can pay a new hire the same as a previous person who held the role. Salaries shift all the time, so it’s important to verify your hiring budget is in line with the market rate if you want to be competitive. Ideally, have a salary range, so you can adjust your offer based on the skills and experience the candidate brings to the role. Our salary guide is a helpful tool to use in this situation because it provides salary information based on job title, years of experience and location, all of which affect the salary you’ll need to offer. For instance, if you’re hiring an administrative assistant with 3 years of experience in Toronto, the reference salary range for this position is $43,600 to $52,500. However, if they bring 10+ years of experience, the expected salary range is $50,100 to $55,200.
3. determine raises for existing employees
Salary isn’t just a consideration for new hires. An attractive salary can entice skilled workers to your company, however ensuring their salary continues to grow as their experience does is critical to keep workers around long term. If you’re experiencing high turnover a common culprit is lack of salary growth. Did you know the average Canadian receives a raise of 2.6% per year? However, by switching jobs workers can often make as much as 10-20% on top of their current rate. That incentivizes workers to jump ship and find a new role elsewhere if their salary starts to fall behind. So it’s critical to ensure that your salary rates are not just keeping up with inflation, but staying in-line with what employees will be able to find elsewhere. Each year you should be verifying all of your employees’ salaries and checking whether they’re due for a raise. High performing, ambitious employees know their worth, and if you can’t provide an attractive compensation package, they will look elsewhere!
4. benchmark salary ranges
If you have multiple people working in the same or similar roles at your organization, you should ensure that their salaries are consistent. For instance, if you have two project managers with roughly the same amount of experience, they should be making a relatively similar salary. It’s important to compare salaries in each department or area of your organization and ensure that salaries are fair and consistent. Women and people of colour tend to make less than their white male counterparts, so ensuring that your salary ranges are clearly benchmarked is essential for promoting a fair, diverse workplace that treats everyone equally. There have been some studies about how being transparent and open about salary ranges increases diversity, innovation and ultimately business results. Our salary guide can assist you with the task of benchmarking salaries.
5. include salaries in job descriptions
Did you know that a job description that has a clear salary range gets more high-quality applications on average than the exact same job description without salary information? Employers often balk at the idea of including a salary range in their job descriptions, thinking it will weaken their negotiating power, or attract people who are interested solely in the amount of money they can make in the role. Neither of these things is true. If you offer a salary range upfront, you can easily negotiate within that range depending on the experience and skills the candidates bring. Someone with less experience may receive an offer on the lower end of the range, while someone with extra value-added skills may get an offer at the top of the range. The truth is skilled workers know their value in the market, and are attracted to roles that will pay them fairly. Keeping salary data hidden can put off some great candidates who want to know upfront what they’ll make. More employers are getting on board with this practice, recognizing employees value transparency.