Guide On Establishing Your Employees’ Salary Range
All employers need to come up with a salary range for both current and prospective employees. A salary range contains both a minimum and maximum pay for a specific task. Employers look at many factors when determining the most appropriate salary range. You can determine the most appropriate salary range by examining the information you get after you track employee hours, market expectations, industry expectations, competitor information, and labor laws. When you have a well-defined salary structure, you are in a better position to attract and retain competent employees. You should not underpay or overpay because when you underpay, employees lose morale, and overpaying is not sustainable. This article seeks to give you tips for choosing the most appropriate salary range.
Firstly, you need to identify your job roles. Every role’s requirements in terms of skills and experience need to be identified. You also need to identify the amount of effort required to fulfill a certain task, and you can do this if you track employee hours. You can only set an appropriate salary range if you consider all these things.
To set the right salary range, you also have to set out a philosophy for your business. You can either pay a set salary each month or set up a performance-based salary. For optimality, every employer needs to track employee hours before choosing a philosophy. If a performance-based philosophy is adopted, people who work extra hard will be rewarded. An employer may track employee hours to appropriately identify how much to pay those employees who work extra shifts.
It is also important that you factor in the cost of living into your employees’ salary range. If your company is based in a city, then you have to factor in the high cost of living in such an area. Your salary range, therefore, needs to reflect the high cost of living in such an area if you want to attract the right candidates and keep your employees motivated.
You should also research about other employee benefits. Gen Z and millennials, who make up the largest part of the workforce today value benefits such as flexible working hours more than they value salaries, and you need to take this into account. There is no need to track employee hours if your industry works with millennials and Gen Z. If you offer these benefits, you can set a low salary range and remain attractive to potential employees.
Ensure that you leave enough room to be flexible since there are employees who will negotiate for higher pay. Flexibility is vital in setting employees’ salary range, so you can be in a position to meet them halfway, without interfering with your budget significantly.