What do rotten eggs and low pay rates have in common?
They both stink – to high-quality candidates, anyway!
As an employer, you need to keep your human capital costs as low as possible. But in today’s talent market, a pay rate that’s too low will yield an applicant pool that smells like, well, you know…
You can’t afford to pay a temporary or direct employee more than their job is worth. You also can’t afford to waste time and money posting jobs that only yield bad candidates. How can you be certain you’re paying enough to attract and retain great people?
Benchmark your pay rates.
A small increase in pay rate can produce a big increase in candidate quality. Offering market rate (or a little higher) shows prospective candidates that you value great people and hard work. To determine if (and by how much) you should bump up the salary or hourly rate for an open job, use these tips:
- Use online tools.
Use relevant, recent salary calculators and survey data to help you determine acceptable pay ranges.
- Conduct your own competitive research.
Do some investigating on your own to find out what other employers are paying for similar positions.
- Leverage your professional networks.
Ask the coalitions, associations and other professional organizations you belong to if they’d be willing to give their salary data to a third party. That third party can compile the salary information, remove company names and share results with the entire group.
- Account for compensating factors:
– Cost of living.
If you recruit in multiple geographic markets, or if candidates may have to relocate for the job, do your homework. Before settling on a pay rate, factor in cost-of-living differences by using an online salary calculator.
– Candidate supply.
What’s the current unemployment rate for the type of position and geographic area? Consider how difficult it is to find a qualified individual to perform the job, as well as how long previous searches have taken.
– Position vacancy costs.
How much is it costing your business (e.g., stress on co-workers who have to “pick up the slack”; lost business; diminished service/quality) for the job to remain vacant? Bumping the pay rate a bit may shorten your recruiting cycle.
Over the short-term, increasing pay rates costs you a little more. In the long run, however, the strategy will help you to attract and retain better talent – while strengthening your culture and employment brand.
Do your pay rates stink?
Finding current, specific pay information can be expensive and time consuming. PrideStaff makes it easier! If you need to find the right salary for a specialized position or emerging job title, get your free salary analysis through our compensation portal. Simply contact your local PrideStaff office and they will prepare a supply/demand analysis for your open jobs.