How Much Should I Pay My Employees? A Guide to Setting Salaries
September 25 2019 - Did you know that the average salary in the US is around $52,748?
Of course, that's just an average, and if you're an employer, you don't have to pay employees that exact figure.
That being said - how do you figure out how much you need to pay employees? Should you provide the same salary as competitors? How should you handle the question of a pay rise?
Below you'll learn more about how you can tackle the issue of employee pay. Read on, and you'll soon be able to answer the question "how much should I pay my employees"?
Look at Market Rates
If you're looking to hire a new employee, other companies probably have job openings similar to the one you're advertising.
You can take a look at what these other companies are willing to pay employees, and then base your salary rates around those figures.
Now, for this to work, you need to make sure you have a lot of clarity in terms of the job you want to fill. If you don't, you may end up using figures that aren't representative of the job you have to offer.
Thus, take a moment to describe the job opening in as much detail as you can. Then do everything you can to find job openings that closely fit this description.
Dealing with Pay Raises
Once employees join your company, they'll likely be interested in how they can achieve a raise.
Perhaps the best way to go about this is by creating a system where salary will increases are based on certain factors. This might include performance or it could just include time at the company.
By creating a system such as the one above, it becomes easier to predict how salary costs will change. This then allows you to do a better job of budgeting salary expenses within your business.
You may want to tell employees and potential employees that they can earn more by working overtime.
In doing so, you may be able to offer a lower base salary, thereby making it easier for you to cover the costs of hiring someone.
If you're going to provide overtime pay, make it easy for employees to see how much they're earning as a result of working overtime.
Perhaps the best way to do this is by including a note on their payslip. This is easy to do with payroll software such as the one provided by thepaystubs.com.
How Much Should I Pay My Employees?
Now that you've finished this post, it shouldn't be too difficult to answer the question - "how much should I pay my employees"?
If you make your business a good place to work, employees might be willing to accept a salary that is below market rates. You might do this by giving people the chance to work remotely or by paying for educational courses.
It'll probably take a while before you figure out the right salary, for a given position. But if you go through steps in this post, you should eventually develop a figure that works for you, and your employees.
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