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How Do I Set Wage and Benefit Levels?

  • Attract and retain top talents through smart compensation decisions
  • For employers managing a business employees wanting to know how their work is weighted
  • Determining what pay level and benefits will attract qualified candidates

In order to attract top talent to your company, you’re going to have to pay a fair salary and offer an attractive benefits package. Of course, you also don’t want to overpay your workers or otherwise be so generous that you jeopardize your company’s financial health.

Wages

Whenever you are hiring for a position, you’ll need to clearly outline what the job duties are and what skills and experience a candidate must have. This can also help you assess the value the employee will contribute to the company in terms of revenue-producing capacity or providing services to help the company succeed. The more highly you value their work, the higher the compensation should be.

Look into the wages for similar roles in the industry, at your competitors, and in the region as a whole (the website Salary.com is useful for this purpose). This will help you determine the typical salary for the position and the bottom end of the scale. You should also determine how much you’re willing to pay someone to do the work a position entails.

In general, you’ll be expected to pay more if the job requires a higher education level, lengthy experience, or specialized skills. Your salary offer can be on the lower end of the pay scale if the candidate has fewer years of experience and on the higher end if they’re more highly skilled. You can also factor the value of your benefits in as well; candidates may be willing to accept an offer on the lower end of the scale if you have a robust benefits package.

Consider how you’ll pay the employee. Some roles often involve a fixed salary, while an hourly rate is more appropriate for others. Unique payment options exist for some professions, such as tipped wait staff or sales commissions. You might also offer financial perks such as annual performance-based bonuses.

Benefits

Employers are expected to pay certain mandatory benefits, such as Social Security contributions and unemployment insurance. Some states also have their own requirements, such as payroll withholdings for paid leave programs.
The most common benefits offered by an employer include health and dental insurance, vacation and sick time, paid holidays, and tuition assistance. Employers also commonly offer a 401(k) or other retirement program, and your company will be more appealing to job candidates if you offer to match employee contributions.
Consider other perks as well that might make the workplace more attractive to employees. Many employers are moving toward a hybrid work schedule after the COVID-19 pandemic, permitting employees to work remotely at least a couple of days each week. You can also offer workplace benefits such as a wellness program or on-site gym.

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