You’re Too Cheap to Attract Great Talent!
The biggest obstacle standing between you and your “perfect hire” is not the size of the available talent or a lack of qualified candidates who meet your expectations.
Your biggest obstacle is YOU and your outdated compensation package.
Any hiring manager or recruiter worth her weight can unearth the most passive job seekers. However, even the best will have trouble getting top talent to the interview table if you are not offering a competitive compensation package.
Building the right package can be tricky business. Underpaying employees breeds job dissatisfaction and high turnover, ultimately costing your organization more time and money. Conversely, overpaying employees brings with it a whole host of other problems: discouraging the right kind of turnover, entitled employees, and being bound to a high salary.
Here’s how to create a competitive salary to attract A-Players without breaking the budget…
Know Supply & Demand in the Market
From tech to finance, manufacturing to retail, record-low unemployment rates have heightened the war for talent. It is a job seeker’s market. They are unwilling to (nor do they have to) stick around in jobs they don’t enjoy. More importantly, they are not making lateral transitions. A-listers are demanding more. However, companies are looking for not just anyone to fill open roles. They want the cream of the crop to rise to the top… of the candidate pool. As a result, employers who want to draw Top Talent to the negotiating table must have their finger on the competitive compensation pulse.
Know Supply & Demand in the Industry
Some industries bear the burden of offering higher salaries because their products or services are more complex. Is your industry one of these? If so, the talent you are looking for expects to be paid at a premium. Budget accordingly and be willing to offer a competitive package. Do not low ball potential hires because your industry is less specialized. You want to attract the highest quality candidates your organization can afford. In the end, knowing what industry salaries is just as important as knowing the latest technologies and high demand skills.
Ask your friends what they’re doing
Identifying prevailing market rates across industry and role is an important step in designing a competitive compensation plan. In today’s market the candidate you want is entertaining multiple offers- That’s a fact. Don’t lose them to your friends or your enemies. Read the latest salary surveys and government reports to make sure your compensation package is up to date and competitive.
Understand Location, Location, Location
You don’t have to spend hours watching House Hunters to know that the cost of living is significantly cheaper in Waco, Texas than San Diego, California. Cost of living is reflected in the price per square foot of a home in the area and the average salary. For example, someone in New York will earn a salary 35% higher across the board regardless of level. Keeping abreast to several factors will help determine a reasonable salary for your location: Where do most of your employees live? Do most rent or own? What is the average rent? What is the median home price? How do your employees commute to work? The answers to these questions will be a key factor in solving the salary equation.
Leave room for growth
Employees expect opportunities for growth in both role and compensation. Offering incentives such as stock options and bonuses may help you get those A Players in the door, but you will not be able to retain your valued staff if they are already at the top of their salary range in year one. According to CareerBuilder, 70% of employees reported that increasing salaries is the best way to boost employee retention. If the expectation of responsibility and production increases, the expectation of compensation does as well.
To quote one of TurningPoint’s own recruiters, “If you pay peanuts, you get monkeys.” Attracting and retaining top talent is not rocket science. Offer employees an exciting, challenging job with clear expectations and measurable. Ensure there is potential for growth and a solid team to work with. And, most importantly, offer a competitive compensation that reflects the skills your hire is bringing to the table and the value they bring to the company.