How much to pay an employee for a role is a difficult decision. It’s usually based on various factors, including the average national salary for that position, the specific job requirements, the candidate’s experience, and the financial situation of your company.
As a business owner, you are no doubt always looking to cut costs where possible. But an employee’s salary is not something you can afford to be stingy with. It is their livelihood and one of the most important factors they consider when applying to a new job. It sustains their personal circumstances and ultimately dictates their quality of life outside of work.
You want your employees to be as productive and hard-working as possible, but you also don’t want them to be unhappy or start looking for better-paid work elsewhere. Below are five reasons why paying an above-average salary is the best way to attract and retain the best talent and ensure your employees are as effective as possible.
Staff who earn more are likely to stick around for the long haul. An employee with a below-average pay packet might seem content, but there’s a good chance they are spending their downtime searching the job boards for a better role. Many workers take poorly paid jobs for some experience before moving onto bigger and better things. Don’t let your company be a stepping stone. Pay well from the outset, and your employees will never want to leave. As a result, you will waste less time searching for replacements and interviewing new hires, and you can spend more resources on activities that drive your business forward.
Attracting the Best Talent
Highly-skilled workers are a rare commodity, and the business landscape is becoming increasingly competitive. An above-average level of compensation is one of the best ways to make your company an attractive career prospect. For all the gimmicky employee perks we see nowadays, nothing is more appealing to a candidate than a generous paycheck.
When you pay your employees an above-average salary, it tells them that you expect an above-average level work. On the other hand, if they feel they are not getting paid enough, they will likely be less motivated to do a good job. With more money in the bank, they will also benefit from more fulfilling personal lives and less financial stress, so they will be happier and therefore work harder. Productivity will inevitably increase, and your business will benefit.
Fewer Staff Requirements
With a more productive team, it might take two people to accomplish the same amount of work as three poorly-paid workers. A harder working team may allow you to streamline your business and hire fewer people. Paying your staff more may actually save you money in salary costs. Managing payroll for multiple employees can be challenging, so consider hiring a company such as Employer Advantage to help you out.
If all these benefits haven’t convinced you, what about the fact that it is the right thing to do? When people work hard and produce excellent results, they should be fairly compensated. They are helping your business to grow and making you money, so as long as they are doing their job well, why not give them an extra share of the profits?