When it comes to running a business, it is hard to remember that you are not a one-man team. Without your employees, your business can certainly take a turn for the worse. Just think about all the troublesome paperwork you will have to deal with if you do not have an accounting or legal team by your side. Daunting, right? This is why you need to make sure that your team is fairly remunerated for their effort. However, how do your employees really want their compensation? Well, this is the million-dollar question. Read on to discover the best compensation tactics that most employees love.
Let’s start with the obvious: salaries. Due to today’s ever-changing market, it can be hard to set your employees’ salaries. Surely, you do not want to end up losing precious resources by overpaying them, but offering them less than what they deserve can also make your company lose all its staff! What a predicament, huh? Luckily, there is an easy way to determine your employees’ base salaries. First off, you need to consider the market rate because it is what candidates expect to be offered. Of course, relying on market rates alone is not enough in most cases. You still have to account for the time and effort your employees put into their tasks. To gain a competitive edge, offer rates that are slightly higher than the market.
Having a fair salary structure is not the only thing you should worry about as a business owner. To keep your employees satisfied, you need to offer a few extra incentives. Not only will such incentives keep them on board, but they can also motivate them to do a better job. What forms do these incentives take, though? For starters, bonuses are always a good option, as they are often used to reward personal achievements. Just make sure that you include these bonuses in the employees’ gross earnings when generating pay stubs, as documentation is important both for you and your staff. You can always invest in dedicated software if you have not had the chance to establish an accounting team yet.
Aside from bonuses, profit sharing, commissions, and stock options are all favorable employee compensation solutions as well. So, pick the ones that suit your staff’s needs and the company’s resources.
Cost of Living
Living costs are not an aspect that many employers keep in mind when setting their businesses’ compensation structures. However, this is a fatal mistake that can cause a big part of their staff to leave. Considering that accommodation expenses, especially in big cities like New York, can be too high, you need to put this into consideration when determining your employees’ salaries. Transportation allowance is also a type of compensation that most workers like to have. If some of your workers depend on public transportation to commute to and from the office, you should reimburse them by covering these costs either fully or partially.
This is another obvious one, but you’d be surprised how many business owners do not reimburse their staff for working overtime. While you might argue that it is your employees’ job to stay at the office until all their tasks are done, they agreed to certain work hours when they accepted your offer. So, you must compensate employees for any additional effort they exert. Otherwise, you will be effectively pushing your staff to quit! A quick tip, though: Some people prefer getting an extra PTO (paid time off) instead of receiving financial reimbursement for working overtime. For this reason, you need to ask each employee about what they need before making any decision.
Of course, compensation structures do not always consist of financial benefits only. Non-monetary options are also favored by both workers and business owners. These include flexible work hours, training programs, and extra vacations. Regardless of which benefits you end up going for, you must be upfront with your employees about what you can offer down the line, as empty promises will only get you so far! Don’t forget about the importance of recognizing your staff’s hard work as well. A kind word here and there will go a long way towards making your personnel feel appreciated.
Striking a balance between business demands and your employees’ needs is not always easy, but it is far from impossible. With some shrewdness and careful planning, you will be able to keep your staff satisfied without compromising your company’s objectives or depleting its resources. Bonuses, PTO, profit shares, and living and transportation allowances can all be great additions to your business compensation structure. At the end of the day, you must consult your financial team to guarantee that such reimbursement options are feasible.
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