“I don’t pay good wages because I have a lot of money;
I have a lot of money because I pay good wages” – Robert Bosch
Small business always struggle to recruit hire and retain talented workers. Those employees are always looking for greener pastures and they’ll go wherever the compensation packet is better; they either get paid more, get more perks or they believe whoever is the new supervisor will be better than the one they have. How is your company’s compensation package? Is it competitive? How does it compare to other small business in the area? Entrepreneur, have you thought about the compensation package in your company? Let’s talk about compensation:
1. Are your best employees leaving? This may mean your company either is not paying the right salary or your work environment is not good enough. Do you have an idea what is the value of your employees in the local job market? Have you done your research? There is many websites (free or paid) than can give you an idea as to how good, or bad, your compensation package is. For starters, you may want to check the Department of Labor (DOL), Bureau of Labor Statistics (BLS), Occupational Outlook Handbook, (http://www.bls.gov/ooh/). Despite of the information given is a couple of years old, it is a good start!
2. Does your company has a compensation structure? Do your employees have an incentive to stay? Many employees are motivated to stay in a company for different reasons, economic or not, and they will stay in your business if they have a goal. This goal could be to promote through the rank and file to earn more money. However, employees need to have an idea if your company offers this opportunity. This could be accomplished by having salary ranges for specific job classifications. Thus, your employees will know they have room to grow and stay with your company for years to come. What other incentives your company provides? Bonuses? Rewards? You may want to perk’em up!
3. Does your business has job descriptions? This will provide the employee with an idea of a career path and to you a good way to plan your workforce for the future. This combined with a good employee experience may incentivize them to stay. More money is not always the big motivator; some of your best talent may stay because of the great work environment, loyalty and many others reasons. What are you doing to create this work environment?
Managing a small business is not easy, you are always concerned about finances, day to day operations, employees among other things and planning always suffers. Employee compensation is important if you want good talent. There is many ways to create incentives for your workforce without a big investment. Have you talk to your employees lately? What is their motivation to stay in your company? Find out, you may be surprised!