One of the toughest tasks a company has when recruiting and hiring a new employee is putting a price tag on the position.
Don’t allow the Candidate to set the range:
Mistakes I often see my clients make when filling an opening is that they react to what the candidate believes he should be paid. Instead of waiting for a candidate to place a monetary value on the job or even on himself, make sure to thoroughly evaluate the position in order to determine how important it is to the overall goals of the company.
Compare to Similar Positions with Other Companies:
It is also extremely important to research similar positions with other companies in order to see what your competitors are paying employees performing comparable jobs. Remember to take into account the geographical location of the job, benefits, as well as things like specialty skills and years of experience.
The first thing you want to do when benchmarking the salary of a new position is to see what your budget allows you to offer. After a budget has been set, you should then evaluate if your budget is reasonable by benchmarking the salary for its competitiveness. If the salary isn’t competitive, you will not attract top candidates. Alternatively, if you are able to pull a top candidate in with a low salary, you will be at risk of losing that quality employee at a later date to one of your competitors paying more money.
So how do you benchmark the position? I typically start with job posts for similar positions on the internet and ask what the compensation is. There are other resources on the internet such as payscale.com, indeed.com, and simplyhired.com which will provide a fantastic wealth of information to use for your benchmarking activity.
Other things to Consider:
After setting your budget, researching competing salaries and writing up a well detailed job description, you will want to set a compensation range. I suggest setting a “floor to ceiling” range which will cover candidates of all experience levels.
Additionally, do not underestimate the value of job perks and benefits, both monetary and non-monetary. Many people will bypass more money for perks like more vacation days, telecommuting and flexible hours; especially those with families and young children. Research shows that people are beginning to be more attracted to jobs which offer a work life balance or anything that reduces work related stress.
Finally, make sure to put everything in writing so there are no misunderstandings with the employee later. Confusion involving pay and benefits will lead to disgruntled employees and a possible decline in production, which was the complete opposite of what you were looking for when creating this job opening.
Written by Eric Lee
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