How to Set Salaries and Benefits Without Breaking the Bank

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As a business owner, hiring is an endless battle. Figuring out when to hire, who to hire and how much to pay them is all important, because at the end of the day, employers want the best talent. And to acquire – and keep – that talent, business owners need to incentivize them enough to stay. This is easier said than done, especially as an emerging entrepreneur – you want to pay enough to retain your employees, but you aren’t in the position (yet) to pay them as such.

So, where do you start setting salaries? The first step is researching – whether it’s online or reaching out to the Columbus Chamber of Commerce – what the baseline salary should be for the position and geography. By knowing what’s considered high, low and average, you can begin the hiring process knowing what your job candidates can expect. However, paying a highly competitive wage isn’t always an option for all business owners, especially if your business is in the early growth stages. Luckily, there are other options to create incentives around future growth of the business and how your employees can play into that growth.

Sell Your Mission

What are your goals? What’s the end game? Talk about it with your prospective employees. Employees want to be part of something special – and if your employees are invested in your mission, they will invest in you. While you might offer a lower, fixed wage initially, commit to your employees that as the business improves, you will improve their wages to get them to the point of that 100-percentile compensation level. While it is a gutsy and underrated approach, you’re in a position to sell the ride and the future of your business – there’s an audience and an opportunity for it, you just need to communicate it and stay true to it.

Create Aligned, Incentive-Based Compensation Structures

Create incentives around future business growth and wins. Celebrate accomplishments, like percentage growth of sales and workflow/output with your team. This can feel like an overwhelming task as an emerging entrepreneur when so many variables in your business are in flux, but as your cash flow improves from a business win, give your employees a piece of the pie as promised. Of course, establishing the wrong incentives can induce the wrong behavior, so you must be strategic when it comes to creating these benefits. For example, utilizing incentives can backfire if employees falsify records to portray they have reached or surpassed certain goals.

Keep in mind that incentives don’t have to be a costly annual bonus or a quarterly salary increase. Your employees want to get paid well, but they also want to be part of a great team and culture, so compensation doesn’t have to be elaborate or expensive. [Hint: Find a way to celebrate wins in an inexpensive way!]

Every company’s situation is different, but putting similar practices, like these, in place lets your team know that they’re being recognized as valuable assets to your company. They’ll ultimately work that much harder because your businesses’ success is in-turn their success.

Randy Gerber is the founder and principal of Gerber LLC, a professional services firm that works with first-generation entrepreneurs. Gerber works with clients to plan for business growth and understand what they want out of life, then puts holistic wealth management plans in place designed to help make it happen. The company recently launched a new flowchart to help entrepreneurs choose their path for business solutions through an interactive experience.

*Opinions expressed in this article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Any opinions are those of Randy Gerber and not necessarily those of Raymond James.