Setting salaries for your staff is always a tricky thing to do. It’s especially hard if you’ve never done it before, because you probably don’t even know where to start. On the one hand, you want to pay enough to get the best possible talent. On the other hand, you don’t want to overpay. What’s an entrepreneur to do?
The main advice is that you never want to pay more than the job is worth to you. That’s just good business. Because at the end of the day, a salary is like any business expense–it’s an investment, and you should get a return. So you begin by deciding the top amount you’d be willing to pay.
The best way to determine that maximum is to ask yourself this: How much more valuable will this person make my company? Your answer is the most you’d be willing to pay that person when it comes to their salary. For a salesperson or business development employee, that question is easy to answer. These types of employees bring in revenue, so you can just ask yourself if the sales they’re generating covers their salary.
But how do you decide what you’ll pay for administrative and support staff? Their value isn’t so much in the money they make but in the money they save. So ask yourself what it would cost not to have them on board, and use the answer to justify their salary.
Other business owners are a good source of pay scales, because they can share their market rate experiences. Contacting members of your local chamber of commerce, or join a business networking group where you can chat with other business owners and swap salary data. For administrative jobs, contact your local temporary staffing agency and price out a temp then figure out the salary for a permanent position from there. For high-level jobs, headhunters and recruiters are great sources of information. They’ll often provide some guidance for free in the hopes that you’ll hire them when you need a formal search.
For more advice and tips on how to set the right salary for your new employee, follow the link below to the source: