How Can Small Business Compete on Compensation
For many small business owners, owning and operating their own company is the realization of their lifelong dreams. Working hard and building your brand are rewards in and of themselves, but when the time comes to hire, potential employees will be looking for more than your entrepreneurial spirit. Though the economy has seen the workforce ebb and flow in recent years, employers might no longer have the upper hand when it comes to negotiating terms of hire. If you are in the midst of the hiring process and wondering how to attract the best candidates, offering great pay is one of the most obvious ways, but how can a small business compete on compensation against companies with budgets twice the size The following strategies can help you attract, hire and retain the best candidatesïwith or without a huge salary.
Budget for Growth
When it comes to daily operations, your budget and business expenditures will reflect where your efforts are going. It isn’t always easy to achieve your goals with the available resources of a small business, but hiring quality talent should be at the top of your priorities. If you want to see your small business compete on compensation, the easiest way to offer higher salaries is to reevaluate your budget and devote more to compensation packages for new hires.
When you are competing for top candidates against bigger, more established companies, they likely have the advantage of a bigger budget. Often you can cut back on other expenses to free up revenue and funnel it towards recruiting. Devoting as much of your budget to hiring as you are able is the most effective way to immediately inflate salaries, so while you are in the growth stage of your business, focus your budget on the pursuit and retention of qualified and talented employees.
Salaries and Profits Should be Directly Proportionate
Watching your small business compete on compensation against larger companies can be frustrating, One of the best parts of hiring, though, is the knowledge that attracting great talent will almost definitely boost your bottom line. With the right team, you can take your company to new heights, and sharing your plans for expansion with candidates can help them see the bigger picture. Offering performance-based compensation attracts job seekers who are motivated, so you can get an edge on competing companies by structuring pay to reward success. This lets your small business compete on compensation and promote growing profits all at the same time.
Compensation is More Than Just Salary
Top companies that value and retain their employees do so by offering a nurturing work environment and benefits that give employees a higher quality of life. Plenty of companies offer attractive salaries coupled with minimal benefits and lackluster work conditions. Job seekers today are experienced and know to avoid jobs like these, but it isn’t always easy for candidates to pick out which companies will provide the best combination of environment, salary and benefits. A bigger company may be able to offer new hires a bigger initial pay rate than your budget allows, but communicating an emphasis on a harmonious workplace to candidates can help your small business compete on compensation, and offering a stellar benefits package will be the proof of the pudding.
Flexibility, health care coverage, add-ons like vision and dental and perks like time off are some of the hottest commodities job seekers want, and as a small business owner, you can likely negotiate with providers to obtain package rates on some of these benefits. At the end of the day, candidates are not just looking for the biggest paycheck. If you want to see small business compete on compensation, you can outdo bigger companies by offering what they don’t: an environment designed to facilitate growth, evidenced by a great benefits package.
Offer Opportunities for Advancement
More established companies generally offer less upward mobility to candidates, so you can impress job seekers with the opportunities your company growth provides. As profits go up, you will need to hire more people, and the growth will likely create more positionsïincluding managementïthat new hires can reasonably aspire to. A job with potential advancement will always be attractive to go-getters, and as a small business, you have the ability to offer practically endless opportunities if profits stay on the rise.
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