Choosing the Right Salary to Attract the Right Talent
There’s no two ways about it, hiring is expensive. It’s also time-consuming and staff-intense. When you’re looking to acquire top-tier talent, it’s easier to counter opposition by saying, “You get what you pay for.” In some ways, this is true, especially when you seek to attract talent that stays, but how are you defining talent for your organization? Ultimately, top-tier employees also must exhibit a level of performance that justifies the additional cost, per a recent article in Entrepreneur magazine.
Talent vs. Employer Costs for Employee Compensation
To make a smart choice, one must align the decision with compensation cost, as reported by the U.S. Bureau of Labor Statistics. The Employer Costs for Employee Compensation (ECEC) from the National Compensation Survey determines costs for salary, wage and benefit costs for non-farm private, state and local government workers.
In September 2016, the average cost per hour worked was $34.15. Almost two-thirds of the costs were wage and salary (68.6%) with benefits rounding out the amount at $10.73 (31.4%). Private industry workers averaged $32.27 per hour, and state and local government workers averaged $45.93 with wage and salaries averaging $29.06 (63.3%) and benefits of $16.87 per hour, accounting for 36.7%.
Finding a Flexible Balance Determining the best salary range to attract the right talent for your hiring needs remains a balancing act. The best strategies will maximize the bottom line by getting specific about the skills needed to do the job well, reflective of the current hiring pool. For instance, understanding demand related to the supply of current talent is critical in determining the sweet spot for attracting candidates who will do a good job and will remain in the position long enough to positively impact the bottom line. Gwen Moran, a contributor to Entrepreneur magazine suggested looking at several areas when determining needs setting salary ranges.
Skills – Will a new hire bring skills to the job that the company can leverage for growth over time?
Balancing Responsibility – What level of importance will this role play in the organization? Higher importance and greater levels of responsibility generally require a larger financial investment.
Response to Need – At certain times there will be an abundance of better-qualified candidates. Research to know who and what roles are in demand so you don’t accidentally place your business out of the running, either too high or too low.
Understanding the Market – Certain job roles and skills earn a higher salary states, regions or industries. Knowing where your business stands can help keep you competitive, particularly when quality candidates are harder to find.