Month: November 2022

Setting the right salary level for your employees is essential to finding the right people to help you run your business. However, it can be difficult to determine the most appropriate level based on your business and what it can afford while also being attractive to prospective employees.

When setting pay levels, particularly for advertising new positions and interviewing candidates, there are many factors to consider to ensure that you are attracting skilled personnel with the desired amount of knowledge and experience to perform well within your business.

Skill Level and Experience

Some of the first things to consider when determining a salary level are the skill set and amount of experience necessary for the performance of the role. If on-the-job training is provided, likely, a specific skill set is not required, and the rate of pay can be lower to offset the cost of the necessary training. Conversely, if a certain amount of industry experience is essential for performing duties within the role, you may need to offer a higher remuneration level.

Education and qualifications can also influence the rate of pay that you should offer; for example, if a specific university degree in Business or Accounting is required for the position, you will have to offer a higher salary level to attract people who have put in the time and money required to attain these qualifications.

What is Your Competition Offering?

You should have a good idea of what salary ranges other organisations within your sector are offering for similar roles. The best way to establish the going rate is to monitor job advertisements, both online and in newspapers and trade journals. There are also several online services designed to help employees determine what their skills and experience are worth within the workplace. Using these services, often found on recruitment websites, you can input the necessary characteristics for the position and calculate what an appropriate salary might be.

What Can Your Business Afford?

Other factors specific to your business may also help in determining the right salary level for your employees. Consider the size of your business and the amount you can afford to offer to attract and retain the right person. Also, think about the region that the position is in – if it is in a large city with a high cost of living, it might be necessary to offer a higher pay rate than in smaller communities.

Other Benefits

If your business is restricted in the amount you can offer as a salary, think about what you have to offer other than money.

Often the right candidate will be attracted to an organisation that helps them to maintain their work-life balance by offering flexible working hours or extra holiday leave.

Showing potential employees that your business considers their personal needs as well as what they can offer you, possibly by providing them with a company car, access to private study cover or assistance with childcare considerations, can often be more valuable than a dollar amount.

Do You Need a Formal Structure?

To make decisions regarding salary levels easier for you in the future, it can be a good idea to implement a formal structure that will apply to all employees and positions. This would be particularly useful in larger businesses or those with a lot of movement within the company or high staff turnover. Such a structure would need to consider all of the above factors and be applied universally to all employees and candidates in the future.

Alternately, for smaller businesses, or ones where roles are more fluid, it can be more beneficial to offer salaries on a case-by-case basis. The lack of a formal structure would allow you to tailor remuneration packages to suit the needs of individual employees, possibly attracting specific people to a role or helping to retain valued employees within the company.

However you choose to set and review your salary levels, you must remain consistent. Salary levels should be set to reflect the skills and experience of the employee that is necessary to the performance of their role while being mindful of the strictures of your business while being careful not to discriminate against specific employee groups.

If you require assistance with reviewing your business’s performance, employee salaries or business cash flow, accountants like us are equipped to assist you. Find out how by starting a conversation with us today.

One of the greatest complaints small employers have is how difficult it is to find good employees. But there’s one place they often fail to search for new job applicants – the families and friends of their best employees.

After all, current employees who have great work attitudes probably have brothers and sisters with great work attitudes too. Before rushing headlong into hiring family or friends, consider the ups and downs.

Advantages

Family members and close friends often come into a business with a strong commitment to the company, more so than the average employee.

Because relatives may think of the company as an extension of the family, they may be more likely to be flexible and work into the evening and over weekends when needed, anticipating that they will personally benefit from the long-term success of the company.

You know family and friends well and are familiar with their capabilities and shortcomings. This may enable you to place them in just the right position. Also, your familiarity may allow you to train them more quickly than other new employees.

Disadvantages

A relative may take advantage of family status, knowing that it’s hard to fire them when you’re sitting down at the dinner table with them that night.

Other employees may see the hiring as nepotism, especially if the family member is given preferential treatment or given a position without having the appropriate experience or training.

Family problems can be brought into the workplace. It’s one thing to have a family disagreement at night and be able to leave it when going to work in the morning. But it is entirely different when you’re facing the same person at work; the strain may affect the entire business.

Managing The Mix

Hiring friends and relatives is tricky. If not handled well, it can sour the work environment. But there can also be great benefits, as long as you proceed carefully.

Your Business Is Not A Charity.

Do not hire someone’s relative just because they ‘need’ a job. If someone has trouble holding a job, you don’t want them either. Write a detailed job description. Make it clear that if the relative or friend doesn’t perform as expected, he or she will be let go. Hire on a probationary basis, establishing a two-week or month-long period to see how things work out.

The Right ‘Stuff’ 

Ask specific, detailed questions about the relative’s qualifications before you agree to interview them. People rarely see their relatives clearly. They’re likely to make comments such as “He’s a wonderful guy” or “She’s so smart.” That doesn’t tell you if they’ve had relevant work experience or training. While you want to hire people with the right attitude, leave yourself an out: “I’m not sure Chris has the right computer skills we need.”

Don’t Have Too Many Chiefs

It is advisable not to have relatives reporting to one another or working too closely together. It’s one thing to have siblings work for the same company in different areas, but if they work together on the same project, you’re likely to see old family patterns emerge. If something goes wrong, don’t be surprised if you hear: “He started it.” “No, she started it.”

The Trouble With Spouses 

Spouses or domestic partners working together can present many difficulties. There can be:

• logistical issues: vacations or family emergencies may leave you doubly shorthanded.
• And behavioural issues: a terrific, eager worker may change dramatically with a spouse around.

The dynamics of a couple’s relationship are stronger (and usually less comprehensible) than a boss/employee relationship. Moreover, in a small, new, or very risky company, having both breadwinners work for the same company puts a lot of stress on a family and their budget. That’s a lot of extra stress on you.

Be Cruel To Be Kind

Be the toughest on your relatives. It is essential to set ground rules so that relatives are clear they are not entitled to a ‘free ride.’ It is also important for other staff members to see this strategy in place. Before hiring a relative, make it clear to them that they will have to prove themselves and be held to the highest standards. Never supervise a relative directly.

Don’t Play Favourites

Make sure all the rules apply to all employees. Everyone has to be qualified, and they have to do their jobs well. Otherwise, they will not be hired, or they’ll get fired. Even if they’re your mother.