It’s one of the toughest elements of running a business: figuring out how to compensate employees well enough that they stay, without putting your finances at risk. You need great people, but you also have to be able to afford them, and keep your costs as low as possible, so you can stay competitive.
You’re certainly not alone, but the good news is that there are some creative ways you can develop a compensation plan that works for everyone.
Be Prepared to Hire “Green” Employees
A great trick for employers with limited wage budgets is to look for employees who don’t have a lot of experience, but have shown an aptitude for the field. Recent graduates know the theory, are eager to learn, and most importantly, may be willing to work for lower starting salaries, in exchange for that experience.
Hire Recent Immigrants
It’s not only recent graduates that have the knowledge but lack experience, it’s also recent immigrants. Many immigrants have extensive qualifications and experience in their home countries, but their lack of local experience puts them at a hiring disadvantage. If you are willing to go through the process of global screening in addition to your usual screening, you could literally have a rocket scientist or a brain surgeon working in your company, for a great rate!
Make Part of The Package Performance Based
Jobs that only offer commission tend to attract desperate people who don’t stick around very long. That’s usually not good for your business, so it’s best avoided.
However, while commission only packages are a bad idea, making a portion of the overall compensation package performance based is a great one. Employees will work harder if they know they’ll be rewarded for their efforts, and if you’re only paying that extra portion for real results, it makes good business sense too.
Ask Your Employees
The best way to figure out a compensation strategy that will keep your valued employees happy is to ask them. Very often, employees already have an idea of non-monetary perks and rewards that they’d be willing to take in lieu of extra money. They may ask for additional paid time off, or job specific training that will benefit you too.
Don’t Forget Equity
While you’re working on a compensation plan that will help you to attract and retain top talent, don’t forget equity. Top employees may be happy to accept shares in your company, or a profit sharing arrangement, instead of financial reward. Be careful with this option though. You don’t want the wrong people to own a stake in the company you struggled to build!
Outsource Non-Essential Jobs
A great way to free up more cash for your star employees’ compensation packages is to outsource non-essential functions to freelancers or companies. If you are going to use companies, however, make sure you have a small business background check policy in place!
Know Your Limit
It’s always tough to balance the need to attract and retain qualified staff with the financial constraints of business, and sometimes, no matter how creative you are, and how much you want to keep an employee happy, you simply can’t manage to meet their needs. It’s important to know what your limit is, and to be prepared to walk away if you can’t negotiate a deal. It hurts to lose a great employee, but there are others out there.