Compensation can be a tricky subject for most employers, especially when it comes to hiring. Most candidates want to know what they will be making and what benefits they get on a job description.
Choosing the wrong salary range could affect your applicant flow and/or your bottom line. If you set your salary too low, you risk turning away great candidates. If you set your salary too high, you risk cutting into your bottom line.
We put together some tips for job compensation so you can feel confident when including compensation on your next job description.
Research Compensation for Similar Jobs
When you wrote your job description, you probably researched similar job titles to find out what were some duties and responsibilities you should include on your job post. You compared what you initially wrote with essential functions and requirements of other jobs and used that to come up with your final job description.
When it comes to determining how you should compensate, you should do the same. It’s always good to start by figuring out what salary and benefits similar jobs are offering.
Here are some great sites that you can use to research compensation. When researching, remember to use multiple salary data sites to compare similar job titles and job descriptions to get an idea of the average compensation range.
Bureau of Labor Statistics
The Bureau of Labor Statistics is well-known for their unemployment stats but did you also know they serve as a great hub for salary insights? You can find salary data by area, occupation, and even industry. They also have a tool to help you decide what data might be most relevant to you.
Indeed is the world’s largest job search engine in the world. While the focus here is primarily on candidates, Indeed can be a treasure trove for job information for employers. Many jobs on Indeed include salary ranges which you use to help determine what your compensation range should be.
Glassdoor, which is now owned by the same company that owns Indeed, has a similar set up to its parent company. Glassdoor is also focused on being a job hub for candidates, but like Indeed, includes salary information that can be useful to employers.
Payscale is a company that strictly helps businesses and individuals find compensation information. While sites like Indeed and Glassdoor focus on providing salary information, Payscale takes it a step further by offering paid products to gain salary insights from your team and price a job.
Salary.com is similar to Payscale in the fact that it also offers salary tools that businesses can purchase. Salary.com’s CompAnalyst platform offers salary information for over 15,000 job titles in 16 countries. The product is relatively new, started in 2017, but has received high praise since its introduction.
Internally Benchmark Job Compensation for Internal Equity
After you conduct some external research, take a look at what’s happening internally. Before you finalize your compensation, you should take a look at how others in your company are compensated for specific job duties.
In a perfect world, your compensation would be based on the market rate. This idea, however, is not always realistic in practice.
Maybe you are paying someone below average. Maybe you are paying someone above average. No matter your situation, it’s important to try to ensure internal equity.
This means making sure you’re paying equally for equal work.
Those job titles you researched and found salaries for might be more than that person’s boss is going to make. As a hiring manager and an employer, it’s your job to see whether that salary is justified based on the work.
Just because a job title might carry a certain salary range doesn’t mean it’s the right salary range for you. There are many factors that may cause you to pay below or above market including your company size, the actual job responsibilities, and the competitiveness of your industry. If your job is being priced differently than the market, make sure to understand these differences to justify the salary difference.
The goal when internally benchmarking is to create pay fairness and harmony between internal and external equity. Always evaluate external data and internal equity to ensure pay fairness.
Include Benefits When Mentioning Compensation
So, you’ve done your job compensation research. It looks great! You know exactly what the salary range is for your job opening. But, you have a problem. You can’t afford to pay someone at this salary. You need to make this hire though.
How do you approach including compensation when you might be behind other employers?
If your company offers company-paid health insurance or stock options include those when you write your job description. Have a great retirement plan for your employees? Include it! Have a great career advancement program? Include that too!
Most candidates like a combination of financial and non-financial benefits.
Just because you think your salary might not be able to compete with other employers for similar positions, doesn’t mean you shouldn’t include salary. For positions where employees can receive additional financial benefits for strong performance, that additional compensation can be added into your average compensation range. This is a good way to offset a lower base salary.
Including salary will help your job post show up in the correct searches and attract job seekers who are a genuine match for your opening. It’s okay to put in a range for the hourly rate or salary.
If your job does stack up salary-wise, make sure you avoid using spammy phrases like “unlimited earning potential” or “Make CA$H” as this could get your post flagged and taken down by job boards.
Final Thoughts on Job Compensation
- Choosing the wrong salary range could affect your applicant flow and/or your bottom line
- Research compensation for similar job titles and job descriptions externally
- Internally benchmark job compensation and understand why your salary range may differ than the average for a similar position
- Strive for external and internal equity
- Periodically evaluate external data and internal equity to ensure pay fairness
- Highlight benefits when salary may be lacking