Looking to hire, but scrambling to find the right talent? Join the crowd. Nearly two-thirds of owners report a shortage of skilled workers and 60% have boosted wages to attract new hires, according to a 2018 survey of small businesses.
The trick, of course, is to set a salary range that’s fair—even enticing—but also in line with what you’re willing and able to pay. In addition to using your knowledge of the local market, try these ways to find that sweet spot:
Statewide or trade organizations: When Kathy Thomas is considering how much salary to offer a prospective new hire for Ready Ritas, her Dallas beverage mix company, she consults the National Retail Federation. The Washington, D.C.-based trade association, like many other industry associations, offers members free information on salaries.
“We get information on average starting wage and average wage for a district manager, store manager, clerical worker, warehouse workers,” Thomas says. Thus prepared, she is better able to offer applicants a competitive wage.
O*NET OnLine: This free online data source sponsored by the U.S. Department of Labor is a goldmine for employers, according to Joey Price, owner of Jumpstart:HR, a Baltimore-based human resources consultancy for small businesses and startups. Users can search O*NET OnLine for salary information according to job titles, abilities, location and more. “It’s especially helpful for a business owner because it lists the skills that an ideal person will have in a given role,” Price says.
Other online sources: Workplace review site Glassdoor has salary information that’s searchable by job title and location. Salary.com sells small and medium-sized companies reports that allow employers to extensively analyze pay data. LinkedIn has a Salary Explorer feature that finds salaries for job titles in specific cities. Although this database is limited compared to some others, the professional community it connects users to can be a source of information from other business owners.
National and industry-wide average salaries may have limited relevance to small employers, Price notes, so it’s important that salary information sources separate data by geography. “The more senior and niche the role, the more you focus on industry-specific salary information,” Price says. “If the job is something general and less niche, you’re looking at salary information for your region.”
The trick is to set a salary range that’s fair—even enticing—but also in line with what you’re able to pay.
As you’re gathering information, keep in mind that asking for an applicant’s salary history is risky. Although most jurisdictions still permit the question, more and more states and cities are prohibiting the practice. “You may ask a person’s salary expectations or what they’re looking to make in their next role, but I wouldn’t ask what a person made in the past,” Price says.
If your salary investigations reveal that you can’t afford the going rate, you may still attract the talent you need with non-financial compensation. Flexible hours, telecommuting and opportunities to learn new skills, make significant contributions, and be a bigger part of a small organization all can attract talented workers even when pay doesn’t match other employers, Price says.
Going forward, salary information is likely to become even more widely available, as people increasingly share pay data on sites like Glassdoor. But the ultimate arbiter of whether pay is sufficient—satisfied employees—remains relatively easy to spot and likely won’t ever stop being important. “At the end of the day,” reminds Thomas, “you have to make sure employees are happy.”
Print this article