3 Tips for Determining Compensation

Looking to add a new role or fill a vacancy on your team? You may find that identifying candidates is no longer the most difficult part of the process.

In the era of pay transparency laws and remote positions, determining compensation is likely to leave you scratching your head. You may be wondering, does location even influence salary anymore? or where should I look to gather market data?

Determining the right salary number or range can feel overwhelming, but in reality, it just takes a few more steps these days. Business owners, recruiters, and other decision-makers simply need to be a little more methodical in their work to ensure they're setting fair and competitive compensation.

Here are three tips for navigating the brave new world of employee compensation:

Be a Smart Researcher

You heard it in school, but it’s true: Research is a skill. Anyone can go onto job boards, type in titles, and start copying down salary ranges. This might be one step you take in market research, but it shouldn’t be your only one. Here's how to dig a little deeper:

Investigate the Number

Unless you live in a city or state where employers are required to post salaries, the ranges you’ll see on a job site like Indeed or LinkedIn are almost always the job board’s estimations. In other words, they rarely come from the employer and they’re not very accurate.

For recent, reliable data, consider purchasing a compensation survey. Compensation firms gather data from thousands of businesses and consider things like company size and region. If you’re not sure where to start, contact us! We’d be happy to point you in the right direction.

Look Beyond the Title

You can’t always trust job titles. What might be a manager-level role at one company could be a director-level role at another. As you comb through listings, make sure you’re paying attention to the skills, responsibilities, preferred years of experience, and other important details that might be different from the job you’re listing.

Avoid Illegal Practices

While quite a lot has changed, antitrust laws have stayed the same. The Sherman Antitrust Act specifically outlaws businesses from manipulating markets. Among other monopolistic practices, this federal law prohibits businesses from sharing compensation data with market competitors.

While you may envision secret after-hours meetings, colluding can look a lot more innocent. It’s possible to participate without even realizing it, especially today.

In the era of Facebook and LinkedIn groups, we’re able to communicate and develop relationships with our competitors more easily. It may be tempting to strike up a conversation about employee pay. But even if you’re not directly using data to make salary determinations, you could still be violating antitrust laws.

Factor in Non-Monetary Incentives

According to a survey by Glassdoor, 60% of respondents said they “strongly consider perks and benefits offered” before accepting the job. So, if you’re looking for top talent but don’t have the budget to pay above-market salaries, non-monetary incentives can be just as attractive.

The key is to offer benefits candidates value. You could offer a free snack bar or a gym membership, but those alone aren’t likely to sway someone one way or the other.

So, what perks will make the difference? Benefits related to flexibility and work-life balance are increasingly important to candidates. Many even consider them a requirement. Fractl reported that only 12% of people would take a job with a higher salary and fixed schedule over one with a lower salary and flexible one.

You don’t always need to offer the most money. Think about implementing a hybrid work policy, making hours shorter on Fridays, or closing the office for a week each December.

Once you’ve hired your candidates, Future Systems, Inc. can help your organization or business with the full onboarding process. Reach out to request a quote.