How small businesses can attract top talent: Offer competitive compensation
Part two in a five-part series on small business recruitment.
One of the biggest challenges small businesses face when competing for top talent is putting together a compensation package. You can’t expect to compete for top talent if you aren’t offering compensation candidates will value. While this can be a challenge for some small businesses, it’s vital to getting the talent necessary to thrive and grow.
“Top talent or not, people want to get paid,” says Steve Strauss, senior small-business columnist at USA TODAY and author of 15 books, including “The Small Business Bible.”
But you can only go so far on pay alone, so you have to find where your advantage is, Strauss says. That can include culture, engagement, mission and other aspects of your business. “That’s where small businesses have the competitive edge. If you offer a fun place to work, people like coming to work, they’re engaged — that makes a difference. They feel like they’re listened to and they like what they do. If you can give them that, you’re ahead of the game.”
Raj Sheth, founder and CEO of Recruiterbox, an ATS software developer with 20 employees, agrees. “There’s always a company that can outspend you.” He suggests offering stock options or equity in the business to help build a compensation package. “It’s an extremely powerful and tangible motive for somebody to pick your small company.”
“Competitive” can vary by local market and industry, but it’s important to get a ballpark figure through a salary survey or website. “Our strategy is to hit 75 percent of what the market is paying,” says Susan Strayer LaMotte, founder of exaqueo, a branding and talent consulting firm for startups and high-growth companies. If you’re able to meet only 50 percent of the market-rate salary, then you’ll need to make up for it with a stronger benefits package.
Design creative benefits and perks packages
There are many affordable benefits employees love that can help you build a competitive, valuable compensation package. In addition, look into new Affordable Care Act rules that may apply to your organization’s health care offerings. And in the next post in this series, we’ll look at perks that don’t cost a lot but help build your company’s unique culture.
According to a survey by Towers Watson, almost half of employers expect to see voluntary benefits as a very important part of compensation packages by 2018, compared to 21 percent in 2013.
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Voluntary benefits are those companies offer as an option for employees to buy if they choose. By getting these through their company, employees can get the benefits at a lower cost than they would get by shopping for them on the open market.
These benefits traditionally include additional insurance for vision, dental, life, disability and even pets. They can also include group legal plans, financial planning assistance and employee purchase programs. Putting together a voluntary benefits package that employees can buy into if they’d like to is a great way to create value without adding to your company’s costs.
While larger companies may find it easier to offer more money to recruit top talent, small businesses have their own advantages. Identify yours to make the best possible value proposition to potential candidates.