What Other Employers Are Paying
Getting salary data is the first step in determining what
"competitive" pay is for the work you want done.
Why should you pay attention to what others are doing? You want to
offer a competitive wage to make sure you attract the best candidates and retain
the best employees, but you'll want to do it without putting yourself in the
poorhouse. The best way to find out what a competitive wage is in your area is
to find out what others are paying for the same type of work.
Other reasons to keep on top of market rates are:
- Inflation: inflation causes the buying power of your employees'
salary to decrease, when the dollar amount remains the same. Since many
employers adjust for inflation each year, maintaining competitive pay may,
in fact, require you to adjust every 12 to 18 months.
- Mobility of the workforce: as the educational level of your
employees rises, more will change jobs and change employers more frequently.
At the lower end of the pay scale, turnover can be high and makes it
necessary to keep on top of who's getting paid what in the field where your
- Credibility: without wage and salary data, it's impossible to know
that you offer pay that is fair in relation to other employers. If your
employees begin to feel underpaid, you won't be able to tell them, with
confidence, that they're not.
- Threat of unionization: as your business grows and you gain more
employees, you need to be aware that some unions have targeted small
businesses for organization activity. If your pay is highly competitive, you
reduce the likelihood that your workers will consider joining a union.
But how do you get your hands on salary data?
Small businesses in particular may not have a great deal of time to hire
someone to help out, so getting salary information isn't something you'll be
able to spend days and weeks doing. So where do you go for quick data? There are
a number of sources: