There are 31.7 million small businesses in the US, which accounts for 99.99% of all American businesses. If you’re an entrepreneur, then it’s likely that you’ve created or will create a small business of your own.
It’s important that you pay employees a fair salary to retain loyal workers. But you don’t want to pay them too much either, as it can eat into your profits and even put you out of business.
So are you wondering how to set salaries that work out for everyone involved? Then keep reading. We’ll give you a brief guide so you can be a good boss.
Consider Their Duties
First, figure out what the job description is. When you know exactly what you’re expecting of the employee, it’s easier to put a price on their hourly wage.
For example, if they just have to stand around as a cashier, you won’t have to pay them too much. But if you’re asking them to do things that might be hazardous to their health, you should bump up the pay more.
Look at the Minimum Wage and What Competitors Are Paying
Now check out the minimum wage for your state. You don’t want to break any laws, after all. Plus, knowing the minimum wage will help you set the rates for your own business.
Next, check out the competition; not only does this give you an idea of what a fair rate is, but it also gives you a chance to one-up your competitors! Set your rates a little higher, and you’re sure to be the more attractive company to work at. As a result, you’ll get the best employees possible.
Determine What You Can Afford
Before you go setting a rate that’s too attractive, you need to determine your budget first. In general, it’s normal to spend up to 80% of your gross revenue on employee pay and benefits.
It can help to get professional help to perform payroll risk management. These experts can help you do employee payroll and determine if you’re spending too much money. Get more info here.
Listen to Your Employees
Good workers are hard to come by, so make sure you do your best to retain them. One way to do so is to listen to them if they voice concerns about their pay.
You might think you’re giving fair compensation for their work. But you might not realize there are some hidden risks or laborious tasks they need to handle.
If multiple employees come to you asking for higher pay, then listen! They’ll appreciate that you acknowledge their needs and will be loyal workers.
Pay Employees Fairly
The bottom line is, you need to pay employees fairly. Evaluate what you’re asking them to do, check what competitors pay, and then set your own wages.
And if your workers voice their concerns about how much they’re being paid, listen to them! You’ll be surprised at how much they’ll appreciate it if you do. For more information on business matters, read the rest of our blog page now.