Build a Compensation Package That Attracts Employees

Summary

• Start by defining the skills and experience you need, then build an offer that can compete for those candidates.
• Look beyond salary to benefits, paid time off, retirement plans and flexible work options.
• Research compensation for similar roles in your industry and geographic area before setting pay.
• Put the full offer in writing so candidates understand the role, compensation, start date and benefits.
• Balance competitive hiring offers with your budget and the pay of current employees.

Hiring the right people can strengthen your business, but attracting qualified candidates takes more than posting an open position. A thoughtful compensation package can help your business stand out while keeping hiring decisions aligned with what you can afford.

Know What Candidates Value

Salary matters, but candidates may also compare the broader benefits that come with a job. Depending on your budget and workforce, your package may include health coverage, dental or vision benefits, a retirement plan and paid vacation time.

Student loan assistance may also appeal to some candidates. When deciding which benefits to offer, consider what is realistic for your business and what comparable employers provide.

Document your vacation policy and other important benefit details so employees know what to expect, including how time off may increase over time.

Consider Flexibility as Part of the Offer

Work arrangements can be another way to make a position more attractive. Flextime may allow employees to adjust their schedules or complete a full workweek in fewer days. Remote work can give employees the ability to work from home or another location.

Flexible arrangements can make it harder to maintain a connected workplace if they are not managed intentionally. Regular virtual meetings or in-person gatherings can help employees stay connected to coworkers and the business.

Build a Pipeline Through Internships

Internship programs can introduce high school and college students to your business while giving them practical experience. Depending on the program, internships may take place during the summer or for academic credit.

An internship can also help you identify people who may be a good fit for future openings.

Research Salary Before Making an Offer

Before setting compensation, research what similar employers pay for comparable positions. Salary surveys from chambers of commerce, the U.S. Department of Labor, trade associations, consulting firms and subscription services can provide useful benchmarks.

Location matters, too. Pay can vary from one city or region to another, particularly for lower-paid positions and roles requiring less experience. Regional salary information can help you set compensation that reflects your local market.

Put the Job Offer in Writing

You can extend an offer by phone or email, but a written offer creates a clear record of the terms you discussed.

Include the position title, general duties, starting salary, start date and an overview of vacation time and benefits. You may also include a deadline for the candidate to respond so you know when to move forward with other candidates if needed.

Keep the Full Cost in Perspective

A competitive offer should help you attract talent without putting unnecessary pressure on your business. Consider the total cost of salary and incentives alongside your company's financial needs.

As you plan for hiring and other growth expenses, it can also help to understand the financing options available to your business. If hiring puts additional pressure on day-to-day expenses, a working capital line of credit can help you manage short-term cash flow needs.

If market conditions require you to offer new hires more than current employees earn, consider how that difference could affect your existing team. Reviewing current salaries based on employees' skills and experience can help you address pay differences. A salary structure with a base range for each role can also make future pay decisions and
scheduled raises more consistent.

The goal is to create an offer that works for both the candidate and your business. Research the market, understand what employees value and build a compensation approach you can support over time.