3 Great Compensation Strategies For Small Businesses

If you're a small business owner and are looking to attract new employees, you'll need to start by taking a look at your compensation strategies. Though at first glance this might appear to be a fairly simple affair, the nuances of an effective strategy that draws top talent can be lost on many. So if you're looking to make your company stand out from the rest, take a look below at three great compensation strategies that will have prospective employees doing a double take.

More Than the Minimum

One way to make sure that your employees aren't invested in their work is to give only minimum salary increases and bonuses. Doing so ensures that employees not only expect very little from their employer, but it also pushes them to seek opportunities elsewhere. Because many workers are now far more willing to move for a job with better pay, a compensation strategy designed to placate (rather than motivate) employees is one that is bound to backfire. Even if money is tight, make sure that your employees know they are appreciated with wage increases and bonuses that are greater than what they can expect from the larger market.

Beyond Base Pay

Making base pay competitive is certainly one thing you can do to attract talent to your small business. But keep in mind that a few figures don't mean everything to prospective employees. In fact, offering a better benefits package than the competition is far more likely to set you apart. Be it tuition allowances, superior health insurance or more flexible vacation time, you should never underestimate how a good benefits package can improve your employees' lives more so than a standard paycheck.

Employee Knowledge

Trying to keep pay a secret in this day and age -- especially within in a small business -- is doomed to fail. Instead, seek to be more upfront with your employees about your company's pay structure, and inform them of any changes immediately. In addition, try to make an effort to sit down with each of your employees and explain why your pay structure operates the way it does in clear and simple language. This will go a long way toward eliminating confusion and putting to rest any potential complaints employees may have regarding pay. If your employees know why they're being paid what they are (and what they can expect in the future), there will be much less financial drama.