Only 29 percent of small businesses have a compensation strategy, according to data collected for PayScale’s Compensation Best Practices Report, compared with 37 percent of all organizations — despite the fact that small businesses must compete with larger orgs for talent, generally with smaller compensation budgets.
That doesn’t mean that SMBs aren’t paying more for competitive jobs. Forty-five percent said that they do, on par with all organizations. But without a compensation strategy, there’s no way for orgs to tell if their money is being used effectively … or wasted. It’s even more important for small businesses to be strategic with their compensation dollars.
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What Can a Compensation Strategy Do for Your Small Business?
In short: maximize your compensation budget.
Small businesses need to compete with big companies for competitive jobs and hot skills. If your organization doesn’t have a compensation strategy, you might wind up throwing money at the wrong end of the problem.
For example, 45 percent of SMBs say they pay more for competitive jobs, but they’re more likely to target individual employees rather than hard-to-fill job roles. That’s a missed opportunity.
Here’s how SMBs compensate competitive jobs, compared with all sizes of organizations:
A compensation strategy can also help you use perks and other benefits to attract highly skilled candidates, when your budget won’t stretch to offering a higher salary.
Curious about how else a compensation strategy might help your organization? In the Small Business Edition of PayScale’s Compensation Best Practices Report, we’ve gathered best practices from 3,000+ professionals from companies like yours to find out how they’re maximizing the effectiveness of their compensation spend.
Find out how to:
- Fill competitive roles
- Compete with larger companies for hot talent
- Give raises that boost performance and retention
You’ll find best practices, real-world advice and insight into how your peers do compensation in our report. Check it out here.
Tell Us What You Think
Does your organization have a compensation strategy — and if so, what are the main factors that it addresses? We want to hear from you. Tell us your thoughts in the comments.