For many organizations, determining a set compensation package for each job title is a significant and time-intensive role of the HR department. But what if you are bringing a new team member on board and don’t have this set package to work from? How might you go about deciding how much to offer a new hire? Here are a few tips to keep in mind.
Use industry and local market comparison studies to make sure your compensation is in line with that of similar organizations with similar positions.
If you already have people working in the same function as the candidate, you should be offering a salary in line with what your existing employees are making. Taboo as it may be, issues of pay are often discussed in the workplace, and the last thing you want is for one of your best people to find out that the new hire came in earning $15K more.
Know the value of the whole package
Benefits, especially healthcare insurance packages, have never been pricier, and how competitive your offerings are can and should affect the base salary you’re willing to pay a candidate. You must understand how much it costs you to provide certain benefits to your employee, and pass that knowledge on to the candidate during negotiations.
Don’t use the recent recession as an excuse to pay less
I hear that the bad times haven’t completely ended for your company. Nevertheless, you don’t want to offer a salary that’s much lower than what you would have paid the same candidate before the economy went south. If the pay doesn’t match up with the candidate’s background and anticipated contribution to the organization, either she will jump ship as soon as things improve, or will stay on feeling undervalued and unmotivated.