If you have reached the point in your business where it is time to bring on staff to help expand, congratulations. This is an integral step to ensure you can continue working on top-line business activities with the goal of business growth. The new staff member you put on might be an office assistant to help with administrative tasks, or possibly a new salesperson to get your product or service in front of new customers. The next challenge you have is determining how much to pay your new employee.
This is a common problem for many SME owners and is a regular question they ask when posting their job advertisements to Adzuna. In our experience, when small business owners include a salary range in their job advertisement in increases the application rate by 30%. Offering the right salary is important and will usually be the first element potential employees will consider. Offer too little and you run the risk of missing out on the right person for the job.
(1) Comparison Tools
Numerous salary comparison tools exist to help business owners determine how much to pay an employee. The tools were created by combining data with industry knowledge.
- Hays Salary Guide: This tool is simple to use. Just type in the job type, level, and location, and the tool will calculate the average rate of pay for the position. It will also offer the highest and lowest level of pay.
- ValueMyCV: This tool is owned by Adzuna and can calculate how much a salary is worth in the current market in seconds. The user simply drags a copy of a CV into the portal and ValueMyCV will read every element of the CV including job title, skills, location and education. The tool works by comparing the CV with more than 50,000 CVs complete with salary information.
(2) Industry Standards
As a small business owner you must comply with minimum wage obligations. The Fairwork website offers a tonne of information on the minimum amount you must pay workers. A guide is also available to check the industry award for specific jobs.
(3) Smart Software
Accounting software such as Xero and Reckon have the capacity to create in-depth budgets. If you are thinking about taking a new member of staff on, it is prudent to work out exactly how much you can afford to pay them, while still meeting business goals. Accounting software can help you get the balance right.
(4) Other Options
One of the trickiest periods of owning an SME is the transition to putting that first permanent member of staff on the books. Often it means taking a pay cut for the business owner until the new employee is earning their keep. Many SME owners outsource administrative and bookkeeping tasks to help free up time for top of the line business activities. This might be in the form of a virtual assistant to help respond to customer queries, or a bookkeeper to pay and chase invoices. Outsourcing business tasks is cost effective and can help a business owner transition to employing that first permanent employee.