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How to attract the best in the industry without overpaying

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When employees are fairly compensated for their time and their skills, they tend to stay in their jobs for a longer period of time and this is very good for business. If they are underpaid, they will eventually look for a better offer elsewhere and you will have to look to replace the person or hire an independent contractor to help out with what you need. Overpaying is probably not what your company has in mind either because the budget would have to suffer. What should a company do to attract the best in the industry without overpaying?

Most of the time, companies use market data to research the value of their jobs. This market data helps companies using compensation surveys to see in detail what other companies are paying their employees for the specific position they have in mind. The compensation survey gathers data such as salary surveys including compensation information, level of education, years of job experience, number of years worked for the company, and training to determine what companies throughout the region pay their employees for a specific job in a specific industry. Companies that participate in this type of survey usually provide their own compensation information. The survey is typically conducted on a semiannual, annual or biennial basis. The process of gathering information and creating a salary survey takes diligent planning and execution that requires economic contribution, people, resources and time. However, some companies choose to conduct their own surveys using their own resources, employees and experts.

Conducting a salary survey can take between a month and six months depending on how many companies participate and how many positions need the research done. The more participants and the more positions that need to be surveyed can take longer depending of the kind of information asked for each person in a given job. After collecting all the data, it will take probably another two months to process the provided information and make the results available to the survey participants.

To have an idea of how much to pay an employee for the type of job he's performing, you need to look for studies that describe the type of industries, including data on jobs, salaries and regions that are most applicable to your needs. Look particularly at your competitors and peers. For many jobs you may be competing for the best candidates in different industries but the same geographic area. Look for the best match between the survey and your company. Take time to compare job descriptions, salaries, compensations, years of service and performances. Be sure to use different data for a fair comparison and only the one that can be applied in your situation. This means if you have a small business, you don't want to use data from a large corporation to base your decision on how much to pay someone. It's important that you use survey results that compare companies of a similar stature and size. It's also crucial that jobs and salaries surveyed are comparable to the position for which you are interested. Do your best to match the job and the salary descriptions.

There are many qualified and skilled people looking to work for a company that compensates their time and efforts pretty well. If you treat your employees well, you will be very pleased with what they can do in return for you and for your business. You can avoid overpaying someone that is good at what he does by simply taking the time to read surveys on how much money other companies are paying their employees for doing the same type of work.

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