Reasons to Offer a Competitive Salary
A competitive salary is a wage and benefits package that meets or exceeds the average salary package offered by the employer’s competitors for a similar job in the same profession and within the same geographical area. Employers often use salary surveys conducted by government, professional and industry-related organizations to determine an average salary for a specific position. An employer also takes a job applicant’s level of education and experience into consideration when making a competitive salary offer. If you are an employer, there are several reasons to offer a competitive salary to a job applicant or an employee.
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Attract Applicants
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Attract well-qualified job applicants by stating in the job posting that the salary is competitive. This informs an applicant that she will receive fair compensation, if hired, and shows your willingness to negotiate the salary according to the applicant’s qualifications. Salary proposals are a major consideration to an applicant who has received more than one job offer. An applicant may perceive an employer who has offered a competitive salary as being more flexible and respectful of her qualifications than an employer who offered a wage that is less than competitive or fixed.
Retain Employees
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An employee who not receiving a competitive salary is apt to look for a job that offers better pay. If an employee informs you that she has received a written offer for another job that provides a higher salary, counter-offer with a competitive salary to show that you value her qualifications and want to keep her on as an employee. You might even prevent employee job-shopping by providing your employees with a salary increase that brings their pay and benefits into line with other regional workers of similar qualifications and responsibilities within the profession.
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Job Satisfaction
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When unemployment rates are high, you may have a large pool of applicants from which to hire. You may be tempted to offer less than a competitive salary if an applicant seems desperate for a job. This, however, can backfire. A competitive salary is a major factor in job satisfaction. Lack of job satisfaction can lessen an employee’s productivity and sense of commitment to the company. On the other hand, an employee who receives a competitive salary is more apt to find satisfaction in her work and live up to company expectations.
Value Benefits
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A competitive salary may include benefits such as bonuses, health insurance, a retirement plan and other premiums. By offering a competitive salary, you demonstrate to the potential employee that you recognize the value of these benefits and are willing to offer benefits comparable to those offered by other employers in your region and profession. Benefits such as these can contribute to an employee’s health, lessen financial demands on her family and increase her loyalty to the company.
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References
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