Wood Words

Revamp Your Compensation Strategy to Attract, Retain and Reward Your Team

We’re waaaay behind.

Several states raised their minimum wage on January 1, 2017.

But Tennessee? We don’t have a minimum wage law. By default, our minimum wage is set at the federal level, which was last raised to $7.25 in 2009.

Competition for the best people is getting tougher. Jobs are expanding. And the cost of living is on the rise. In an economy at “full employment,” $7.25/hr. is simply not enough to attract, retain and motivate a high-performing team.

How can you determine the “right” wage levels to pay employees?

Setting fair pay rates can be tougher than it appears at first glance. On the one hand, you want to recruit exceptional talent and compensate them adequately – but your business doesn’t have unlimited resources.

To find the pay you can afford:

  • Consider the financial impact each person/role has on your organization. How much money does the individual save your company? How much does it cost for the role to remain unfilled? How much does this person’s work free others to accomplish high-priority tasks?
  • Consult relevant, recent salary surveys. For each role, factor in the cost of living for your area, local talent availability, as well as what competitors are paying for similar jobs. The tighter the market, the more you’ll need to pay to attract and keep great employees.
  • Decide what your organization’s priorities are. What does it really mean to “run a good business”? “Low prices, high profits” is only one option. “Low prices, great service, high profits and good jobs” is another.  Let your priorities guide your decision-making regarding pay.
  • Commit to investing in people. Increasing wages is one way to invest in your team – but so are effective onboarding, mentoring and offering real opportunities for advancement.
  • Think long-term. Increasing pay may impact your bottom line in the short term, but the long-term payoffs may more than compensate for the change. Run the numbers for several months or years into the future, not merely for this quarter.

Have questions about how to set fair pay rates?

Wood Personnel is here to help! We can help you stay competitive by leveraging pay data we’ve gathered through working with hundreds of Middle Tennessee employers. Give the recruiters at our Lebanon employment agency, or your local Wood Personnel office, a call.