5 Reasons To Offer A Competitive Salary
Creating Candidate Appeal Through Competitive Salary
In sport, every sports team supplement for a competitive edge, like recruiting. It's not simply good enough to have the average wage or an excellent environment to work in, as many of your competitors also have these factors. It all comes back down to basic competitive salary and statistics say adverts have 40% less clicks on low rates when attracting talent.
What does a competitive salary mean?
The competitive salary meaning is a "competitive salary is one that stacks up well when compared with similar jobs" A great example of a highly competitive sector to use for this is warehouse workers, currently a very strained industry due to the environmental factors of Covid, furlough and Brexit, where the demand for candidates is high, but the supply is low.
Currently, many Northamptonshire recruitment agencies and businesses are paying minimum wage to the staff at £8.91 per hour and other agencies will pay a competitive salary of £14.40 per hour. Regarding the competitive wage positioning, the £14.40 jobs would be more appealing to the candidates, as the value in terms of candidates is the highest salary.
5 Reasons to offer a competitive salary
1) Good Talent Shortage- Currently, due to external environmental factors such as Brexit, Covid and furlough, the workforce available in the UK is limited and highly competitive, with firms one-upping each offer to take the top talent. Leaving many firms either short-staffed or unable to meet business demands.
2) Increased productivity- Staff on higher salaries are 12% more productive than those on lower wages in the same role. Mainly due to money being a significant motivator for staff members. This increase in productivity has the knock-on effect of ultimately boosting the bottom line of the company.
3) Job referral- Staff who are paid are more like to refer friends and family to work at your company saving time money in recruiting new staff and gaining like-minded workers.
4) Increased retention- Offering a higher rate makes it less appealing for staff members to leave and join competitors or find work else were, as the rates aren't being matched.
5) Reduced cost- The average cost of recruiting a new staff member is "£3,000" + a further average of "£1,068" on training and onboarding. A company with low retention and high staff turnover can face annual astronomical costs of recruiting, which could have been saved by paying the employee more than your competitors.
Retention Solutions Case Study; Henry Ford $5 Day
How did Henry Ford solve a candidate retention problem in 1915? In the transition of forming the assembly line Ford is well-known for developing. The nature of work changed, making skilled craftwork rare and replaced with straightforward tasks. These very mundane tasks bored workers, creating a 370% staff turnover rate.
Any production line or supply chain requires a workforce to deliver products from end to end, so solving the significant retention problem was crucial. Ford reasoned that a bigger paycheck might make the factory's mundane jobs more tolerable. Ford increased the daily rate from $2.30 to $5 to generate the appeal of working on the production line.
In increasing the wages, sales went up; retention improved. It allowed workers to earn the living wage of the time. It also brought the working class into America's middle class - workers' financial worries reduced, allowing them to focus more on the work, in turn boosting productivity.
How do you position your roles salary competitively?
To be a competitive employer and pay a competitive salary, you must be aware of your competition. You can be mindful of your competitors' recruitment techniques by searching the roles you are hiring for on a job board and viewing what the competitors are offering in terms of benefits, work environment, pay and adjust your offer based on the research and competition. Alternatively, get in touch with an industry recruitment specialist and ask for advice on how best to attract the top talent.
Impact recruitment can provide detailed market knowledge for industrial and commercial based businesses in Northamptonshire and Peterborough; get in touch with a consultant today to gain a custom recruitment solution for your business.