Most business owners prefer to recruit employees with proven talent in their fields. This instinct often encourages entrepreneurs to hire top talent quickly, offering competitive salaries and benefits—especially for employees with specific technical skills that may result in direct growth for the company.
But is paying high always the way to attract the best employees? After all, no business can pay its workers more than the value added to the business. At least, not long term anyways.
In order to maintain an ideal benefits strategy, business owners should have a clear picture of the type of employee they want to hire, as well as a firm understanding of their business’ needs. They should also keep in mind that if the compensation level is perceived as low, it will negatively impact both talent attraction and retention.
Again, offering high benefits makes sense in situations where the skills and ability of an employee has a direct impact on the revenue and success of the business; however, for businesses focused on customer intimacy or operational efficiency, a high compensation may neither be affordable nor required. Here, employees make the most impact through process excellence, teamwork, service orientation and discipline—rather than through individual innovation.
It’s also important to customize a benefits plan based on how the employees perceive value. Owners should therefore have a clear understanding of the demographic of its employees (age, skill level, etc.). Making the plan tax-friendly and having the right mix of fixed pay and variable (performance) pay will also bolster a high-performance culture.
Have any questions? Feel free to contact a Cleary representative and we’ll help you build the best benefits strategy for your business.