Competitive Salary: How to Have an Ideal Remuneration in Your Company?

Competitive Salary

Currently, every successful company has a competitive salary for its work team.¬†The remuneration received by a company’s collaborators is usually an essential factor to guarantee their loyalty and improve their benefits within the fulfillment of their functions.

Now, how to guarantee a competitive salary for your collaborators? In this post, we will teach you how to offer a fair salary for your team and you will learn about the importance of these types of factors within an organization.

What is a Competitive Salary?

When we talk about a competitive salary, we refer to those regular payments received by the members of a company, which are comparable to the amount of money received by other people in similar companies and who hold the same or similar positions.

Within the competitive salary, values ‚Äč‚Äčsuch as the following:

  • Benefits
  • commissions
  • bonds

It can happen that the average salaries of a company are lower than that of other companies, so many managers choose to compensate for this weakness, betting on greater incentives, which allow them to attract and retain the company’s human talent. This is why there are bonuses for night hours or commissions for sales employees.

Within what is the competitive salary many factors come into play, such as the following:

  • Geographic location
  • Average cost of living
  • Offer and demand
  • Profession type
  • state of the economy

Why is it important to have a Competitive Salary in Companies?

A competitive salary in companies is fundamental since it allows for rewarding the experience of collaborators in the face of the difficulties involved in fulfilling their duties within the company.

Organizations must have a competitive¬†salary scale¬†to be able to support their team in any possible situation.¬†In this way, the employee’s commitment to the company is improved and it helps him to motivate himself daily to exceed his performance and be happier within the company.

This point is reflected very well by the¬†Forbes portal, which states that ‚Äú¬†it has been proven that happy employees are 12 percent more productive, while unhappy employees are 10 percent less productive.¬†Also, companies with happy employees can outperform their competitors by 20 percent¬†.‚ÄĚ

On the other hand, organizations will also greatly benefit from maintaining a competitive salary, since companies will have greater prestige and will attract the best talent that is available in the market. Likewise, the company’s staff turnover will be reduced.

Recommendations to Establish A Competitive Salary

So that you can manage the competitive salaries that are handled within the labor market, it will be of great help to have a series of guidelines so that you can make the most of this type of resource.

Among the points that you should take into account when organizing the salary structure of your company, are the following:

1. Research Market Salaries

The first step to being able to manage the issue of competitive salary is to know the prices that are being handled in the market. Carrying out a good salary study will be of great help to have a frame of reference to offer the best options to your collaborators.

Also, you should take into consideration what kind of salary policy you will have in your organization. If you want to have an equitable remuneration structure within your company and reduce any possible salary gap that may exist, it is possible to take into account several criteria:

  • Years of professional experience
  • Academic training
  • Social and communication skills
  • Mastery of technical knowledge

2. Check the Economic Situation of the Company

With competitive salary research in hand, it is important to know if your organization is in the business of offering this type of remuneration, either within the fixed salary or through incentives and compensation.

Now, how do you know if your company is willing to offer a competitive salary? This will depend on your company and the vacancies you are needing and what you are willing to pay. 

Within this point, it is important that you remember the following: although low salaries tend to scare away talent, the prestige of a company can be vital to accept a job offer. Therefore, it is key that, when guaranteeing a competitive salary, you worry about offering business training and important social benefits, which will be useful to reinforce the image of an organization among talents.

According to¬†Gartner, in order not to offer competitive salaries (because they cannot afford it or do not want to), ‚Äú¬†some companies choose to reduce the number of working hours of their employees and thus justify maintaining the salary level.¬†This offers companies with less liquidity the opportunity to compete with organizations that offer higher compensation overall, but business-as-usual hours¬†.‚ÄĚ

3. He has Negotiation Skills

Within the topic of competitive salaries, it is essential to have negotiation skills. Of course, since it is a skill, it requires training and discipline, especially in the management of persuasion and communicative fluency.

Do you want to know how to negotiate a competitive salary? We will give you some tips that will be very useful:

  • Have a salary proposal ready a few days in advance
  • Highlight the benefits of the organization
  • Convey your message clearly and use the right words
  • Use a friendly tone of voice
  • Listen and avoid interruptions when the other is speaking
  • Be empathetic and grateful

4. Follow up with the Collaborator

If you want to make sure that you hired the best talent available in the market, you will need to track their performance. Not without first worrying about offering him the right tools so that he can carry out his activities in the best possible way.

As a company leader, you must try to maintain proper communication with your team, provide the same growth opportunities for all employees and worry about guaranteeing their training and continuous training. All these factors have an impact when maintaining a competitive salary within your organization and the members of your workgroup will know how to recognize it.

Having a competitive salary within your company will be of great help to managing your work team in the best possible way. You will be able to keep your collaborators committed to their work and it will serve to attract the best talent available in the market.

This has been our post. If you want to know more information about competitive salary and how to apply it in your company, sign up for our Academies, where you will find everything you need to know about managing your work teams.

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