Attracting and retaining good candidates during a labour shortage is no small feat! Employee compensation, in all its forms, is crucial to keeping your top talent. But how do you decide what wages, raises and benefits to offer?
Setting a new employee’s salary
Congrats! You’ve found an excellent candidate for a vacant position in your company. You want to offer them the most competitive salary your budget can accommodate. Here are four points to consider when setting a new hire’s salary:
How do salary increases work?
Let’s clarify something right away: the law does not require you to grant salary increases, EXCEPT to comply with the minimum wage. Beyond that, raises are at your sole discretion. However, salary increases are a good way to retain employees and remain competitive.
If a company decides to give salary increases, it’s important to establish the bases for these increases and to ensure employees understand them. Here are the two salary-setting criteria most often used by companies:
Total compensation: Other forms of recognition
Recent studies have shown that a salary increase under 7% has no impact on an employee’s motivation. At 7 or 8%, there is an impact, but in the very short term only. To attract and retain the best employees, you need to think about everything you have to offer as an employer, what sets you apart. We usually think about benefits like vacation, paid holidays, bonuses, group insurance and retirement savings programs. But don’t be afraid to venture off the beaten path. Here are a few examples:
- Reimbursement of public transit fees
- Reimbursement of costs of training or studies
- Advancement opportunities within the company
- Referral bonus for new employees
- Discounted gym memberships or access to a gym in the workplace
- Possibility of working from home
- On-site daycare
- Services offered in the workplace (agreement with a garage to perform tire changes onsite, or with a laundry service to collect and return laundry at the workplace)
- Team and/or family activities (golf tournaments, BBQs, Christmas parties)
Compensation and its add-ons
For any questions about employee compensation, contact your CFIB counsellor—they have the answers you need!