Designing a salary structure for your business


Coming up with a salary structure on your own isn’t easy and often requires the help of experienced job evaluation solicitors. But spending the time and money to get it right can really help you out in the long run, especially if you have your sights set on growing your business in the coming months and years.

Why do I need a salary structure?

Having a solid salary structure in place helps you to allocate the right amount of your budget to pay employees according to their value. Not only will members of staff have a better understanding of what they could earn should they progress within your company, but job candidates will be able to make a more informed decision about whether your company is right for them. This can make recruitment go a lot more smoothly and reduce your employee turnover rate.

How to start designing a salary structure

While its best to have a professional work alongside you, these are some of the steps you can take to get started:

Start with job evaluation

Before you can even begin attaching a salary to a job you need to determine how that job is valued within your business. Many employers choose a numerical system to rank various roles, with senior positions earning the most and apprentices right at the bottom of the ladder. Of course, these numbers can vary by department, which is why it’s crucial to have a good way of organising this data.

You’ll probably find that some roles end up with the same ranking because they have a similar value. In these cases, it’s often a good idea to create job families to structure your salary scale. These families don’t need to be in the same department or involve a similar skillset, they simply need to have the same kind of value for your business.

Do some market research

You want your salaries to be competitive with the current job market because paying too much or too little could hurt either your finances or your ability to find the best talent. While you can negotiate with candidates, you should have a range in mind for each type of role you have at your company. For exceptional candidates who bring with them a wealth of experience, you could adjust this a little on a case-by-case basis.

Understand your budget

It’s no good designing a salary structure that doesn’t fit in with your current budget. While many business owners would love to pay their employees more than competitors, sometimes it’s just not possible. Be realistic about what you can afford to give your staff and, if this number is lower than you’d like, you could offer a bonus scheme that’s dependent on both personal and company performance.

Don’t forget about progression

Most employees will want to be able to progress in their careers and earn more money the longer they work for you. Try to build a progression structure side by side with your salary system to give staff a better understanding of how they can achieve their career goals.


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