If you are an employer with a startup company or an SME, then you might be the person who is in charge of not only trying to attract the best young talent to work for your company; you might also be the person who decides how much you need to pay these people.
Whilst you want to make sure your recruits stay around with your company by paying them an attractive salary, you are also in business. You want – and need – your company to make money so you can’t afford to pay your staff way over the oods.
But you need to pay your team fairly. And you want that team to be happy working for your company. Otherwise you are going to find yourself on another costly – in both time and money – recruitment drive.
Employing young people is an investment and, as an employer, you need to decide what that investment is worth to you.
Whether you are employing graduates, Apprentices or young people into part time positions at evenings, weekends and holidays, those young people will all have something different to bring to the table with regards to the continued success of your company.
It is down to you to decide what you can afford to pay, how valuable you think those young people are to your company and how much time, training and professional development you are offering in return.
Obviously, there4 are minimum amounts that you are legally obliged to pay and it is up to you and your HR team (if you have one) to make sure you keep yourself up to date of how much these amounts increase in government Budget announcements and when those increases come into effect.
As an employer at an SME, you might not be able to compete with the big multinational corporations when it comes to offering attractive financial packages but there are other advantages you can offer staff that can make up for this.
What Do SMEs Need To Look Out For?
It’s often said, now, that, in contrast to millennials, Gen Z are looking for more stability in their work life and want longevity. Flitting from job to job is a thing of the past for this generation.
That doesn’t mean they are not going to move on if they aren’t being paid a fair wage. When young people come into your company to do entry level roles or graduate jobs, they must be fairly paid if you want to retain the best talent and reduce your staff turnover and recruitment costs.
Yes, you need to make your business successful and profitable but it is your staff who are going to be the team to help you do this.
For some roles, lots of young people complain they aren’t being paid enough to keep up with the cost of living outside of the workplace. This can make your staff members stressed, worried and preoccupied when in the workplace rather than concentrating on their roles.
Staff who feel they are fairly paid and are not worried about their cost of living are more likely to be more focussed in the workplace. This means you have a more productive staff which in turn can make a more successful company.
For lots of SMEs, although you may not be able to compete with higher salaries offered by multinational companies, there is a higher chance that your staff might be employed from within the local community. This means they won’t have higher commuting costs that staff working for city centre companies might be faced with.
Why Is It Important To Pay Employees Fairly?
There are employers out there who will try to get away with paying their young staff as small a wage as possible but it is very important to pay employees fairly.
Yes, there is a National Living Wage, a National minimum Wage and minimum wage brackets of Apprentices of different ages. But for some entry level roles and those positions requiring more knowledge and skills, you might feel they deserve a more substantial financial reward in the interests of fairness.
Paying More Can Increase Productivity
If you are in a position to pay more money for these positions, this could benefit you as an employer.
Done effectively, paying your staff more can increase productivity and actually reduce your costs rather than costing you more. And the benefit to your young staff is they will have a better financial compensation for their efforts, making them feel more valued and appreciated.
If you are in a position to pay above minimum wage to young people for entry level roles, you can create a culture where staff know you expect their best efforts for that more generous pay, thus increasing productivity.
Paying Staff Fairly Can Improve Recruitment
As an employer, you will be only too aware of the time and financial cost involved of hiring new staff.
If you pay your young staff fairly, you increase your chance of boosting your staff retention. Students who might be doing temporary jobs such as seasonal holiday work for you will more likely return to the company next time you need seasonal staff, saving you time and money. And you already know how they fit into your company’s culture.
If they are keen to come and do seasonal work for you again, that means they felt valued and appreciated the fact you were able to give fair wages. Any extra staff you need, those students and other young people are likely to tell their friends to apply for your roles.
When you do need to recruit, paying your existing staff fairly means they are more likely to talk positively about your company when they are talking about work with peers. For graduate roles, this could give you an advantage over other companies because it gives you a better chance of getting noticed by the best young talent out there.
Likewise, if you are offering Apprenticeships and you feel the position merits more pay than the Apprenticeship minimum wage, paying a bit more can demonstrate to your young Apprentices that you appreciate their efforts. They are also more likely to recommend you to other peers looking to apply for Apprenticeships.
Paying Staff Fairly Can Boost Your Customer Base
Valuing your staff by paying them fairly doesn’t only boost your reputation amongst existing staff and others who might be looking to apply for your roles.
When you have a happy, productive staff, that team are more likely to speak positiveşy about you as a company to their peers and parents. This, in turn, gives those people a good feeling about your company.
If you are offering a product or service, people are increasingly looking to make purchases from companies that they have a good feeling about for doing good in the community. An SME employer that pays its young staff fairly demonstrates to customers that you are not just out there to make money with little regard for staff and customers.
It’s The Right Thing To Do
If you are an employer with control over how much your staff are paid, your hands are not as tied as perhaps those employers at larger companies who work within a fixed company pay structure.
Being open with your staff about company turnover and the amount of financial reward you think is fair for the role they do will make your staff feel trusted and appreciated – and you can feel good about yourself that you are an employer who values your staff.
Doing the right thing can make your job much easier.
Even if you aren’t in a position to offer generous pay packages to your staff, profit related pay or bonuses for successful projects is still a moral way to reward your staff. A win-win situation where staff feel valued, too.
What Are The Effects of Salary On Job Satisfaction?
Whilst this can be a challenge for some SMEs, creating a fair financial package for your staff is essential if you want to be able to recruit the best talent and also retain that talent in the future.
SMEs can have a bit more flexibility than larger companies and even if you are unable to compete with larger companies when it comes to base salaries, you may be able to offer bonuses for projects that have gone well. Flexible working hours can also help to attract and retain staff as working from home means less money is needed for the work commute.
Having a workplace culture where staff feel they can raise issues with you about salaries and where you are open and realistic with them about what the company can genuinely afford can help to foster trust and build loyalty amongst your staff.
If your staff are respectful of the salary they are earning and how they can potentially increase it because of openness within the company, staff retention and productivity can be increased and this can drive your company forward.