What should I pay my new employee?

✅ Pay a similar or higher wage than your competitors

The first question I usually get asked in relation to this point is, how do I know what my competitors pay? There are lots of different ways to find this out. Typically the fastest and least expensive is to look at your competitor's current open job postings for the wage ranges they use. If you have friends in the industry who are comfortable sharing information with you about wage ranges, you can ask them to share that info with you. You can look at salary.com to see what information has been collected about employers near you. If you are looking for more comprehensive information you can find compensation reports tailored for your industry.


✅ Pay fairly in relation to the other positions in your company

When you are deciding on pay for your new employee, be sure that pay is fair in relation to other positions and people currently employed in your company. For example, you would not want typically want to hire a manager at a lower level of pay than their subordinate.


✅ Don't perpetuate unfair practices in pay, especially if they are typical in your industry

Perhaps through your research into discriminatory practices you have come to understand that some positions in your industry are typically underpaid related to other positions. Restaurants are notorious for paying kitchen staff far less than front of hours staff, for example. Don't perpetuate this difference. You may not feel like you can make changes right away. That is okay. Make it a goal of your organization to work on these unfair practices as you develop your strategy moving forward.


✅ Pay what you can afford

I have a few basic practices around pay in my business. I will not pay any contractor or employee less than $20 per hour. When I hire people who live outside of Santa Cruz to perform work, I pay them the same rate I would pay a local (typically much higher than their asking price). Why do I do this? Because there is no way anyone can afford to live in this town without making at least $20 per hour, and why should I exploit the work of someone who lives out of state or country for my benefit?


For the sustainability of your business it is important to pay what you can afford. Not all businesses can afford to pay $20 an hour. Many businesses just barely get by paying minimum wage. The essential thing is to ensure affordability while not exploiting your people.




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