Compensation, pay, wages… whatever you call it, is complex. There’s a lot you should know before you offer salaries and grant raises. Employee compensation has a huge effect on your employees and every department at your company, specifically the following three.

Finance

When it comes to finance, here’s the bottom line: paying more money can often mean making more money—and provide your business with greater financial flexibility. Competitive pay helps you not only attract top-tier talent, but also retain that same talent. This saves you a bundle of money, because replacing lost employees (namely, recruiting, hiring and training them) is an expensive ordeal.

Human Resources

According to the Future Workplace, 41% of employees list unfair compensation as their reason for feeling burned out. And you don’t want burned out employees—that’s the beginning of the end. In fact, one new employee compensation technique is paying for potential, instead of performance. Your HR department has quite a bit to consider regarding the psychology of pay.

Legal

Beyond optional compensation strategies, there are mandatory requirements. Yes, there are federal and state minimum wage laws, but there are also factors such as the Equal & Fair Pay Act and the Prior Pay laws. You can actually break many laws if you’re not paying the right way, or even handling negotiations the right way.

Now, tools like our Salary Guides and wages-retention calculator help you determine pay, but this white paper helps you see the entire picture. Get your copy for an in-depth breakdown and action items!

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