What You Need To Know
First, you need to understand the factors that determine the rate of pay:
- Level of responsibility.
- Education and years of experience.
- The going rate for this job in this sector (locally, provincially, regionally).
- Your business’ compensation strategy (stay in line with others, pay more to attract more qualified workers, pay less because you are not able to be as competitive, etc.)
Why You Need To Know
To recruit and keep the best talent, you need to know the going rate for this job in the industry or location of your business. You also need to factor in the level of education, experience, and responsibility the position requires. You also need to factor in what other people in your company are being paid for doing similar work.
What You Need To Do
Review the going rate at least once per year. Keep your pay relatively in line with others in your industry. Formal salary survey information is available for purchase from different companies. You may also want to check:
- Job postings in your industry and area.
- Industry associations to see if they have recent information or research on compensation for your industry or job category.
- Ask other business owners.
The Government of Canada Job Bank website allows you to search compensation details provincially or nationally.
Another consideration is to develop a formal Salary Grid. The grid outlines the pay levels for different positions and pay increases in steps for each position. For example, the schedule may show starting pay, midpoint pay, and the upper range of pay. As a small-to-medium provincially regulated employer, you are not required to have this. Remember that you should not discriminate pay decisions on any of the protected grounds defined by the Human Rights Act.
You can also choose from (or combine) different compensation strategies:
- Competitive compensation: pay is similar to that of other workers in the industry or area.
- Retention-based compensation: higher pay for longer service, with longevity bonuses at certain anniversaries.
- Performance-based compensation: pay increases are based on how well they (or their team) do their work.
