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Working out what to pay your staff

Working out what to pay your staff
Thursday, April 05, 2018

After months or even years of grafting alone to get your business off the ground, once you’re finally in a position to take on your first employee, this is a big milestone.

 

Employing new members of staff brings fresh points of view and unique skillsets to your company. However, it also carries a great deal of responsibility. As a first-time employer, you will have a lot of difficult decisions to make – even before any interviews take place.

 

Pay is arguably one of the top most important aspects underpinning an employer/employee relationship, so getting this right early on is crucial. Too little and staff will feel undervalued and unmotivated. Too high and your profits will suffer. Finding a happy medium that works for everyone is tough.

 

To help you on your first steps to becoming an employer, the team here at Panthera is pleased to present our essential guide to working out the right pay for your new member of staff.

 

1. Establish what it is you’re looking for

 

What exactly are you wanting to hire someone to do? How much value will they add to the company?

 

A good way to assess the value an employee would bring to your company would be by considering how much time or money you are currently taking on the tasks they perform. If hours of your week are taken up on the phone to a IT support line, or simply trying to figure a problem out for yourself, an IT specialist could be extremely value to your company as this will free up time to make more sales.

 

You may also wish to look at the profit potential of a particular role within your company when working out the employee’s salary. A salesperson’s wages, for example, could be calculated based on you’re the revenue they bring into the business.

 

Not only does doing this mean you are able to see the real value of an employee but you can also see whether they are delivering a return on their wage. It is also possible that, in the end, you realise it is not necessary or financially viable to hire anyone at all at the moment.

 

2. Research is key

 

Once you know what you’re looking for and how valuable the employee will be within your business, you can start thinking about what to pay them. When in doubt about the salary should be for your employee, try to find out what they would be earning elsewhere in a similar role.

 

Many new employers make the mistake of thinking that the competitive workplace means any employee would be happy to work for them. Whilst this may be true to some extent, it is important to remember that, when looking for skilled and experienced staff, you are in deep competition with other employers.

 

Glassdoor and Payscale are both extremely helpful resources that can help you get a better sense of the other offers your interviewees may be getting elsewhere.

 

3. Consider other costs

 

Of course, it is also important to remember that your employee’s wages are not your only expense. You’ll need to factor in employers’ National Insurance Contributions, pensions, and other potential costs such as travel expenses or training.

 

And, before you even hire the employee, there are things to consider. Finding potential candidates can be extremely time consuming if you do not have a designated hiring manager – there’s also many hours you will spend interviewing prospects.

 

Advertising your vacancy will also load on more costs to the hiring with some online job sites charging £5 per day or that the advert is up, in addition to the initial sign-up.

 

4. Stay flexible

 

Although it can be an awkward topic for some, you should be prepared for when an employee inevitably enquires about their salary or tries to negotiate a higher rate. Be flexible during these meetings whenever you can, as even meeting the employee halfway can have a significant impact on staff loyalty and productivity.

 

Happy staff are profitable staff (most of the time) so making sure employees feel valued in their role is an essential part of running your business. If employees are continuously performing exceptional work, increasing wages, when it’s possible, is a great way to show them that their effort is appreciated.

 

5. Follow the rules

 

As a first-time employer, it is important that you start as you mean to go on. From the moment you take on your first member of staff, make sure you follow all current policies and legislation with regard to minimum wages, equal pay, and pension provision. Make sure that you give every employee a written payslip either on or before their payday for their records detailing the deductions you’ve made.

 

For further advice on the accounting implications of hiring staff, speak to your accountant today on 01235 768 561 or at enquiries@pantheraaccounting.com.

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For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

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The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

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We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

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An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

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Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker BKR Solutions
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I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
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Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
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Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
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Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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