A business is only as good as its people. But according to Hawaii Business’ 2018 BOSS survey, 78% of business leaders in Hawaii say finding good employees is a challenge.
In today’s job market, with unemployment at a staggeringly low 2.8%, employees have the upper hand when it comes to hiring. In order to attract the best employees, businesses must be willing to compensate them accordingly — or lose their top applicants to companies who will. This is especially true for neighbor island businesses, which have a smaller pool of applicants to choose from, may have to entice people from off island or risk more qualified individuals packing up and moving to Honolulu or the mainland.
Offering a competitive pay structure and benefits will give your business a leg up in hiring and retaining quality employees. However, developing a pay structure isn’t as simple as pulling numbers out of thin air. You can’t expect to fetch top talent in 2019 with a base salary you set back in 2009. Likewise, you can’t rely solely on websites like glassdoor.com or salary.com, which doesn’t take into account Hawaii’s cost of living and island culture.
When it comes to setting an appropriate base salary — one that isn’t too low or too high — current, localized salary data is your best friend. Look at what companies in your industry and on your island are paying for similar roles to get an idea of the position’s market rate. If your pay rates are below market, your organization may struggle to attract employees with the appropriate level of skills or experience needed to be productive. That may end up costing more over time if you need to train that employee, reprimand them constantly, or let them go and hire someone else.
Oftentimes, it pays to invest in an employee with a track record of efficiency or the skills you need to help you implement your growth strategy. Offering a higher salary to attract those employees will end up paying for itself.
Of course, your potential employees won’t just look at their base salary, they’ll also be influenced by the benefits you offer. Your overall compensation package is as much a reflection of your company as your products or services. When creating a compensation strategy, you can incorporate your business’s culture, mission and vision to set yourself apart as an employer and attract employees that are more likely to share those values.
For instance, if your company values flexibility and work-life balance, perks could include the ability to work from home, generous paid vacation, and paid maternity and paternity leave. If your company wants to encourage loyalty and longevity, you may set up a vesting schedule for 401(k) contributions and offer a vacation package when employees reach a milestone with the company.
Good employees are an investment in the future of your company. With the right compensation strategy, you can set a foundation for recruiting and retaining top employees that will pay off in the long run.
Cathy Keaulani is the manager of Surveys and Compensation Services at Hawaii Employers Council, a nonprofit, employer association offering HR resources, including compensation strategy services and valuable wage and benefits data, to more than 800 employers statewide.