Employees are not the only ones wondering about this when negotiating their pay: bosses also have to do their homework to find out how much they should offer.
The salary that you offer when hiring an employee, or offer to your existing employees, must take several factors into account: the work entrusted to them, of course, but also the experience, skills, seniority, qualifications, geographical area, etc. Not to mention that these things vary from one occupation to another. One thing is certain: fixed pay cannot fall below the minimum threshold enforced by law. In Quebec, this threshold has just increased from $10.35 to $10.55 per hour, but it ranges between $10.20 and $11.00 in the other provinces.
Three ingredients for fair pay
Method
To determine what would constitute fair pay, you will need to be methodical. Make a list of the tasks which will be entrusted to the employee, as well as the skills and qualifications required for the position, and rank them in order of importance. The wording of the job description will help clarify this for you.
Scarcity
You will then have to rely on the principle of supply and demand: are there many candidates in the market? Or are the skills that you require difficult to find? We all know scarcity raises the price! To get an idea of the salary you should offer, do not hesitate to consult similar job offers from other companies who are looking for candidates with the same type of profile. You can also refer to compensation studies available online.
Internal factors
Internal factors should also be taken into account: your compensation plan must be consistent. It is out of the question to pay an employee with fewer responsibilities more than another, or, for the same position, to offer more to someone who has less seniority in your company… Establish a clear scale which weighs the specifics of each position.
Remember to consider the benefits that you provide for your employees: some are particularly attractive to employees from a financial point of view and could perhaps allow you to offer less in terms of a fixed salary without it meaning that they will be deprived.
In any case, plan a little room for manoeuvre when hiring: if you discover a real gem, it would be a shame to see them leave for a competitor over a difference of 3% between what you offer and what they ask for!