Looking to attract top talent to your small business in 2015? Then it may be time to raise wages–or to more aggressively promote the other reasons your firm is great place to work.
Research released earlier this month by the job board Monster and the WageIndicator Foundation, found that large employers pay employees roughly twice the rates of small firms. The WageIndicator Foundation looks at wages in 80 countries relative to factors such as the cost of living.
The average hourly wage at small firms with 10 employees or less—the vast majority of small firms—is $14 per hour. That compares to $30 per hour for big businesses with more than 5,000 employees.
Why can big firms pay so much more? “Bigger companies have more access to capital,” says Martin Kahanec, visiting research fellow at Harvard University’s Labor and Worklife Program and scientific director at the Central European Labour Studies Institute in Bratislava, Slovakia, which hosts an office of the WageIndicator Foundation. Greater access to financing gives large corporations greater ability to invest in tools and training that makes their teams more productive, he says.
Interestingly, no matter how much employees make, the majority tend to be dissatisfied. Just under 45% of U.S. workers are happy with their pay. With unemployment declining, this low satisfaction rate could put pressure on companies of all sizes to raise wages.
“Companies might find themselves in a situation where they either pay a little higher wages or face a less happy labor force,” says Kahanec.
One likely contributing factor to the dissatisfaction, says Kahanec, is that the cost of essentials has risen for consumers, and they may feel their wages are not keeping up. “In the U.S. consumer price and food prices have risen a little faster than before,” he says.
So how can small firms compete with bigger firms for talent?
Finding a way to give raises that help employees keep pace with the cost of living is probably most important, given that nearly 71% of executives surveyed by the leadership and talent consultancy Korn Ferry plan to increase staff salaries in 2015. If your revenues and profits are not increasing enough to allow this, working with a coach or consultant may help you find ways to improve the situation, so you can reward your team more for their contributions.
The study suggests another possible strategy. Nearly 78% of workers in Monster’s survey said they are relatively satisfied with the relationships they have with colleagues. Clearly, employees do notice it if their company culture is a positive one. So, if your team is happy, don’t be shy about touting it, whether in your job postings, in videos on your website and anywhere else that potential hires are likely to get exposed to your company.
Monster.com recommends fostering a “collaborative and comfortable work environment” and rewarding your team for high performance with extra vacation days when you can. Work-life balance is one area where giant firms often can’t compete with smaller rivals. With quality of life is becoming more important to many employees, offering a healthy work environment with reasonable hours can go a long way in attracting great people.
This article was written by Elaine Pofeldt from Forbes and was legally licensed through the NewsCred publisher network.