Are You Paying Your Employees Enough?

[Fit Small Business | ]( HR Insights from Our Experts [Read new articles from our HR experts]( It’s customary to give out pay raises at least annually, but how would you know if you’re paying employees enough or too much? According to the Federal Reserve Bank of Atlanta’s Wage Growth Tracker, [employee pay has been trending upward]( since last year—up 6.4% in November 2022 year over year. Some employers are considering cost of living increases as workers continue to deal with inflation. But how much is too much, and do you know how your company fares when it comes to paying competitive salaries? (TLTR) Too long to read? If you’re pressed for time, just check out these articles: [Salary Comparison Tools]( [Compa Ratio]( [Salary vs Hourly vs Commission]( [Types of Employee Benefits]( [Minimum Wage Exemptions]( [How to Create a Payroll Budget](   [Image of remote office work]( Performing Salary and Wage Assessments   The first step to determining how well your employees are paid is to look at market rates for the same or similar positions. This is a good time to do that since it’s the beginning of the year. You can pull fresh data from sites like the [Bureau of Labor Statistics](, [Indeed](, and even [ZipRecruiter](. If you notice any major differences when comparing to the average wages you pay, take some time to figure out why. We don’t recommend decreasing employee pay if you find the wages you’re paying are significantly higher than other companies are paying, because that can lower employee morale; instead, you can consider restructuring positions and their corresponding job descriptions. On the other hand, increasing employee wages that are significantly lower than market rates is a good idea if your budget allows, even if you need to gradually do so. 📌 Use one of our top recommended [salary comparison tools]( to see how competitive your wages are.   [Illustration of searching for remote work]( Competitive Wages for Remote Workers   Remote employees are a growing group of workers shaking up the way employers think about processes like deciding how much to pay in wages. According to Hired’s 2022 State of Tech Salaries report, [remote workers earn more]( than local in-office employees in 15 out of 17 global markets. And per a study by Gusto, remote workers in the professional services industry tend to [earn 17% to 58% more than non-remote workers]( in the same industry. But should they? Some HR teams are considering if location should impact how much remote employees are paid. For instance, should workers in California be paid more than workers who perform the same work in Arkansas to account for the higher cost of living? There’s a lot to think about if you want to factor that into employee wages; a sense of unfairness can develop and decrease employee morale, so you have to approach the issue carefully. 📌 One way to put money back into your employees’ pockets is to [offer benefits](. Check out the four most common employee benefits to consider.   [compliance illustration]( Widespread Minimum Wage Increases   More than 50% of US states are set to [increase their minimum wage in 2023](. However, because wages as a whole are rising, especially for low-income workers, the workforce may not really feel the effects. Many restaurants, retailers, and hospitality businesses are experiencing labor shortages and have to pay higher wages to even attract candidates; some have even resorted to paying sign-on bonuses. If you usually stick to minimum wage when setting pay rates for employees, we encourage you to compare it with what candidates are receiving in the market. Applicants have more options these days as gig work becomes more popular and companies overall are paying more, so you may struggle to recruit and retain quality employees if you’re only paying the legally required wage rate. 📌There are some worker types and industries that are exempt from minimum wage laws. Check out our [guide on minimum wage exemptions](.   HR Payroll Software and Services Spotlight [Image ofTeramind UI]( This week’s payroll software spotlight is on QuickBooks Payroll. It’s one of our top recommended payroll services and part of an established suite of financial software products that integrate to save you time and effort. If you’re a QuickBooks user already, adding the payroll product is a no-brainer. You’ll access it from the dashboard you already use, and all of your information will easily transfer to the different module(s). Some features users really like are: - Quick direct deposit: You can pay employees as fast as the same day - Tax-penalty protection: Any penalties up to $25,000 will be covered by QuickBooks, even if you make the error (only available with premium plan purchase, though) - Unlimited pay runs: Run payroll as many times as you like at no extra charge - Partner program for accountants: Includes discounts accountants can pass to their clients 📌If you need a lot of HR support in addition to being able to pay your employees, consider other [payroll services](, since QuickBooks Payroll is limited in the HR features it provides.   What’s Hot In HR Content This Week Here’s some of our latest (and greatest) HR content [Featured Article] State Payroll Directory Deciding how much to pay your employees is a tough decision, but one of many when it comes to handling HR and payroll for your company. You’ll need to decide the best ways to pay them, calculate the right amount of taxes to withhold, etc. And local, state, and federal laws can all affect your options. Find your state in our state payroll directory, and learn more about doing payroll. [Read More](   Top HR Template for the Week Payroll Budget Template [Image ofTeramind UI]( Budgeting for payroll costs requires you to consider more than just what you plan to pay employees. Payments for taxes, benefits contributions, and even overtime can be projected with a little planning. Download our payroll budget template to help project your payroll expenses for the next 12 months. [Download the Payroll Budget Template Now](   Our Expert Advice on Paying Employees Fairly   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert] “In addition to considering wage rates in the market and any minimum wage requirements, you should also evaluate how valuable each position is to your company. How much additional revenue do you project to earn as a result of that position in particular? What about less tangible benefits, like an increase in team morale? An employee’s credentials might also make them eligible for higher pay. For instance, if they have specialized degrees or certificates, years of experience, etc. Knowing how much to pay your workers isn’t always cut and dried, so I recommend taking your time to really evaluate all relevant factors.” -Charlette Beasley, HR and Payroll Expert   Best wishes, Charlette Beasley, HR and Payroll Expert   For more quality resources on growing your small business: [Marketing]( | [Financing]( | [Accounting]( | [HR]( | [Retail]( | [Ecommerce]( | [Sales]( [Facebook]( [Twitter]( [LinkedIn]( [Alternate text] Want to change what you receive in your inbox? [Update Your Preferences]( [Image]   We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Our business model allows us to bring you the best answers to your questions, without editorial biases or cluttering the site with banner ads that everyone hates. The solutions we recommend to business owners often include products and services. Our expert team of writers make recommendations in our buyer’s guides and reviews based on independent quantitative and qualitative assessments. To maintain editorial independence from our business operations, our writers and editors always have the final say on whether a partner is included anywhere on our site. [Read our editorial policy here](. When a product or service is included in an article or an email, we sometimes earn a fee or a commission from the advertising partner based on readers’ actions. Learn more about [how we make money]( and see a list of [our full list of partners](.   This message was meant for: {EMAIL} Our HQ: Fit Small Business - 355 Lexington Ave, 18th Floor, New York, NY 10017, United States Want to give feedback? Reply to this email! We monitor it daily. This helps us make your subscriber experience better. Want to change the content you're receiving? [Update your preferences](. Want to stop receiving emails all together? [Unsubscribe](.