Compensation strategy is one of the biggest and most obvious functions of an employment contract. It's also one of the most strategic parts of people ops.
However, it's one of the trickiest and most important to get right, especially in smaller companies.
Why? Well first, smaller businesses don't often have the same cash troves that big businesses have. The big guys can buy recruiters and better ad positions in job listing forums, and they can afford better salary and benefit packages. And second, someone's pay ends up being an explicit value contract between the employee and employer, one that employees are reminded of each time they see their paycheck. Because smaller companies often offer smaller wages relative to big companies, they risk being seen as underpaying their staff. Underpaying employees risks making them feel underappreciated, which can be disastrous.
To compete with big firms, and to avoid underpaying employees, small companies must “think beyond the paycheck.” This means getting more clever about what's included in a total compensation package. They must think about the obvious benefits like health benefits, flex benefits, and equity. But they must also come up with benefits of perks unique to their business that keeps their company competitive in talent pools. Coming up with perks that meet talent market needs is hard, even before formalizing the program. First you have to come up with the solution (can you offer a local bus pass or access ...