{"id":3000065137,"date":"2022-11-01T11:34:00","date_gmt":"2022-11-01T15:34:00","guid":{"rendered":"https:\/\/www.wework.com\/ideas\/?p=3000065137"},"modified":"2022-11-01T16:20:33","modified_gmt":"2022-11-01T20:20:33","slug":"creative-compensation-solutions-for-small-businesses","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/business-solutions\/creative-compensation-solutions-for-small-businesses","title":{"rendered":"Creative compensation solutions for small businesses"},"content":{"rendered":"\n<p>Attracting and retaining <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/management-leadership\/the-talent-wars-new-table-stakes\">outstanding people<\/a> is never easy, but today\u2019s business environment complicates the challenge. The fallout of the COVID-19 pandemic\u2014including supply chain disruptions, a distributed workforce looking for both fair compensation and work-life balance, and an unstable geopolitical landscape\u2014have left medium-sized and small businesses (SMBs) scrambling.&nbsp;<\/p>\n\n\n<div data-block_63613d237c0d0 class=\"toc align toc-block\">\r\n      <div class=\"toc-block__heading\">in this story<\/div>\r\n  \r\n      <ul class=\"toc-block__list\">\r\n          <li class=\"toc-block__list-item\">\r\n        <a href=\"#set-a-realistic-budget\" class=\"toc-block__link\">\r\n          Set a realistic budget\r\n          <span class=\"toc-block__icon\">\r\n            <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n    <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n    <defs>\r\n        <filter 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  Solicit employee insight\r\n          <span class=\"toc-block__icon\">\r\n            <?xml version=\"1.0\" encoding=\"UTF-8\"?>\r\n<svg width=\"16px\" height=\"16px\" viewBox=\"0 0 16 16\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\r\n    <title>FD8B74A2-3372-42BA-99CD-BCC6C3C6EA13@1x<\/title>\r\n    <defs>\r\n        <filter id=\"filter-1\">\r\n            <feColorMatrix in=\"SourceGraphic\" type=\"matrix\" values=\"0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 0 0.000000 0 0 0 1.000000 0\"><\/feColorMatrix>\r\n        <\/filter>\r\n    <\/defs>\r\n    <g id=\"Iconography\" stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\">\r\n        <g id=\"icon\/arrow-down\/outline\/16\">\r\n            <rect id=\"Bounding-box\" x=\"0\" y=\"0\" width=\"16\" height=\"16\"><\/rect>\r\n            <g filter=\"url(#filter-1)\" id=\"Icon\">\r\n                <g transform=\"translate(7.500000, 8.000000) scale(-1, -1) 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SMBs need top talent to thrive, but they can\u2019t afford to get locked into compensation packages that become unmanageable when economic conditions change.&nbsp;<\/p>\n\n\n\n<p>Even with these complicating factors, there is a systematic approach for meeting the compensation challenge. 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href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/terms-of-service\\\" target=\\\"_blank\\\" style=\\\"font-size: 13.3333px;\\\">Terms of Service<\\\/a><span style=\\\"font-size: 13.3333px;\\\">&nbsp;and acknowledge our&nbsp;<\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/global-privacy-policy\\\" style=\\\"font-size: 13.3333px;\\\">Global Privacy Policy<\\\/a><span style=\\\"font-size: 13.3333px;\\\">.<\\\/span><br><\\\/p>\",\"container_class\":\"width 100\",\"element_class\":\"width 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our&nbsp;<\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/terms-of-service\\\" target=\\\"_blank\\\" style=\\\"font-size: 13.3333px;\\\">Terms of Service<\\\/a><span style=\\\"font-size: 13.3333px;\\\">&nbsp;and acknowledge our&nbsp;<\\\/span><a href=\\\"https:\\\/\\\/www.wework.com\\\/legal\\\/global-privacy-policy\\\" style=\\\"font-size: 13.3333px;\\\">Global Privacy Policy<\\\/a><span style=\\\"font-size: 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       <script id=\"nf-tmpl-cell\" type=\"text\/template\">\r\n            <nf-fields><\/nf-fields>\r\n        <\/script>\r\n\r\n        <script id=\"nf-tmpl-row\" type=\"text\/template\">\r\n            <nf-cells><\/nf-cells>\r\n        <\/script>\r\n\r\n        \n\n\n<h2  id=\"set-a-realistic-budget\"class=\"wp-block-heading\"><strong>Set a realistic budget<\/strong><\/h2>\n\n\n\n<p>Any compensation decision begins with a budgeting process to determine what your business can truly afford. It may help to understand that just because the consumer price index (CPI) is <a href=\"https:\/\/www.bls.gov\/charts\/consumer-price-index\/consumer-price-index-by-category-line-chart.htm\">up nearly 10 percent<\/a> doesn\u2019t mean wages follow in lockstep. A survey of employers by Salary.com shows that most U.S. organizations (73 percent) are targeting a <a href=\"https:\/\/www.salary.com\/blog\/pay-raises-are-coming\/\">payroll budget increase of 4 percent<\/a> or more this year, and a plurality of organizations (43 percent) are growing their salary merit-increase budgets by 5 percent or more. Those increases may be a response to inflation, but they are only roughly half of the CPI increase.&nbsp;<\/p>\n\n\n\n<p>The numbers are also a reminder that you may not want to solely use merit increases as a response to inflation. Instead, consider a business-friendly strategy that can help employees, such as quarterly bonuses tied to quantifiable results.&nbsp;&nbsp;<\/p>\n\n\n\n<h2  id=\"assess-trends-by-role\"class=\"wp-block-heading\"><strong>Assess trends by role<\/strong><\/h2>\n\n\n\n<p>Once you know what you can afford, assess wage inflation trends by job level, geography, and industry. Knowing which roles or demographic groups are in highest demand in your industry and region can clarify who is most likely to need a compensation bump. Note that some demand may persist beyond the current crunch, as some experts predict that fewer young workers coming into the labor market combined with low levels of immigration will <a href=\"https:\/\/www.cnn.com\/2022\/07\/14\/success\/pay-raises-inflation\/index.html\">create a shortage<\/a>.&nbsp;<\/p>\n\n\n\n<h2  id=\"factor-in-geographic-differences\"class=\"wp-block-heading\"><strong>Factor in geographic differences<\/strong><\/h2>\n\n\n\n<p>As more people begin to work remotely, there may be market-driven pay variations between geographic locations. The most obvious is the difference between highly populated and more remote areas, but compensation can also vary state by state or county by county.&nbsp;<\/p>\n\n\n\n<p>Salary survey data can help you provide equitable compensation across labor markets. In fact, it\u2019s important to put your company\u2019s compensation budgeting in the context of market data. Regional pay studies, combined with an internal analysis of your company\u2019s pay scales, may reveal which jobs in your company could benefit from a pay adjustment.&nbsp;<\/p>\n\n\n\n<p>As you consider these geographic pay differences, assess what roles must remain in a central office in a more expensive location. For people in those roles, clear communication about the reasoning is essential for keeping these employees engaged.&nbsp;<\/p>\n\n\n\n<h2  id=\"change-the-baseline-for-new-hires\"class=\"wp-block-heading\"><strong>Change the baseline for new hires<\/strong><\/h2>\n\n\n\n<p>It\u2019s best practice not to reduce compensation for existing employees, as you\u2019re paying for their work and value, not where they sit. But for new hires in less expensive markets, regional baseline data on competitive pay is an opportunity to provide equitable compensation at lower cost. Also consider cost-effective benefits you can offer to sweeten the deal, such as giving remote workers access to a <a href=\"https:\/\/www.wework.com\/solutions\">WeWork office space<\/a>.<\/p>\n\n\n\n<p>For existing employees in markets that have become more expensive, proactive analyses will help you understand the extent to which you need to make a market adjustment\u2014and avoid the problem of having to scramble if key employees leave.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h2  id=\"solicit-employee-insight\"class=\"wp-block-heading\"><strong>Solicit employee insight<\/strong><\/h2>\n\n\n\n<p>Use an annual anonymous <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/business-solutions\/employee-engagement-surveys-and-why-they-matter\">employee engagement survey<\/a> to gauge sentiment on compensation, benefits, and overall employment satisfaction. By asking employees if they believe they are fairly compensated and whether they believe the work they do is important to organizational success, for example, you\u2019ll gain insight into what is working well and what improvements\u2014to compensation and beyond\u2014could keep employees motivated and engaged.&nbsp;<\/p>\n\n\n\n<p>These best practices\u2014internal budget analysis, regional data and analyses, and employee input\u2014position you to understand where and how you should offer targeted increases.&nbsp;<\/p>\n\n\n\n<p>In most cases, you should take a segmented approach:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Provide higher wages to new and high-performing staff in critical business segments if those people are underpaid.&nbsp;<\/li><li>Prioritize people you can\u2019t afford to lose and those who have lost ground, compensation-wise, to newer employees operating in the same role.<\/li><li>Use HR metrics like \u201cyears since promotion\u201d to uncover people at risk of leaving.<\/li><li>Bring underpaid staff to the proper market rate, or even slightly above.&nbsp;<\/li><\/ul>\n\n\n\n<p>In the end, remember that attracting, retaining, and engaging the right people involves more than just salary and benefits. It\u2019s especially important in the current environment to infuse <a href=\"https:\/\/www.wework.com\/ideas\/professional-development\/business-solutions\/best-mission-statement-examples\">purpose and meaning<\/a> into what your company is doing and the responsibilities of each employee; invest in personal and professional growth through training and mentorship programs; and advance diversity, equity, and inclusion.<\/p>\n\n\n<div class=\"related-articles-sticky related-articles-sticky--sticky-on-desktop\">\r\n        <div class=\"related-articles-sticky__holder\">\r\n            <div class=\"ray-grid\">\r\n                <div class=\"ray-grid__cell--span-full\">\r\n                    <div class=\"related-articles-sticky__header-wrapper\">\r\n                        <h3 class=\"ray-text--h3 related-articles-sticky__block-title\">\r\n                            Related articles\r\n                        <\/h3>\r\n                    <\/div>\r\n                    <div class=\"related-articles-sticky__wrapper\">\r\n                        \r\n                            <div class=\"related-articles-sticky__item\">\r\n                                <div class=\"related-articles-sticky__image-wrapper\">\r\n                                    <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/case-study-scaling-a-frozen-fruit-empire-with-wework-all-access\" class=\"ray-image ray-image--1by1\">\r\n                                        <img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"760\" height=\"428\" src=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/02\/Rectangle-12.png?resize=760%2C428\" class=\"related-articles-sticky__image\" alt=\"case study\" srcset=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/02\/Rectangle-12.png?w=760 760w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2026\/02\/Rectangle-12.png?w=400 400w\" sizes=\"auto, (max-width: 760px) 100vw, 760px\" \/>\r\n                                    <\/a>\r\n                                <\/div>\r\n                                <div class=\"related-articles-sticky__container\">\r\n                                    <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/case-study-scaling-a-frozen-fruit-empire-with-wework-all-access\">\r\n                                        <div class=\"related-articles-sticky__caption-title\">\r\n                                            Case Study: Scaling a Frozen Fruit Empire with WeWork All Access\r\n                                        <\/div>\r\n\r\n                                        <div class=\"author\">\r\n    By\r\n    WeWork\r\n  <\/div>\r\n                                    <\/a>\r\n                                <\/div>\r\n                            <\/div>\r\n                        \r\n                            <div class=\"related-articles-sticky__item\">\r\n                                <div class=\"related-articles-sticky__image-wrapper\">\r\n                                    <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/the-real-cost-of-office-space-a-budgeting-guide-for-small-teams\" class=\"ray-image ray-image--1by1\">\r\n                                        <img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"2749\" height=\"1832\" src=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?resize=2749%2C1832\" class=\"related-articles-sticky__image\" alt=\"WeWork\" srcset=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?w=2749 2749w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?w=1536 1536w, https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/10\/Web_150DPI-WeWork_People_Activation_Photo_02_031925_add66c.jpg?w=2048 2048w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/>\r\n                                    <\/a>\r\n                                <\/div>\r\n                                <div class=\"related-articles-sticky__container\">\r\n                                    <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/the-real-cost-of-office-space-a-budgeting-guide-for-small-teams\">\r\n                                        <div class=\"related-articles-sticky__caption-title\">\r\n                                            The Real Cost of Office Space: A Budgeting Guide for Small Teams\u00a0\r\n                                        <\/div>\r\n\r\n                                        <div class=\"author\">\r\n    By\r\n    WeWork\r\n  <\/div>\r\n                                    <\/a>\r\n                                <\/div>\r\n                            <\/div>\r\n                        \r\n                            <div class=\"related-articles-sticky__item\">\r\n                                <div class=\"related-articles-sticky__image-wrapper\">\r\n                                    <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/how-a-freight-rail-technology-company-used-flexible-spaces-to-scale-up-and-connect-with-customers-and-employees-across-the-country\" class=\"ray-image ray-image--1by1\">\r\n                                        <img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"991\" height=\"659\" src=\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2025\/06\/Screenshot-2025-06-24-at-12.44.34\u202fPM.png?resize=991%2C659\" class=\"related-articles-sticky__image\" alt=\"Case study\" \/>\r\n                                    <\/a>\r\n                                <\/div>\r\n                                <div class=\"related-articles-sticky__container\">\r\n                                    <a href=\"https:\/\/www.wework.com\/ideas\/workspace-solutions\/how-a-freight-rail-technology-company-used-flexible-spaces-to-scale-up-and-connect-with-customers-and-employees-across-the-country\">\r\n                                        <div class=\"related-articles-sticky__caption-title\">\r\n                                            How a freight rail technology company scaled up and connected across the country\r\n                                        <\/div>\r\n\r\n                                        <div class=\"author\">\r\n    By\r\n    WeWork\r\n  <\/div>\r\n                                    <\/a>\r\n                                <\/div>\r\n                            <\/div>\r\n                                            <\/div>\r\n                <\/div>\r\n            <\/div>\r\n        <\/div>\r\n    <\/div>\r\n\n\n\n<p>Ultimately, there are no bargains when it comes to compensation. Because people are the heart of every business, compensating them fairly and keeping them fully engaged are essential. When you are fair to your people in the context of what is possible for your business, everyone wins.<\/p>\n\n\n\n<p><em>Kristine Gunn is the executive director, talent and org management at TriNet, where she leads a team of HR and organizational strategy consultants that help businesses grow and scale by unlocking the potential of their people.<\/em><\/p>\n\n\n<div\r\n  data-block_63189e35bd66a\r\n  class=\"sticky-cta align sticky-cta--bottom sticky-cta--default--bottom sticky-cta--right sticky-cta--default\"\r\n>\r\n  <div class=\"sticky-cta__copy sticky-cta--default__copy\">\r\n    <p>Want to learn more about flexible work?<\/p>\n\r\n  <\/div>\r\n\r\n  <div class=\"sticky-cta__button-wrap sticky-cta--default__button\">\r\n    <button class=\"ray-button ray-button--primary sticky-cta__button\">\r\n      <a\r\n        href=\"#nf-form-31-cont\"\r\n        class=\"sticky-cta__link sticky-cta--default__link\">\r\n        Get in touch\r\n      <\/a>\r\n    <\/button>\r\n  <\/div>\r\n<\/div>\r\n","protected":false},"excerpt":{"rendered":"<p>Here are some best practices for cost-effective hiring and retention, no matter what happens in the world<\/p>\n","protected":false},"author":2236,"featured_media":3000065143,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"template-single-default.blade.php","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43910,43902],"tags":[1488,39218,43896],"class_list":["post-3000065137","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-solutions","category-professional-development","tag-management","tag-small-businesses","tag-talent-and-retention"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v25.3.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Creative compensation solutions for small 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