Salaries, bonuses and pay reviews: how to get your figures right

Attracting – and keeping – good people means offering competitive salaries and bonuses, with regular pay reviews. You may be tempted to cut costs with lower salaries, but there are plenty of other agencies out there who won’t… and you get what you pay for.

Don’t just come up with an arbitrary figure though. A little research will go a long way to make sure you’re offering attractive and competitive terms.

First of all, I always recommend you gather as much data as you can to see how you compare with the industry in general and local competitors. You can also look at recruitment agency reports for specific salary roles. But beware! Agencies and client-side are very different in salary, so a head of SEO in one won’t be the same as in another. You need to compare like for like roles within agencies.

You can also benchmark on comparable responsibilities, such as managing staff or budgets, along with level of experience.

If your competitors are offering more, what do you do? Remember, people work at agencies for many reasons other than salary, so you could look at more creative ways to retain them. Perhaps increase the budget for socials or offer a good range of training and development packages. Create an open, enjoyable culture where people want to work. But be realistic and make sure salaries and benefits are fair and appealing. All the socials in the world won’t pay the bills.

It’s also a good idea to create bandings for salary, linked to experience, responsibilities and performance. No one wants to hit a ceiling. If you want your business to grow, the next role for each person should always be visible. Share this with your teams, so they know exactly what they need to do to progress, and what they can expect from the next step in their career within your company.

Keep pay reviews and performance separate

Alongside salary bandings, look at annual pay reviews in line with inflation, costs to the business and company profitability. Tempting as it is to link pay rises to performance, this can be too subjective. Who does what and when is very difficult to quantify. Instead, offer monthly and quarterly performance reviews where you look at possibilities for career progression and personal development.

Financial reward isn’t just in the shape of a salary. Some agencies offer a percentage annual bonus based on company profits. You can also link bonuses to role objectives and KPIs – but remember, performance isn’t always motivated by finance. You can offer other incentives, like a day off for their birthday, holiday vouchers, that kind of thing.

You can also offer rewards for new business brought in, or a successful referral for a job role. Think of other incentives which would work well within your company culture – employee of the month, annual awards – anything which can make people feel valued and appreciated.

Make sure the numbers add up

While it’s tempting to keep salary costs low, on the flip side it can also be tempting to offer large pay packets to keep your workforce with you. But you need to look carefully at the figures. How much will pay increases actually cost you, and how does this compare to previous years. If pay increases are offered outside pay reviews, why is this?

Creative agencies attract hugely talented people within all departments, and who all deserve to be well compensated for their hard work. But remember you’re running a commercial business. It’s all about balance. Offer too little and people take their talents elsewhere. Offer too much and you’ll start to flounder. But get it just right and you’ll have a harmonious, happy and productive workforce, as well as healthy figures each year.