by Laleh Hassibi, PayScale.com
For the first time since the
inception of The PayScale Index, small business wages are growing faster than
their medium and large-sized business counterparts. This little but important
fact has many sitting up and taking notice. Business Insider published an
article about this fact noting that, “historically
large companies experienced larger pay increases, however over the last two
quarters this has switched.”
Small
business highlights from The PayScale Index
- Wages in
Q3 2012 grew by 1.5 percent for small companies compared to only 1.1 percent
for large companies. - This
strong quarterly growth pushed small companies to the top for annual wage
growth (3.7 percent vs. 2.4 percent for medium companies and 2.9 percent for
large companies). - However,
even with this strong performance, wage growth since 2006 for small companies
still lags behind large companies, but it is catching up with medium companies.
Cruising
at the Speed of Business
According to Katie Bardaro, PayScale’s lead
economist, this is most likely a sign of change in the economy since small
companies tend to show trends faster. “Small companies don’t have a corporate
HR structure that people have to go through for hiring, so they’re a lot faster
moving. So if they’re having wage increases that’s an encouraging sign that
they’ll hopefully spread out to the larger and medium sized companies as well,”
Bardaro said.
Don’t Risk Losing Key Talent
Hopefully this revelation from The PayScale Index has our small
business friends paying attention because retaining talented employees has just
gotten a bit more challenging. Simply having free chips and soda in your company
kitchen and a ping-pong table won’t be enough to cut it now. It’s going to be
crucial to get pay right in order to get and keep key people.
It’s almost more important to get salaries right if you’re on the smaller end of the business scale. If talent leaves, your business will take a big hit. We’re talking
missed deliverables, unmet deadlines, lost sales, etc. In a smaller company
each talented employee is incrementally more valuable. You have to compete for
talent with the big guys, and that often means paying wages that are comparable
to what they’re offering.
Take a cruise through the interactive index to learn more about
the current trends in wage growth, or download a free index report to find
out what’s happening in your location or industry.
Is your small company keeping up with these latest trends? What
are you doing to be competitive in the talent wars?
More than 2,300 organizations use PayScale’s subscription software to:
- Attract talent. Price jobs based on accurate market data.
- Retain employees. Get pay right and show them how you did it. Your employees will be more satisfied to stay.
- Drive performance. Get their salary right so they can focus on doing a good job.
- Be confident. With know-how to talk about comp with anyone.
What are you waiting for?
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