Hiring is a competitive process, and small businesses often struggle to attract top talent due to their tight budgets. If your business is looking to scale up, hire for key positions, or improve employee retention, you need to rethink your compensation strategy.

While wages are a core part of competitive compensation offers, small organizations can offer a range of other benefits to secure high-quality candidates. If this guide, we’ll help you reassess your HR and compensation practices to create a compensation strategy that leverages your organization’s resources to offer in-demand perks and benefits.

Consider organization priorities.

When crafting your compensation policy, consider what resources your business has available to give to staff. Get your finances in order and calculate the potential return on investment for various positions to determine how much your business is able to offer in wages.

This also applies to your benefits. In addition to your resources, take your company values and employee preferences into account when creating compensation packages. For example, if your business has company values related to health and safety, you might implement a wellness program. Or, if many employees have voiced an interest in furthering their careers, you might explore expanding your workplace training programs.

Conduct compensation benchmarking.

To create a winning compensation strategy, you need to know the current compensation rates for your target position. Even when crafting a holistic compensation strategy that offers extensive benefits outside of wages, eCardWidget’s employee motivation guide points out that salaries far below market value will undermine other motivators.

Discover what the rest of your market is doing by conducting compensation benchmarking. This process involves:

  • Identifying positions to benchmark. Decide what positions at your organization require benchmarking reports. For example, you might choose a specialized role, a new position, or a role experiencing excessive turnover.
  • Leveraging trust, relevant data. When gathering data, ensure you are gaining reports on organizations that share your business’s size, industry, and geographic area. Additionally, use secure, up-to-date sources to get accurate data.
  • Making strategic, data-backed decisions. After completing compensation benchmarking, how you use the data is ultimately up to your organization. Some businesses may choose to strictly follow market averages, whereas others might know they need to offer lower pay to maintain their budgets and instead improve their offers with perks.

However, this doesn’t mean that salaries are the only thing to focus on when conducting compensation benchmarking. When assessing other organizations, also consider what perks and benefits they offer. Is one company known for treating employees well? Does another have an extensive wellness program? Investigate these and other perks to determine how your organization can keep its compensation competitive.

Create a Total Rewards compensation strategy.

Once you know the target positions you’re hiring for and the typical compensation packages for these roles, it’s time to craft your own offer packages. Even if your business can’t compete when it comes to wage amounts, you can still attract top talent by taking a Total Rewards approach.

Total Rewards compensation is a strategy that emphasizes the value of perks and benefits to create a holistic offer. For example, your business might have lower base pay than competitors but a better work culture that current employees are proud to champion.

A few key, low-cost perks you can include in your Total Rewards packages are:

  • Wellness programs. Burnout is a major struggle for many employees. When your business is committed to employee health, you will cultivate a reliable, loyal workforce. Explore wellness programs related to both physical and mental health to meet all of your employees’ needs. For example, your organization can provide free access to mindfulness and step-counter apps, offer counseling services, or reimburse employees for health-related expenses.
  • Flexible work schedules. Letting employees decide when they want to work—as long as they get their work done—can be a decisive factor for independent candidates with busy personal schedules. For example, you might allow employees to reallocate a few hours in the morning for later in the day, so parents can get kids ready for school and daycare.
  • Hybrid work options. Hybrid work is a highly in-demand benefit, and businesses that can support remote employees should consider offering it. When creating a hybrid work system, consider how you can stay connected to remote employees, so they stay on the same page as the rest of your team, get proper recognition for their work, and feel like a part of the team.
  • Professional development support. ProspectHR’s guide to employee coaching emphasizes how investing in professional development programs “creates a culture where people feel valued, supported, and empowered to do their best work.” When your business pitches itself as an organization that is willing to professionally support employees, you can attract talented new hires who are just in need of a little training.
  • Corporate social responsibility programs. Many employees want to work with employers who share their values. Establish strong corporate social responsibility principles and stick to them to attract socially minded candidates. For example, you might organize employee volunteer days, help promote local nonprofits, or even create an employee giving program like payroll giving or matching gifts.

When creating a Total Rewards program, do your best to determine the overall value of your compensation packages. While some intangible elements—such as a strong work culture—may be hard to quantify, you can still compare how they measure up to similar businesses’ offerings to stay competitive. For example, you may not offer as much PTO as a competitor, but provide more flexible work schedules.


Compensation is multifaceted and includes more than just salaries. If your business is struggling when it comes to offering competitive compensation, consider the benefits and perks you can provide, whether it’s a wellness program, an unbeatable work culture, or strong values that resonate with your team.