The Real Value of Paying More for Top Talent

The Recruitment and Employment Confederation trade body recently published a report showing that British firms are upping salary offers for new permanent staff at the fastest rate in almost 17 years. The survey of 400 executive recruitment firms showed that 38% of their clients are offering higher salaries, the highest index reading since the survey started in October 1997.

Many companies find high salaries hard to swallow, but paying for top talent is worth the investment many times over.

Consider this example. Let’s say you have narrowed down the field for a vacant position at your company to two candidates.

Candidate A, is very exciting to you and could make a huge impact on your business. The cultural fit is ideal and the candidate seems eager deliver on your business goals. The salary would be £150K

Candidate B is competent and could add some value to the team. Their credentials tick all the boxes of what you’re looking for and they only require £110K. Choosing candidate B would leave you with £40K to deploy elsewhere in your business.

Assuming Candidate B delivers £110K worth of value to your business you are breaking even. However, if Candidate A delivers 5x or 50x their salary, you are way ahead, with an initial extra outlay of only £40K.

Added value could originate from the Candidate A’s initiative, passion, resourcefulness or personal and professional networks. While it’s easy focus on your savings by settling for a less expensive hire, the upside is that a top performer will far exceed the short-term cost difference. By paying a bit more for the best and brightest you’ll accelerate growth and ultimately win big

It is important to ensure you are competitive with the salary and benefits you are offering, otherwise you won’t be able to recruit the talented individuals you need into your business. Higher pay and better benefits generally attract better, more committed employees, who in-turn make more money for their company.