Industry and Geographic Issues

Employment practices vary widely based on industry and location. These differences have a significant impact on the hiring process and on the cost of having employees. Be prepared to offer a competitive employment package to hire and retain qualified employees. Consider, for example, the differences between a restaurant business and a software development company.

Compensation. In the construction industry, it's common for employees to be paid on an hourly basis, with the hourly rate dependent on the complexity or difficulty of the work to be performed. In software development, multiple employers frequently compete for programmers, driving up the salary levels that employees will expect and receive. These employees usually expect to be paid a salary, rather than an hourly rate.
Benefits. Prospective employees will have differing expectations regarding the type and level of benefits they will receive. Vacation and sick leave, health insurance, profit sharing and other retirement benefits are frequently more favorable in industries employing professionals as employees.
Work conditions and terms. Software companies are known for catering to unusual work habits, such as employees who prefer to work at the times they choose. Similarly, telecommuting is an option that can often be offered to programmers, but not to a carpenter who must be at the job site to perform the work.

Geography can also play a large part in determining what it will take to hire and keep good employees. First, the cost of basic essentials (food, housing, transportation) is much higher in some locations, particularly large urban areas, than in more rural settings. Second, employers within a single employment market will be competing for employees most directly with other local firms. This is tempered to some extent by the increasing mobility of the American workforce. Nevertheless, a business in, for example, Silicon Valley, will have to provide compensation, benefits and work conditions comparable to its local competitors.

What this means is that you must know what your competitors are offering to obtain employees. If your business doesn't or can't offer similar compensation and benefits, you may have a difficult time attracting the best available employees. Job ads are generally vague about compensation and benefits, but you can discuss the issue with employees, who probably have a better knowledge of the market for their specific job than you do. And, it's not unreasonable to respond to a competitor's ad to find out what they're offering.