Why do startups pay more in salary than an established competitor?

[jay]

Of course, one must have awareness, knowledge, patience and constancy. Things in a venture must be progressive and not to desire them immediately or "force" them as you describe because in this way, generally, the results are negative.

If you come major banks in my country now, they hire people with lower certificate in order to pay them less than they pay those with their Master's degree.

 

[Good-Person]

I think it is a good idea to offer lucrative salary package when you start a business because this will attract talented and serious people. When you get paid a good amount of money to people, they take the job seriously.

 

[Abigael]

Startups usually pay more salary to its workers for sure. I guess it is because they still have so much money and also, they need to impress workers so as to attract the most skilled ones. That is such a good strategy in getting good workers in competitive markets.

 

[Justin]

where did you get this idea that a start up will pay more in salary than the established business? The start ups I don't even pay full scale salary to is employees.

 

[Trexxxy]

I'm curious as to how you came about this assertion, is there a statistic backing this? I think that the established companies will be in the best position to pay more compared to startups.

 

[Kane]

Bigger the company, higher is the perks, smaller the company, smaller is the perks. Some small companies that are making a lot of profits might pay better but the start up cannot afford to pay high

 

[Sariana23]

If you come major banks in my country now, they hire people with lower certificate in order to pay them less than they pay those with their Master's degree.

What you describe is regrettable, since instead of motivating their employees to improve professionally, they discourage them. In my country it is not like the case you describe, everyone has their salary according to their level of education, and they look for better professionals for banking positions and other companies.

 

[Abigael]

Bigger the company, higher is the perks, smaller the company, smaller is the perks. Some small companies that are making a lot of profits might pay better but the start up cannot afford to pay high

That sounds right. The more a company earns, the better it is able to pay people. That is how it is for most organisations. So a company may be a startup but makes so much money and so it is able to pay well. But some startups don't earn much and so they don't pay that much.

 

[Ezekiel]

Unstabilized organization will always want to pay high than the developed and stabilize company so as impress people and get more works.

 

[Toyoabasi]

Startups pay more than established enterprises because they want to gain or attract the minds of the audience. It is a start up and that's always a strategy for promotion and marketing awareness.

I don't think this is common place in all new start ups. The ones that do this are probably using the strategy to bring in and retain a good number of staff.

 

[Dora Wi]

For many people working at a startup or a small company isn't only lucrative for the salary but also for the work environment. It feels very different from the atmosphere of a multinational chain, for example. Your job is often more flexible and versatile, and the atmosphere is more friendly. You can also see how your work contributes to the success of the start-up as opposed to a huge company where it can feel like you are just a cog in the machine.

 

[joy101]

Startup business pay more salary than established one the reason is that them want to use to attracted more people, so that them will start working with them.

 

[greenie]

it also depends on which country you belong to. if you have the possibility to choose between companies where to be employed, it is normal that you choose the company that pays more. but there are some countries / areas where it is the only company and when you think that it received you there, you go to work ... whether it is poorly paid or good. you do not have a choice.

 

[Godspower]

Startup business pay more salary than established one the reason is that them want to use to attracted more people, so that them will start working with them.

This is a good point. Do you think that there is actually a chance of these new companies reducing the salaries with time?

 

[Ghost1]

I don't know which start up are paying more than established companies, I would like to check them out. But if a start up is paying more they simply don't want to lose those staffs

 

[Kvngsammy]

That's not entirely true in my opinion - yeah a lot of startups pay good especially for skilled labour but you can't compare the overall pay packet with that of established companies - the bonuses, opportunities are just way more than.

 

[Gandiba1]

This is because they are trying hard to retain the best players so as to make sure that they get good people who are going to enable their organisation to make good name.

 

[Sincerem]

This may not be true , a lot of well-established business organisation to me are likely to pay higher. New business that have been established newly may not be able to generate enough profit at the early stage and are likely to pay lower.

 

[Shigobad20201]

A comoanybthat just started their business pays their workers more than the already established business because they have to entice their workers by motivating them to work harder , so they are paying for the extra work

 

[tyrim88]

Newly established businesses always want to get the best employees in the labour market. To beat established competitors, they need to offer better Pay package. Hiring a skilled labour with all necessary skill set goes a long way in helping a newly established business achieve their goals at start of the business.

Are there other ways to beat competition in hiring a skilled labour?

Giving them a good pay,is another way of retaining them and also severance benefits is another,then good condition of service and leave allowance,then an avenue to grow in terms of traning.