Hi, I'm Candice Elliot and I'm a human resources strategist. In this video today, I'm going to be talking with you about the internal economy. The internal economy is a term that I use to describe compensation and benefits and other economic factors that are at play inside of your business that affect your employees. I've worked with so many different organizations over the years on compensation analysis and compensation structure and benefits offerings and leave offerings and all of these things.

I just want to start out by saying that starting from a place of providing an equitable compensation structure that provides a livable or more than a livable wage is the foundational strategy that I use. I find that it is essential to provide people with fair pay for the work that they're performing, that by doing that it reduces turnover, keeps people in the company longer. If your industry typically pays under a livable wage for a particular job, my strategy is to come up with a plan to raise that wage to the livable wage. Sorry, I've been using this term, livable wage, and I want to define that.

We have a minimum wage, which is dictated either by the federal government or the state government or city and county governments. That's the minimum amount that you need to pay someone in order to comply with those laws. [00:02:00] A livable wage is a separate analysis that happens typically at the county or sometimes the city level that says basically how expensive it is to live where you live, and what wage someone needs to be earning in order to be able to afford to live there. That's where I start. That's the method that I start with when looking at this internal economy is, what is the wage? Is it a livable wage or not?

Then we look at outside organizations and if it's possible to raise the wage or not. Another essential tenet of building compensation and benefit systems is that they're affordable for the organization. Not all organizations are going to be able to pay more than a minimum wage because of the amount that they have to charge for their product and other overhead expenses. If there are ways to create a better wage for staff, then we try to work together to make that happen. Aside from wages, the other piece of this internal economy are the benefits that you provide to your employees.

I'm going to go into more detail about what all those benefits look like, but common ones that you see are medical, dental, vision insurance, retirement plans, and other kinds of fringe benefits that only your company is able to provide because of the unique industry or product that you have. Thank you for listening to me talk about what this term means and I'm looking forward to explaining further about these different facets of the internal economy. [00:04:00]