SHOW ME THE MONEY

Keeping People Happy and Loyal in an Extremely Competitive Market

MAY 2018 NO. 142

Are you losing key people to a higher paycheck?

You went through all the steps to find and hire an amazing new star employee. But here’s the next challenge: keeping them happy and loyal in an extremely competitive market.

Nowadays it’s very easy for anyone to find out what a job pays. Whatever the function, whatever the level, in any part of the country.

So if your VP Marketing checked out salary comparison sites like Glassdoor or Payscale and found out that she is making $50,000 less than her peers in a similar business, and in the same city, you may have a problem.

“90 per cent of people are open to hearing about new job opportunities and would consider leaving for the right role. Three years ago, that statistic was 78 per cent. And it was at that level for several years, and then this year it jumped up to 90 per cent.”

This, according to recent surveys conducted by global recruiting firm, Hays.

Why? Because in a confident job market like the one we’re in now, people aren’t afraid to move around in search of greener pastures. And that has some businesses worried, but not, it seems, worried enough to act.

HR teams and employers are afraid of losing top talent to a higher paycheck – but only 24 percent of surveyed organizations plan on increasing salaries by more than three per cent this year (that number was at 45 per cent in 2012).

That statistic has many organizations wondering: how do you avoid losing top talent to a higher paycheck? Is raising salaries the only solution? How can small businesses compete?

5 WAYS TO AVOID LOSING TOP TALENT TO A HIGHER PAYCHECK:

1. REVIEW SALARY LEVELS REGULARLY (EVEN IF YOU CAN’T MAKE CHANGES)

It’s easy for employers to keep their salaries the same and just pray that no one complains – or worse, only tweak them when a star performer comes to you with a counter offer. But it’s important to review salary levels regularly to stay informed and prepared for any unexpected compensation discussions.

The first step in reviewing salary levels is to get some market information. Even if you know you can’t raise salaries this year, you should do a review on a regular basis to see where you stand in the industry –  the real-world data may surprise you. According to the survey, only 42 percent of professionals say their salary is competitive with the market average – but unless you do some research yourself, you won’t know if your workplace perceptions are accurate.

Once you have some market data to inform your discussion, consider reviewing salary levels each time you need to fill a roll – particularly if it’s been a year or two since you filled it.

2. THINK ABOUT THE FULL PACKAGE (BY SURVEYING YOUR TEAM)

If only one company you know pays the most, you don’t need to be that company.

Even if you were, tomorrow somebody else would decide to pay more. In other words, money isn’t everything.

But you do need to be competitive and consider the full compensation and benefits package.

And when it comes to creating that full package, you may want to ask your employees first. It may not be best to figure it out for yourself, because what you think is a good idea might be one that nobody cares about.

Instead, survey your team to see what types of perks and benefits they’re interested in. You may not be committed to doing all of them. Nor committed to doing any of them, actually – you’re just asking. Though, of course, if you’re sending out the survey, you’ll want to follow up with a new initiative.

3. DON’T DO EVERYTHING RIGHT AWAY

It can be daunting to look at a shortlist of perks and benefits your team is asking for. But the important thing to remember is that you don’t need to do everything right away.

If you’re giving that general feeling that you value your team and that you want to make improvements, and they’re seeing that you consistently do something, that’s the right tone.

Stretching out your new initiatives over a few years also manages expectations. And you could apply that to salaries as well. Consistently increasing it every year by one-and-a-half or two per cent is probably better than nothing for three or four years and then suddenly a three per cent increase in one year.

4. REMEMBER THAT CAREER PROGRESSION + COMPANY CULTURE > SALARY

Bottom line. It’s very difficult to remain competitive without salary. Salary is the most important factor if you could only pick one, when it comes to deciding to stay or to leave. But other factors, when they’re added together, can become just as important as salary.

What are those other two factors? Career progression and company culture. In other words, if an individual is deciding whether to stay or go, he or she will, in most cases, give more weight to the combination of career progression and company culture than they will to salary.

Many people also feel that they could probably leave their job today and get a 10 percent increase or more, somewhere else. The question is whether they really want to leave. And for most people, if they feel like they are making progress professionally, and if they like their boss, and like the company culture, they’re probably going to stay put. So, salary’s important, but it’s not the only thing.

5. DON’T WAIT FOR SOMEONE TO RESIGN

When you’re trying to avoid losing a top performer to a company with a bigger paycheck, it’s important to be aware of the warning signs long before that resignation comes.

The biggest mistake that an organization can make is waiting until a person resigns before doing anything significant. Often, that person expressed some frustration beforehand. They might have asked for a raise, promotion, or added perks. You must be able to identify and respond when someone is putting their hand up and saying, ‘I’m unhappy.”

The simple act of responding to that disgruntled employee – hearing their frustrations and talking to them about the changes you’d like to bring to the company – may be far more valuable to them than a salary change.

Most of the time your workplace wants to be heard. Try to be a good listener.

Source: PayScale

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