3 Things to Consider When Raising Pay
As previously stated, employers are at the front of the line when it comes to The Great Resignation. Taking blows left and right with increasing demands from employees where immediate action is needed or they too, may start losing their valued employees. Or maybe you have already lost valued employees and are now trying to replace them with little to no luck. One of the more prevalent demands from employees is an increase in pay. If you feel that this is in your wheelhouse, there are a few things to consider when raising pay that we are here to shine a light on.
CONSIDER A SIGN-ON BONUS
It is no secret that job seekers are asking for a higher salary than ever before. This could be due to the employers’ frantic need to fill an open role within their company post-pandemic. In fact, surveys show that over half of ‘job switchers’ received a salary increase of 52%. As we all know, once you begin the trend of offering higher wages, you cannot simply just step back from that. People are now inclined to expect more with the offer of a new position as a lateral move is not nearly as enticing. Rather than offering a fixed pay increase, try offering a sign-on bonus. This will alleviate the stress of then potentially having to offer pay increases down the line of employees, and allow you to offer a one-time fee for their agreement to work for your company.
DETERMINE CRITICAL POSITIONS
No matter how bad you may want to, the deciding factor of a pay raise comes from one thing, and that’s your budget. If you do not have it in the funds, you cannot provide an increase. Simple as that. On top of considering a pay increase, you may want to consider your employee structure. When was the last time you reevaluated the positions, you have compared to your company goals? You may find that you have roles within your company that could easily be consolidated, or may, unfortunately, be irrelevant to the direction in which your company is currently moving. That being said, if you could consolidate two roles into one, you may be saving a whole salary rate that you could allocate or divide elsewhere. As harsh as it may sound, that’s business. Sometimes you have to take from one place to give another. That’s also one of the sad truths of growth. It’s only natural that as your company grows you will need to reevaluate things such as employee structure.
DON’T FORGET YOUR VETS
If you find yourself in the position of offering a higher salary to incoming employees, don’t forget your long-time employees. Listen, people talk. Now, more than ever, workers are openly discussing salary with other coworkers as a way of leveraging their potential raises. It will not be a secret for long that you hired Joe at a starting salary of $75k, while your 6-year employee Kevin who holds the same title as Joe is only at $70k. Though highly frowned upon, the National Labor Relations Act protects employees’ rights to discuss conditions of employment, including pay. You’d be hard-pressed to find a way to stop them. So, we recommend that when considering offering a higher salary to incoming employees, it may be time to also raise your long-term employees to keep them feeling valued within your company.
If you are currently in a job search or you are searching for qualified candidates to fill your open roles, please give us a call at (518) 275-4816 where we are happy to find your perfect fit!
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