Your business is only as strong as your personnel. When you’re fully staffed with skilled and engaged workers, your clients and customers feel content and taken care of. On the other hand, losing just a few of your top performers could lead to a drop in productivity and a shaky bottom line.
Employees, especially your most talented ones, are likely to seek job satisfaction elsewhere when they feel underpaid. According to Robert Half’s Confidence Matters survey of workers, 90 percent of respondents feel they deserve a raise, and 44 percent plan to ask for more money this year. And what would they do if they requested a higher salary but were denied? Twenty-three percent — up four points from 2016 results — said they would search for a new position elsewhere.
Most workers today have more choices than ever. Losing top talent, especially to your competition, is a productivity risk very few businesses can afford. Consider the impact of institutional knowledge walking out the door, the time and expense of recruiting and interviewing candidates, and the burden of training.
In short, management needs to be prepared to talk money. Don’t get caught off guard — prepare for the inevitable compensation questions in advance and you’re much more likely to find a mutually agreeable answer.
1. Research local salaries
If it’s been a while since you’ve benchmarked starting wages, it’s time to do your homework. Use sources like the Robert Half Salary Guides to get the latest information on salary ranges for hundreds of job titles. Note that employees with professional certifications normally earn a few percentage points more. If your compensation packages are below average for your industry, city or company size, you’ll need to be more proactive about handing out raises than firms who already offer salaries at the top end of the scale.
2. Analyze your budgets
Look over your current line items and see what monies can be moved toward salaries. And when you work on budgets for the upcoming fiscal year, make sure to give high priority to personnel. It also wouldn’t hurt to have a robust fund for merit awards, retention bonuses and employee recognition gift cards. Make employees feel wanted and appreciated.
3. Prepare for performance evaluations
Whether you conduct a formal review once or several times a year, employees will typically bring up the issue of salaries and promotions during these meetings. As part of your preparation for such meetings, have available each worker’s current salary and how that compares with local averages — just in case they bring up the issue of money. Also compare their official job description with their current responsibilities. If they’ve taken on more tasks since their last review, then a salary raise may be overdue.
4. Examine your attitude
According to our research on happiness at work, the top reason workers stay at a job or leave it has to do with their relationship with management, especially their direct supervisor. So rather than getting irritated by employees’ requests for more money, look at it as a gift. They’re giving you important information about job satisfaction — as well as the way to keep them onboard. Don’t squander this opportunity. It may be too late to woo them with more money when they hand in their resignation, as counteroffers seldom work for either party.
5. Be proactive with salary conversations
There’s no need to wait for employees to ask before giving them extra money. In fact, as our survey suggests, the majority of people who feel they deserve a raise won’t even ask for one. It's also more meaningful when you increase salaries without being prompted. This is especially the case for your most skilled and productive workers — those who would be most difficult to replace.
6. Avoid saying no
No one likes rejection. Whenever possible, give valuable employees what they ask for if doing so won’t wreak havoc with your budget. Understandably, you may not be able to grant every request for more money. In those cases, as part of your planning, brainstorm a basket of non-wage perks. Besides salary, today’s professionals value benefits that help them achieve better work-life balance, such as flextime, the option to telecommute, more vacation days or a 36-hour workweek. You could also add that you’d love to revisit the issue in the next three to six months.
Good workers deserve good pay. During times of low unemployment, a competitive salary is critical for keeping workers happy and your business humming along. Now is the time to evaluate each employee’s compensation package and, if they fall short, to shore it up.