Paying the Price for Waiting Too Long to Increase Compensation

Waiting Too Long to Increase Compensation

There was a time in the not-so-distant past when many a company didn’t give out salary increases — for year after year after year — and employees wondered if they’d ever get raises again.

There were no bonuses. There were no holiday parties. There were furloughs (mandatory days off without pay) as a way to prevent having to fire good employees.

Today is not like that time. If a manager can’t remember when wages were last increased for the star performers, those employees may be ready to walk out the door, lured by what's offered elsewhere.

According to a new Robert Half survey, one in four (25 percent) chief financial officers (CFOs) said he or she has lost a good employee in the past year to a job elsewhere that offered higher compensation. Separate research from our company found inadequate salary and benefits to be the main reasons people quit their jobs.

Employers need to offer salaries and benefits that will entice staff to stay, and to retain their best and brightest employees in roles where they are already succeeding, so they don’t look somewhere.

How does a manager do just this? Robert Half’s Paul McDonald says, “To attract and keep engaged, committed employees, businesses must proactively benchmark salaries and ensure they are offering competitive pay.”

How does one benchmark salaries? Well, I’m going to recommend you consult industry reports like the 2015 Salary Guides for the most in-demand positions. And if you still need more resources, try a few of these ideas to make certain you’re paying your employees competitively:

  • Conduct internal surveys. Check in with your employees periodically to ensure your benefits package meets their needs. By asking what incentives are most important to them, you can tailor your company’s offerings accordingly.

  • Talk to recruiters. These professionals keep their fingers on the pulse of the job market and can help you keep current with local pay and benefit trends. 

  • Consider nonmonetary options. If salary increases aren’t in the cards, nonmonetary offerings such as flexible schedules, remote work options and additional vacation days can go a long way to improve employee satisfaction.  

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 How, if at all, have you adjusted compensation levels at your company to retain star employees?