Trying to reduce turnover at your company? You’ve probably noticed this recent phenomenon then.
These days, employees aren’t as nervous about changing jobs. You see, the job market has changed over the last year. In 2018, unemployment was at its lowest in 50 years. Today, there are more than 7 million open jobs—and only 6.5 million people considered “unemployed”. That includes new workers in the job force who are looking for their first “real” job.
That means that companies have to try harder to maintain their current, outstanding team members in what’s become a fluid and competitive job market by providing a reason to stay.
One survey found that “45% of hiring managers noted salary as the top reason for employees changing jobs, followed by career advancement opportunities, benefits and locations.”
Fifty percent of hiring managers noted that salary and compensation packages were candidates’ top considerations when accepting or declining a job.
The upshot is this. If you have top-performing employees, you don’t want to lose them. And the statistics show that better salaries win major points in an employee’s career book.
So we’ve put together a little guide to minimize the sense of loss you may be feeling at the thought of losing more employees, and the accompanying frustration of figuring out salary raises.
Base employee salary raises on these
- Performance reviews
Annual or quarterly performance reviews are a great place to start. Have some team members exceeded expectations or made marked improvements after their last review? You may help maintain the momentum by encouraging good performance with a salary raise.
- Impeccable work ethic
Do your employees voluntarily take on responsibilities that aren’t part of their original job description? Are they open to helping out whenever they can?
- Skill improvement or credentialing
Employees who take the initiative to expand their skills and increase their ability to help your company succeed should be commended—and receive a raise in accordance with their new skillset.
- Performance metrics
Team members who have delivered quantifiable results that have improved your company or generated profits are prime candidates for salary raises.
Take the next steps to raise those salaries
Review your budget
Money for salary raises may not always be apparent. But you can often shift money around (or remove line items altogether) to make some space for raises.
Take the first step in discussing salaries with your employees. Don’t wait for the moment when they approach you with a salary raise or bust conversation after finding a nicer paying job. Take the higher road and commend where commendation is needed.
If your company’s finances really won’t allow salary raises, you should still avoid saying “no” to a raise by getting creative on what you can offer to excelling employees. Consider additional PTO, flexible schedules or merit or retention awards. Or think about adding some fun new perks to your company offerings. While perks don’t pay employee’s bills, if they provide enough of a value-add, they can be perfectly received in place of a salary bump.