The United States’ current economic situation is one reason your company should be considering increasing employee compensation, but it is not the only one. According to this article by CNBC, 52% of small businesses are still struggling to find and hire qualified talent. If your company has a payroll with 50 or fewer employees, this news may not be new to you and is likely to be impacting your growth efforts.
For any organization struggling with talent acquisition or employee retention, one of my pieces of advice is to consider increasing the pay rate for your current employees and for any incoming new hires. Granted, not every company is in a position to increase the salaries of their entire workforce. But, I do implore you to at least consider the following:
It increases employee satisfaction; and consequently, employee productivity
A happy employee is a hard-working employee (9 times out of 10). While I do not have data to support that ‘guestimate,’ this Forbes article from 2019 does and it notes that happy employees are 20% more productive than unhappy employees.
In a previous article on employee satisfaction and retention, we list one of the top contributing factors as employee pay, which still stands. Simply put, employees want to be fairly compensated for what they are worth. Sites like Glassdoor also contribute to an employee’s knowledge about what the average pay is for their title and experience level, which leads me to my next point.
It increases your company’s competitiveness on the job market
If you are actively hiring or simply keeping an eye out for above-average talent, you need to be prepared to pay those prospective employees what they are worth. If you don’t, another company will, and job seekers are aware of that.
An issue faced by many hiring managers and recruiters is the fact that there are almost too many positions to fill. If your company falls into this category, it may be caused by a few reasons. (Have you considered allowing employees to continue working from home?)
According to this CNBC Make It Article, a PwC survey found that an astounding 65% of workers were seeking a new job, with one of the main reasons being salary. Unless you are looking to lose your current A-team employees to your competitors, you need to consider offering higher salaries.
If you can afford to offer higher pay, you should
As a member of the workforce myself, maybe I am a bit biased in feeling that companies should pay their employees a fair salary. Maybe that’s just me. But based on the data presented above, it doesn’t seem that way.
If you want to keep your high-performing teams or recruit strong talent, you have to be willing to pay them for it. If those options aren’t quite available for your company yet, that’s okay. Consider other benefits you can offer instead, such as offering professional development opportunities.
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