In today’s fluctuating economic times and globally competitive environment, it can be easy to lower priorities on staff paycheques while focusing on higher profit margins. But underpaying staff can do a lot more harm in the long run. Here are three key reasons why paying your staff competitive salaries can benefit your company, and what you can do to keep up good morale when it comes to remuneration.
Losing Your Staff to Low Salaries Can Cost More, and Lower Morale
Businesses that retain the philosophy of offering carefully crafted, competitive salaries reflect onto staff that they are willing to do what it takes to attract and retain the right talent for the business. When staff leave because they feel they are underpaid, businesses have the added burden of finding and training new talent, which often costs considerable time and resources.
During that job vacancy gap, project timelines may suffer, customers may not have their queries responded to in time or existing staff may feel overburdened with the need to take on additional responsibilities until the vacancy is filled. This can have much more serious implications for your business – and an even more devastating impact on the bottom line – than if you offered a more competitive salary in the first place.
What you can do: Include a salary review held together with each employee’s performance appraisal. This will give staff the chance to voice their opinions about their salaries and discuss any revisions if needed.
Talent Is an Asset, Not Simply a Business Expense
Companies that pay competitive salaries understand that investing in talent is central to business goals. After all, employees are your business, and form a core part of your brand vision, identity and industry reputation.
Businesses that see salaries merely as a business expense fail to see the bigger picture and wider impact talent investment really has on the business in the long term. So it’s vital to stay on top of your industry pay scales, and ensure you have a transparent hiring and talent management policy that meets industry expectations and standards across the board.
What you can do: Doing a little research on sites such as Hudson allows you to see what other companies are paying their staff for similar roles and can help you gauge what amount you should be offering for a specific position.
Showing That You Care Helps Build Loyalty
A competitive salary doesn’t just include money – many workers stay in a job for more than the pay packet. Flexible working arrangements for working mums and dads, staff bonuses and awards, as well as gift certificates or vouchers can show staff that you care about their welfare and value their contribution and achievements. On top of this, such added initiatives can help boost morale and create a more cohesive and positive working culture for your staff.
What you can do: If increasing the salaries of your employees is not yet feasible for your business, show you care in other ways such as having regular social gatherings, or offering additional reimbursement for employees required to stay back after office hours.
Understandably, not every business – especially startups – can afford to pay employees a salary that matches market rates. But a good salary policy and genuine care for your staff can inspire confidence and help make the business a more desirable place to work.