The start of a new year often means seeking out different career opportunities and hopping from one job to another. And if there's one major driver behind the decision to jump ship, it's none other than salary. That's the latest from a Glassdoor survey, which found that over one-third of companies expect more workers to quit over the next year, with salary-related dissatisfaction being the primary reason why.
If you're looking to retain solid employees, it pays to have a smart approach to managing salary expectations. Here are a few tips to help you get started.
1. Be transparent
One way to avoid upsetting workers over salary matters is to be completely open with them about what to expect moneywise. This means sitting down with employees well before the end of the year and reviewing your compensation policy clearly. Specifically, be prepared to address questions such as:
- How does the business determine who gets raises and whose pay stays the same?
- How are bonuses calculated?
- How does company performance impact salaries?
- What data or industry benchmarks does the business use to arrive at compensation figures?
These are things you should be prepared to discuss with employees throughout the year so that there are no last-minute surprises that trigger negative reactions.
2. Talk money
Another good way to properly manage salary expectations is to encourage open conversation between managers and employees about money. Your workers should feel comfortable sharing their thoughts on what they think is fair, and managers should be prepared to address that feedback and share their own methods for assigning salaries.
Furthermore, let your staff know that salary talks don't have to be a one-time thing. Rather, let them constitute an ongoing conversation so that workers don't feel as though the topic is taboo.
3. Stay consistent
There's no better way to anger employees than to tell them one thing, but do another. Similarly, sending one message to one worker and a completely different message to another is an easy way to come off as dishonest. A better approach? Stay consistent with your messaging around salary.
Specifically, map out a companywide approach to determining salary, and document your methods so that you're able to communicate a solid set of facts. This will not only help minimize confusion among employees, but help you gain their trust.
4. Map out a budget in advance
Some companies make salary decisions on the fly, but that's a good way to tick off employees when things don't go their way. Rather than wing it, sit down at the beginning of each fiscal year and map out a budget that dictates your options for raises, bonuses, and other means of compensation. Knowing what sort of budget you're dealing with can help you be more open with employees about money. It can also help you maximize opportunities to reward them financially.
5. Focus on the big picture
It's easy to get hung up on salary when you're an employee concerned with paying the bills. But it pays to remind your workers that salary is only one piece of the compensation puzzle. There are other benefits, like bonuses, paid vacation time, 401(k) matches, and health insurance, that have monetary value, as well, and these perks should be taken into account by your employees when determining whether they feel they're being paid fairly or not.
If there's one major takeaway here, it's this: Have a plan when it comes to managing expectations around salary. The more thought you put into your company's strategy, the better your chances of not having money be a barrier to employee retention.