For some HR professionals, offering a higher-than-anticipated salary to a talented worker is worth it if the person stays at the company. However, HR representatives need to be careful not to jump the gun with offering a higher salary to an employee just to tempt them to stay at the company. While low pay can be the cause of workers' departures, many times there are other reasons behind employees changing their jobs.
HR professionals need to account for other factors that may be causing workers to rethink their employment at the company before raising salaries too high. Even if HR representatives negotiate a salary raise with a worker to motivate him or her to stay at the business, this person may still end up leaving because there were additional elements as to why he or she was unhappy. According to HR Morning, salary and benefits may not be enough to retain workers.
HR departments must be able to maintain tight control over their payroll management, otherwise they can end up harming their companies' bottom lines in numerous ways. A recent survey from The Creative Group highlighted just how important it is for employers to get to the root of why employees are leaving the company, and how salary renegotiations are often just a short-term, expensive solution to keeping workers with strong skill sets.
The Dangers of Boosting Salaries Too Soon
The Creative Group interviewed 200 marketing executives and 200 advertising executives to understand why they provide workers with a counteroffer to retain them at the company. According to the results, 39 percent do it to ensure employees with hard-to-find skills remain at the business, and 27 percent said they provide salary counteroffers to those workers with a long tenure of the company. In addition, 20 percent said the frequency of how often they have to do this has increased within the past six months. Of those employers who provide workers with an offer of a raise to stay, 67 percent said it is fairly common for employees to accept the higher salary.
Yet many respondents said they remain concerned about those workers who do accept counteroffers. Twenty-eight percent said they still question the loyalty of the worker, and 21 percent even noted they continue to worry that there are still underlying problems that haven't been addressed that may cause the worker to leave the company. Twenty percent were directly concerned that their company's salary structures would be distorted, and another 15 percent worried about the employee's relationship with his or her manager.
Before HR professionals even consider renegotiating with workers about their salaries, they should have a good idea of the specific employee's skill set, abilities and experience, as well as his or her knowledge of the company. Knowing the value of the employee can help HR professionals and company management decide if it is worth it to adjust the business' payroll management. While it may end up being more expensive to have to replace the worker, HR professionals shouldn't discount the importance of their payroll management to their company's bottom line.