Very often people move jobs because they feel they deserve more recognition for their hard work. Surprisingly, often this does not mean increased remuneration.
Remuneration and recognition are best seen as two aspects of employee reward.
The way in which individuals prefer to be rewarded and recognised varies, it could be as simple as a pat on the back to a more structured salary review process.
The single most important thing is that your employees feel valued and know that they are recognised for their contribution to your business. Employers often are concerned only with the outgoing of the salary or wage, rather than the essence of what motivates the individuals – being part of the success.
Both aspects are worth consideration at the time of reviews. Often an incident or exchange in the working environment can cause people to look around. Happy employees are productive employees.
What does it really cost to replace a key staff member?
Let’s look at the cost of replacing a key person in your business – aside from recruiting cost and time spent interviewing that could well be spent on other important considerations.
If there is a gap after one person leaves before the new person is appointed, how much productivity could be lost, and how much strain will be placed on other team members – and what might the future cost of this be in real terms if any of them start to look around the market as a result of that added pressure.
How much of your time and time from other key employees will be required for correct induction of this new employee, and how much time post induction will be taken to bring the new replacement up to speed to the level you require for him or her to work independently.
How much will those learning curve errors cost you in time and money – much less stress, and how much will your culture be changed by a new energy coming in.
This is the reality of key staff changes.
Let’s break down the financial aspect of salary reviews.
Say someone warrants a $5,000 annual increase in salary. That feels like a lot, but let’s do the maths:
$5000/52 weeks= $96.15 per week extra to retain an experienced, motivated person – who will now be super motivated due to the outstandingly generous pay rise he or she is enjoying – for less than $100 per week.
In my opinion, that is a small price to pay to retain a valuable team member.
This quarter the team at ConsultingHQ are running annual performance reviews and salary reviews with all of our clients.
The outcome of this is to identify which team members have gone above and beyond, are constantly improving and also to identify those that either need performance management or coaching.
Why do salary reviews?
You can keep your salary review and annual performance review separate but it does make sense to bring the two together and allows you to reward your high performing staff. If you are managing both processes it is best practice for the salary review to happen immediately after the performance reviews.
In general, salary reviews are about two things:
- How the employee performs their job
- Where that employee fits relative to the external job market.
How do I know what to offer?
We work closely with the RecruitNZ team, who have access to a variety of data-sets that are able to be broken down by industry and geographically. This enables you to confidently assess what you are paying versus what is in the market. CPI and general economic trends are also taken into account.
Importantly, because we work across a number of businesses, and we specialise in innovative business solutions, we can also discuss with you ways of increasing that intangible non-pay related aspect of retaining staff. People will stay with you because of the working environment, the systems & processes, for future security of being in a well-run professional business, and because you pay attention to their contribution and pay them what they are worth in the market
Next step: a FREE 30-minute consultation
If you’d like to find out more about how we can help you reward and recognise your existing team, contact us to request a FREE 30-minute GTM or skype. We’ll discuss your unique situation with the decision makers in your business and recommend a solution that would work for you.
Call 0800 HRHOTLINE (0800 474 685 463) or email info@consultinghq.co.nz – we’re looking forward to hearing from you!