"Show me the money!" What do you do when your employees start asking for raises?
The Department of Labor recently released their 2013 average salary list along with statistics compiled from the 2013 tax season. Employees have access to median salary information for the U.S., the median salary in their industry, and even the median salary in a long list of standard job descriptions. So, how do you handle employee requests to discuss or bargain their pay?
1. Use That Number as a Starting Point. Median doesn't mean "average." Median is the number in the exact center of the list of data. That means half of the people in that position or industry in the US make less than that amount and half make more. This information can be important to have, and if you are way off, you may need to rethink how you compensate your workers. However, you can also do some homework and research salaries in your area for more relevant numbers.
2. Cost of Living Comparisons. Someone living in West Virginia is not going to make the same amount as a worker performing the same job in California and even adjacent states like Missouri and Illinois have very different minimum wages (MO is $7.35 and IL is $8.25). The trade-off for living in a cheaper state is making slightly lower wages.
3. Provide a Benefits Summary. One of our top recommendations is that businesses provide employees with a benefits summary annually. This statement shows the employee exactly how much is being spent to employ them. In addition to their salary, it would include things like health insurance, life insurance, worker's compensation, short and long term disability, and even the costs to provide coffee and sodas in the breakroom. Essentially it is an "adjusted" salary that shows not only what the business pays them in terms of salary, but the total of what the company pays to employ them.
4. Create and Distribute a Career Map. Millennials are leaving school feeling entitled to a career. They want to start out with five weeks of vacation and fully paid benefits. If you can show them their career path within your organization and possible tracks they can follow for growth and advancement, they may be more likely to stay. It can also be a helpful tool to use with more experienced workers who may not want to start from scratch in their new position.
5. Added Value with Free and Low-Cost Benefits. We are always encouraging business owners to do more for their employees, without affecting their bottom line. There are tons of strategies you can use. Find other businesses you can partner with to offer discounts. Provide the opportunity for employees to enroll in additional supplemental benefits--they assume all the cost. Offer low-cost perks like gift cards, car washes, exercise classes--anything that will help them to fit their busy life into their work schedule. Some businesses even offer concierge services to help workers get their to-do list done!
Studies have shown that compensation is not the most important thing when it comes to retaining employees. They would rather feel valued, respected, and integral to your business. Showing them their worth will help them appreciate what you do for them.
The Department of Labor recently released their 2013 average salary list along with statistics compiled from the 2013 tax season. Employees have access to median salary information for the U.S., the median salary in their industry, and even the median salary in a long list of standard job descriptions. So, how do you handle employee requests to discuss or bargain their pay?
1. Use That Number as a Starting Point. Median doesn't mean "average." Median is the number in the exact center of the list of data. That means half of the people in that position or industry in the US make less than that amount and half make more. This information can be important to have, and if you are way off, you may need to rethink how you compensate your workers. However, you can also do some homework and research salaries in your area for more relevant numbers.
2. Cost of Living Comparisons. Someone living in West Virginia is not going to make the same amount as a worker performing the same job in California and even adjacent states like Missouri and Illinois have very different minimum wages (MO is $7.35 and IL is $8.25). The trade-off for living in a cheaper state is making slightly lower wages.
3. Provide a Benefits Summary. One of our top recommendations is that businesses provide employees with a benefits summary annually. This statement shows the employee exactly how much is being spent to employ them. In addition to their salary, it would include things like health insurance, life insurance, worker's compensation, short and long term disability, and even the costs to provide coffee and sodas in the breakroom. Essentially it is an "adjusted" salary that shows not only what the business pays them in terms of salary, but the total of what the company pays to employ them.
4. Create and Distribute a Career Map. Millennials are leaving school feeling entitled to a career. They want to start out with five weeks of vacation and fully paid benefits. If you can show them their career path within your organization and possible tracks they can follow for growth and advancement, they may be more likely to stay. It can also be a helpful tool to use with more experienced workers who may not want to start from scratch in their new position.
5. Added Value with Free and Low-Cost Benefits. We are always encouraging business owners to do more for their employees, without affecting their bottom line. There are tons of strategies you can use. Find other businesses you can partner with to offer discounts. Provide the opportunity for employees to enroll in additional supplemental benefits--they assume all the cost. Offer low-cost perks like gift cards, car washes, exercise classes--anything that will help them to fit their busy life into their work schedule. Some businesses even offer concierge services to help workers get their to-do list done!
Studies have shown that compensation is not the most important thing when it comes to retaining employees. They would rather feel valued, respected, and integral to your business. Showing them their worth will help them appreciate what you do for them.
RSS Feed
