Pay, company culture and professional development are the top reasons most employees stay at a job. And while pay isn’t always the most important retention factor for all employees, it certainly is up there. Job satisfaction may come in many different forms, but when it comes down to it, your employees still need to pay for mortgages, auto loans, groceries and so on. Offering competitive pay helps your company stand apartment when it comes to recruitment and helps keep the employees you have. With 2.3% of the U.S. workforce quitting their jobs every month, talking about compensation now with your employees needs to be a high priority.
3 Ways to Talk to Employees About Salaries
1. Be Transparent About Salaries
One of the cornerstones of company culture is being upfront and honest with employees about their work environment and job responsibilities; the same goes for compensation. According to SHRM, 38% of employers share with employees the base salary range for their pay grade. That’s important because sharing clear and defined compensation levels makes it easier for employees to reach that next level and achieve their goals. Being transparent about everyone’s pay is also an essential tool for closing the wage gap.
2. Be Prepared to Discuss What Goes into Setting Salaries and Bonuses
If you’re talking pay with employees, the subject of raises will likely come up. Giving employees a raise every time they ask simply isn’t feasible but explaining how salary structures work helps them understand why. Your compensation management structure is likely based on a number of factors including job grades, market research and company performance. Having the data to back up why or why not your employees can have a raise legitimizes your reasoning. Compensation management software can set parameters for merit-based pay increases based on similar salaries in your area, eliminating any pay surprises for your employees.
3. Help Map Out a Plan for Employees on How They Can Advance
Once you explain to your employees how compensation levels are set, you can help them achieve the next pay levels. Performance reviews help you and your employees work towards setting dynamic goals that align with greater company goals to make sure everyone is on the same page working towards the bigger picture. Syncing performance management to compensation management allows managers to automate increases and bonuses based on merit.
BirdDogHR, an Arcoro Company, offers Compensation Management software that works in conjunction with Performance Management and also integrates with existing HR and payroll systems. When your employees meet configurable benchmarks with the Performance Management module, income or bonus increases are automatically calculated and reflected in the employee’s compensation. The Core HR module connects Compensation Management to outside payroll systems for a seamless overall compensation process.