Get Ahead of the Wage Curve
As an employee retention speaker and employee retention author, I regularly hear from representatives of companies how they lost people to another organization because of money. It is this employee retention consultant’s opinion that should rarely happen. If you are paying competitively, money should not be the deciding factor as to why people leave your organization. The key words are “if you are paying competitively.” The problem is that most organizations wait until they lose a bunch of people before they decide to adjust their wages in order to pay competitively.
In the old days, when dinosaurs roamed the earth and I was starting in HR, compensation experts used to talk about leading or lagging the market. That was great when people were far more loyal and would stick around and when the average employee did not have access to salary data like they do now. Employees can go online at any time and look at where they stand in relation to the market place. People don’t gather salary data like in the old days by talking to their buddy when having a beer at the bar. If someone suspects they are underpaid, they fire up the computer and do a Google search. It’s that simple. In many cases, employees are ahead of their HR people or organization when it comes to salary surveys. Why? It’s their livelihood vs. just another thing that HR is tasked with doing.
When an employee sees they are underpaid, they then do another Google search for job openings in their field. When that happens, it’s all over for the employer because it’s only a matter of time until someone finds them or they find someone. The key to avoiding this deadly process is to be looking at wages constantly and adjusting immediately when you see that you are soon to be uncompetitive. The days of lagging the market were great when employees were not in high demand. Organizations need to be proactive. The last thing you want is someone to come in and say, “I’m underpaid, here is the data and if I don’t get a raise I am going to work down the street.” Then you either ante up or lose the person. The word then spreads like wild fire through the organization how that person got more money and it becomes a PR nightmare.
The answer is to stay on top of the market. It’s hot out there. Smoking hot. Be proactive. Get ahead and lead the market. The last thing you want is a bunch of employees giving notice that they are going elsewhere for more money.