Will your company be giving raises next year?
How much to pay each employee is an important consideration for any business. Competitive compensation is necessary in order to attract talent. Since an business is only as good as its employees, it is in the best interest of any company to hire and retain talented individuals who want to stay for the long haul.
As it can be costly to find and train a replacement, employee retention is a high priority. A recent article from Bloomberg BNA details the role raises play in overall wage growth. The article points to information from Korn Ferry, an executive recruiting company, that says 71 percent of employers have plans to increase their staff salaries next year.
In addition to increasing salaries, it is expected that 90 percent of executives will be giving out bonuses at year's end. The article cites information from a survey conducted by Towers Watson that reveals the importance of compensation.
"Pay really matters to employees when they make decisions about whether to join or stay with a company," Laura Sejen, Tower Watson's managing director of rewards told Bloomberg BNA. "Simply offering a competitive salary and annual bonus is not enough to win the war for talent. Employees believe that employers are falling short in how pay decisions are made and that there is much room for improvement."
In an article for Inc., Suzanne Lucas shares the story of one employee who was promoted to a higher role due to talent. However, the person did not receive a salary increase, although they were now tasked with more work. This type of approach can lead an employee to feel under appreciated, and may cause them to seek employment elsewhere.
Compensation decisions are a critical part of business. A comprehensive HR software system can help your team make more informed decisions.