Are you making a quality salary increase decision, or asking them to leave?
2022-01-25
Originally coming from the recruitment industry, I have always been perplexed at how the bigger picture isn’t taken into consideration when evaluating pay for current employees. It isn’t a secret that going out to market can be expensive in both time and money. Companies should be taking the time to evaluate what the current market is vs their internal talent pool. Based on many of the decisions I have seen I would guess not frequently enough. I’m amazed at the number of times I hear about an organization losing a quality employee over an increase yielding a number still lower than replacement cost to “stay within policy” only to lose a high performer and then have to replace (with unknown value) at a higher rate plus recruitment and onboarding efforts.
Looking at this phenomenon I’m curious if this is a misalignment between business line, TR, and recruitment, or is the larger issue a lack of ability to get a view of these figures. Getting the relevant information all in one place allows you the opportunity by role, division, or level to make a more informed business decision each instance. Will each decision be individual based on the employee and their value? Of course. But wouldn’t you want to have an idea surrounding the ramifications of making that “compensation policy” driven choice before hanging your hat on subtly telling an employee you would rather they test the market over a difference smaller than a new employee? Or at least communicate your total rewards package before creating a self-inflicted staffing issue? Do you know what your company was paying those who left vs their replacements? Have you at least married up current roles vs external rates?
If not, you just might be subtly asking your team to test the market; and is that what you want to do in today’s employee demand marketplace.
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