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As a hiring manager, the last thing you want is to lose a top performer or great team member if their reason for leaving is within your control. Therefore, it is important to regularly benchmark your team’s salaries against the market. When there is confidence in the economy and demand for staff is high, employees know that they can move elsewhere if wanting more money is high on their priority list. Taking action before your team want to make a move is just smart management.
Regularly benchmarking salaries (we suggest every 12 months), in your team not only prepares you for a conversation with your employee should they approach you for a pay rise, but it can also serve as a warning sign if your salaries are below market rate. This will inevitably put you at risk of losing key team members.
Be prepared and reasonable. Not every request for a pay rise is unjustified. Perhaps your team member has taken on additional responsibilities? Conducting a benchmarking exercise will give you sufficient information to know whether the request should be considered further. You may also find that the current market rates are usually aligned with greater responsibility and additional work. You can ask your employee what other tasks they could take on in their current role or what additional skills they are looking to develop that will justify them earning a bigger salary.
If you find yourself faced with a reasonable request for a pay rise, but your budget doesn’t allow for significant salary increases, there are other options to consider. Start with looking at each employee’s current skill levels and qualifications to highlight training gaps. Learning and development opportunities are key in job satisfaction and can reduce salary concerns in the short term.
However, if you find yourself in a situation where your employee genuinely feels that they are worth more money than you are prepared to pay, the reality is that this person will likely go where the money is. Ask yourself what value they really bring to the company and what are the potential risks of them going elsewhere.
Our consultants at Halliday Marx consistently track and research what a fair and reasonable salary is for all London based accountancy roles, we have a holistic view of what the market is paying for different positions and what skills are in demand. We’d be happy to discuss our findings with you, you can contact us on 020 7096 8200 or email [email protected]