Is it time to give your employees a pay raise?

According to a recent Glassdoor study  the top 2 reasons people quit a job are company culture and pay. Company culture is also one of the top two reasons people end up accepting job offers.  Culture matters but what about pay?

Over 80 % of job seekers will “Google” a perspective employer before even filling out a job application. What a job seeker finds out about the company and what it is like to work at the company will determine whether they start the job application process. The job application is at the top of the “applicant funnel” that determines the people the company have to choose from as their new employee.

At WorkRocket we are experts at helping companies build positive online reputations and increase the number of qualified people in their applicant funnel.

So, is it time to give your employees a raise?  If culture is the number one reason people stay or join a company, compensation is a close second.  While companies with positive work environments and cultures may be able to get away with compensating existing employees less than current market rates, this situation can only exist for abbreviated periods of time.

With the continuation of low unemployment and strong demand for talented employees, eventually a successful organization risks becoming less successful due to their talent shortage.  This occurs for two reasons:

• The company fails to attract the most talented applicants as competitors improve their cultures and offer higher compensation
• The company begins to slowly lose their best employees as the market begins to norm departing due to currently available compensation.

 

How you view the likelihood of continued low employment and a strong employment market will determine your answer to the question, “Is it time to give my existing employees a raise?”  If it is your opinion that this will be short lived, your positive company culture may be enough for your company to both keep and hire the best employees.  If it is your opinion that low unemployment may be around for a while, even your positive company culture will not be enough to keep and hire the best employees.

If however, you do not have the best company culture you had better start handing out raises fast before your company begins to deteriorate.

Perhaps you should heed the advice of John Ruskin. (a 19th century English thinker, poet and fervent art critic) He wrote in “The Common Law of Business Balance”:

“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person’s lawful prey. It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Want to find out more about how WorkRocket can help your organization attract and retain top talent? Drop me line at Paul@workrocket.com or call me at 804-332-6396