Early this year, Fast Company suggested that employees around the world would be reaping the biggest salary increase they have seen in years during 2016. As memories of the global financial crisis fade into the distant past and global inflation blooms at 2.5 per cent, it's about time.
This is a great sign that economies and confidence are rising throughout the world. Even though inflation in Australia tapered off to 1.7 per cent as of March this year – down from the 2.1 per cent reported in the last two quarters of 2015 according to the Reserve Bank of Australia – employees across the nation will be waiting vigilantly for when their impending pay rise will arrive.
However, for many small business owners who are handling HR issues themselves on top of everything else, salary reviews sometimes fall into the basket of "If or when I have time". However, they are incredibly important for ensuring that staff feel valued and appreciated, as well as a key strategy in attracting and retaining a strong talent pool.
People regularly leave their jobs because they aren't paid enough
In 2014, global staffing company Robert Half asked thousands of employees what the main motivators were for them leaving their jobs. Disappointment with management was a key reason for 16 per cent of respondents and a lack of clear opportunities to develop within the company would drive one in five workers out the door. But a whopping 38 per cent said that their decision to quit their job would more than likely relate to inadequate salary and benefits.
"Competitive pay and benefits can be the difference when it comes to retaining skilled talent."
In today's job market, Robert Half senior executive director Paul McDonald suggest that putting off pay reviews is anti-competitve and ultimately problematic for many employers.
"The stronger hiring climate today means employees who don't feel well compensated may be more willing to look for a new, better-paying job," he said. "Managers should regularly benchmark salaries against those of other companies in their region and industry to ensure they are at or above market standards."
"While many factors contribute to turnover," Mr McDonald continued, "competitive pay and benefits can be the difference when it comes to retaining skilled talent."
However, if you have never done salary reviews or don't quite know what the benchmarks you should be aiming for are in Melbourne, you may need some assistance. By working with Flexi Personnel, we can help fulfil all of your HR consulting needs.