New year, new pay? Your employees may be hoping so. If you haven’t already noticed an increase in raise requests, you may soon, as they have increased from just two years ago. In a sign of economic recovery, the wages of job holders – not new hires – have become the prime contributor to wage growth, indicating that employers are focusing on retention. The third-quarter 2014 ADP Workforce Vitality Index report shows that real (after inflation) wages are accelerating across the U.S.
- Hourly pay for private-sector workers was up 4.5 percent in the third quarter compared to a year ago.
- Pay rose faster for financial and construction workers – up about 4.8 percent over the year.
- By region, wages increased the most in the West, at 4.7 percent.
As a direct result, employees are becoming increasingly more confident as the economy improves, and will gradually feel more comfortable with leaving their current jobs. So, employers who continually evaluate their compensation levels in order to remain competitive are more likely to retain their staff. As an employer, how do you prepare for these discussions?
Having a dialogue with the members of your team to discuss their objectives and career paths may help determine training opportunities to help them reach their professional goals. If an employee’s job description has changed over the years or additional responsibilities have been added, that’s a good indication that it’s time for a discussion. Sometimes these discussions will reveal that an employee is interested in moving on to another department to gain additional experience, even if it is a lateral move with regards to compensation. Remember that maintaining great employees is a vital part of running your business.
If it’s not in your company’s budget to allow for salary increases, there are other incentives to offer your employees that may help retain them. More paid time off such as additional vacation days, sick days or personal days could be an attractive addition to an employee’s benefit package. Giving employees the option to work from home in certain circumstances or change their office hours slightly to be more accommodating of their work/life balance is another option to consider.
Being prepared for any raise or promotion requests can only make you a better manager. Evaluating job descriptions and compensation levels is crucial while growing a business. New Focus HR can help you with any compensation questions or concerns you may have to be more prepared in 2015.
Written by: Kristen Deutsch, M.B.A., CCP