There has been a power shift. With so many jobs available and companies struggling to retain current employees, jobseekers are finding they have more leverage when seeking out new roles. This dynamic is driving companies to rethink their policies and benefits and it is creating a new way of working – none of which are bad things. But do employees have to seek out new jobs or resign before they can get the benefits they want or is there another way?
One aspect that is impacting companies and employees alike, is that as salaries become more competitive for new employees, it’s raising questions on whether current employee salaries should be raised to match.
Many companies, realising the value in retaining existing employees have done this of their own accord and it’s making a big impact. On the other side of the coin, more conservative companies fear that if matching salaries for existing employees becomes the norm, it’ll raise operating costs beyond what they can afford in the long term. There’s some validity to both arguments, here are two considerations when debating this topic:
- The value of employee retention
It’s common knowledge that it’s significantly more expensive to hire new employees than retain existing ones. This is one of the reason’s it’s so important to hire right from the start. But the cost differential doesn’t only relate to having to offer competitive salaries and pay hiring fees. When employees exit they take with them a wealth of knowledge of the company and industry, as well as productive technical expertise. It can take several months before new hires start operating at that same level of proficiency. Sometimes the level of skills and knowledge lost can never be replaced. For companies operating in niche sectors where expertise is gold, it’s well worth considering raising existing employee salaries to match those of new hires.
- Attracting the best expertise
One of the most attractive factors for job seekers is knowing that they will be valued. When companies take proactive measures to retain their existing employees it sends a strong message out in the marketplace: This is a company that looks after its employees. It increases the attractiveness of the company as an employer and makes it a magnet for top talent.
A new culture of working is emerging, one that is hybrid, flexible and focused more on employees. Proactively taking steps to show employees that they’re valued is never a bad thing.