Keeping Up With Pay Raises Can Help Keep Your Staff Onboard
In March of this year, inflation hit a 40-year high. Americas are enduring price surges in gasoline, food, and other essentials, making it difficult for many to make ends meet. Simultaneously, many workers are quitting their jobs in search of better employment opportunities at record rates. A study conducted by the Pew Research Center found that 63 percent of workers who quit their jobs cited low pay as the reason they left their position.
As an employer or business leader, it is important to keep these issues in mind. Staffing shortages can dramatically impact your business’s success both in the short term and the long term. Happy employees are loyal to their employer, work harder, and are less likely to leave the company. Furthermore, employees who are satisfied with their pay rate, job expectations, and work conditions are less likely to file claims against their employer.
Employers seeking to improve employee retention must acknowledge the effect inflation and rising expenses have on employees. Regular pay raises can go a long way to keeping employees satisfied and reducing turnover.
Employee Retention During the Great Resignation
Employee turnover is expensive. The cost of replacing an employee varies by industry and position. However, studies show that the value of lost production combined with hiring and training a new employee can cost a company 90 percent to 200 percent of the worker’s salary. High turnover rates can also negatively impact employee morale and the overall efficiency of the workforce.
Employers who want to prevent staff from leaving may be struggling to deal with rising expenses themselves. Many employers would love nothing more than to raise salaries for their hardworking employees, but their company is already struggling to keep up with the increased costs of goods and services. However, when an employer factors in the value of lost production, the detrimental effect high turnover has on the company culture, and the expenses associated with hiring and training new employees, the employer may realize that regular pay raises are actually the cheaper option.
Bonuses and incentives are another great way to show employees that you value their contribution to the company and will reward them for their loyalty. Non-financial incentives can come in the form of increased work-from-home opportunities, more flexibility, and recognition of outstanding employee performance.
Contact a Naperville Business Law Attorney
Employers across the country are dealing with the effects of the Great Resignation. Business leaders must find creative solutions to retain quality employees and reduce turnover. At the Gierach Law Firm, we help business owners with business formation, contract drafting and review, legal disputes, succession planning, and much more. Call our skilled Naperville business law attorneys at 630-756-1160 today for a confidential consultation.
Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.