"The market rates are rising so quickly, and companies are understandably keeping track of these rates when they bring in new talent, but they aren't being proactive about bringing everyone on their teams up to that same compensation level. That's a recipe for disaster. You will have lost all the goodwill in that relationship; they've already disengaged, they're looking for better opportunities, and they have gone through the emotional turmoil of searching for a new job. You simply cannot wait until your talent comes to you and says, 'I got a competing offer'," he says.
Making the investment in talent
Companies don't necessarily have to pay top-of-market rates, either. The recent Gallup State of the American Workforce study shows that 37 percent of the more than 195,000 professionals surveyed would leave for a salary increase of 20 percent or less; offering any kind of compensation boost goes a long way toward fostering engagement and loyalty, says Jennifer Selden, regional recruiting director for Randstad Technologies.
"Salary is still the biggest driver for talent when looking for new roles, but it's also important to know what's important to your audience. Work-life balance? Location? Remote work? Is talent interested in your brand, your mission, your values? Are there opportunities to work with cutting-edge technologies? What other factors can you use to incentivize your talent?" Selden says.
This is especially important in off-metro areas where cost of living is lower and therefore salaries aren't as exorbitant, she adds. In those cases, employers and employees must have open and honest discussions about what the market will bear and what skills and experience are worth, Selden says.
"Off-metro sourcing and remote work can open up lots of other talent pools, but the employer and employee are both responsible for making certain compromises when it comes to salary, benefits and compensation packages that are adequate for what the geographic market can bear," she says.
It can be as simple as acknowledging that your technical and engineering talent is underpaid relative to the market and offering an increase as a show of good faith, says Bolte, even if you can't budget for top-of-the-range increases.
"It makes a huge, huge impact for your employees if you can say, 'We realize the market has moved past where you are, salary-wise, and we value you. We can bring you up 'X far;' -- That's huge. Just being open and transparent, so your workforce knows that you're looking out for them and you are invested in keeping them on," Bolte says.
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