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Strategies for Maximising Salary Reviews in a Competitive Job Market

We are coming to that time of year when many organisations are planning their salary reviews for the next financial year. Employees, on the other hand, are anticipating their up-coming salary reviews, and setting their expectations.

Generally, key factors dictating salary rises include employee performance, role changes or career progression, growth potential, and of course the job market & economy.

But what happens when expectations and reality are at odds – the perfect storm?

Currently, we are almost in what could be described as the perfect storm:

• Despite the threat of recession, demand for quality employees remains high with supply at all-time lows, as reflected in unemployment figures.
• Families are feeling the pressure of rising living costs, seeking opportunities to increase their income and reduce financial stress.
• Despite inflationary pressures, some employees are exploring more flexible work arrangements, putting a stress on supply.
• Social media platforms are bombarding individuals with opportunities to seek employment alternatives.
• More businesses and recruiters are even approaching individuals directly to tempt them into exploring greener pastures.

As a result, forecasters predict that employees are expecting significantly higher salary increases, regardless of eligibility for a career progression increase, or what their performance has been.

So, what can businesses do in such a challenging environment?

With such pressures, it is crucial for businesses to have a smart and targeted compensation strategy, that is still perceived as fair. Recent surveys have clearly shown that employees are looking for more than employers are expecting to pay, so effective communication is key.

Surprisingly, nearly half the employees who have changed workplaces during the ‘great resignation’ have not necessarily been satisfied with the outcomes of their move.

To become an ‘Employer of Choice’ and maximize your salary review outcomes for this financial year, consider the following tips:

1. Know your market.

Research is essential. Understand what your competitors are offering by referring to sources such as Hays Salary Guide, to obtain salary benchmarks by position and location. Additionally, consider asking some of your peers. If you are in a coaching circle or other peer networks, share your thoughts and ideas with those you trust to get a comprehensive and broad picture of salary parameters.  

• Target your salaries.

There are always the team members that you don’t want to lose. Whether they have shown exceptional growth potential, received significant investment in their development, or play a critical role that is hard to replace, ensure they are well taken care of. Whilst salary reviews should be objectively applied, there may be some team members you will never satisfy. In this case, you may prefer to divert your salaries strategically toward those you know are loyal, and that you really want to retain.

• Know & communicate the benefits of working for you

It is important that you emphasise a holistic picture of benefits when you deliver salary reviews, particularly now when they may be assessing the ‘stay’ benefits against ‘go elsewhere’ alternatives. Often, team members forget the benefits they receive in addition to their salary, such as:

• Training, learning & development
• Formal career path opportunities
• Flexible leave arrangements, including paid or unpaid leave opportunities
• WFH equipment and/or set-up costs
• Company cars, onsite parking or car allowance
• Financial support for professional studies (and/or leave)
• Share incentives or bonus schemes
• Location
• Social connectedness and culture
• Hybrid WFH opportunities
• Loyalty schemes

Beyond stating them, quantifying benefits by placing $ values can further illustrate a higher gross remuneration package that will appear more impressive to your team members.

• Be flexible

Different employees may find certain benefits more appealing than others. Consider adjusting benefits to make the overall package more attractive to quality team members seeking higher increases.

• Prioritise Transparency & fairness

Ensure your salary review process is transparent and perceived as fair. Establish clear performance measures, career maps, learning and developmental growth expectations and regular feedback.

Remember, salary reviews are just one piece of the puzzle when it comes to culture and talent management strategies. In today’s competitive landscape, businesses must compete for scarce human resources. Savvy employees seek out employers of choice and will stay with the businesses that meet their needs.

At Balanced Scoreboard, we understand the specific challenges faced by small to medium sized professional service practices. We the understand the pressure on current leaders to proactively attend to recognition, rewards, and employee engagement. Our industry specific expertise can give you the professional edge that attracts and retains quality people.

Contact Balanced Scoreboard to learn more about how we can deliver and implement a program for recognising, retaining, and rewarding your greatest asset, your people. Transform your good team into a great team with our tailored Talent Management Strategies.

For further information, enquire today via our contact form at Contact – Balanced Scoreboard

You can also view our Blog ‘Why Balanced Scoreboard’ to see what a Talent Management Strategy includes.