Employee retention is an important part of a well-run business. You simply can’t afford to let your top talent walk out the door. But when should you increase your employees’ salary so they stay put rather than look for positions elsewhere? Here’s some advice as well as tips on effectively negotiating salary with your top employees.
The common reason it makes sense to negotiate salary is when there’s a top performer who’s considering leaving because they’ve been offered a higher salary elsewhere. Whenever there’s someone who’s an absolute linchpin to your operations and has demonstrated their value time and time again, they’re obviously an asset.
This is the type of person you can’t simply replace by making a new hire, especially if they have years of experience under their belt. In this case, you’ll most definitely want to negotiate their salary and take every possible measure to get them to stay.
Advice on Negotiation
It’s important to note that handling negotiations with existing top employees is different than dealing with new hires. These employees have already proven their worth and have inherent leverage that unproven new hires lack. As an article from Smart Business Magazine points out, “Negotiating a salary increase requires research, industry analysis, knowledge of economic trends and professionalism.”
Before you meet with an employee, be sure to put in the research on current pay in your industry. This resource from The Bureau of Labor Statistics offers up-to-date information on major industries. Also analyze current trends to determine if there are likely to be any noticeable shifts in average pay over the next three to five years.
Be sure to have a specific salary range in mind, and know how far you’re willing to raise it to keep a top performer around. Once you know how much wiggle room you have, go ahead and meet with your employee to discuss the situation. Be respectful and hear what they have to say, and allow them to present their case.
Then explain your company’s position, and discuss how far you’re willing to go based on the tangible data you’ve generated from research. With any luck, you’ll be able to strike a deal that’s mutually beneficial for both parties and leaves both sides feeling good about the situation. But if your top performer’s demands are just too steep, you may have to refuse and leave it up to them whether or not they want to stay.
The stakes are high when negotiating salary with your top employees. Proper research and assessing the person’s value are essential. By arming yourself with data, you’ll be in the best possible position for a positive outcome.
Looking for dedicated employees to fill a position? Contact PrideStaff DFW today and let our team of recruiters take care of it.