So, what do you do when the engineering skills shortage starts hiking up the average market salary above what you pay your employees? Should you address your internal pay structure to reduce the chance of losing valuable assets to your higher paying competitors?
Are you at risk of losing staff?
Once your employees realise they could get a significant pay rise by moving elsewhere, they may start to feel undervalued, or tempted purely by the allure of more money and the changes that they could make to their home life - holidays, giving their children dance/karate lessons, running a new car, paying off debt, indulging their inner geek by buying the latest tech, or just giving them breathing space when it comes to bills.
As an employer, you may do the sums and decide taking the hit with one or two leavers will still cost less then increasing salaries across your workforce, but then you need to take into account the ‘cost’ of losing someone who has built up skills specific to your company. You should also consider the cost of replacing them. If you can fill their role internally - problem solved, knowledge retained, and good succession planning means you shift everyone up and only have to fill a lesser skilled or more junior role. If you’re not so lucky, it is very likely you will need to pay the current market average in order to fill that gap, likely to be more than the person who left in the first place.
What should you consider when recruiting someone new in to the business?
If you come to the decision that you cannot match market salaries, you may need to rethink the skills you need, many are looking to find a rising star – they will need some training/mentoring but should be a huge asset once up and running. Consider other industries, people from different background can bring a completely different set of skills to compliment those you already have, try be more open minded.
Why should someone come and work for you?
According to research carried out on Linked at the end of last year, the main reason people changed their job was for career advancement. Usually, people will only move companies if they have something to gain (relocation and redundancy aside), e.g. more interesting work, more supportive structure, training/further education, higher salary, new industry, better career prospects, more senior role.
Retaining your staff is the best prevention and can he aided by creating more flexible working arrangements and looking at ways to keep them motivated, happy and engaged. I am always speaking to clients to encourage the RIGHT hire, if you can align someone’s aspirations/passions etc with your company, culture and future prospects then they are far more likely to stay.
If people love the company they work for, they will be less tempted to leave just for more money.
• Can you incentivise the package by offering further education, i.e. gaining a Degree/HND as part of the salary package? This won’t upset your internal structure but could be a reason for someone to take a lower salary.
• Consider adding a performance bonus
• Succession planning – show them how they can progress, don’t just tell them there are opportunities, what are these opportunities.
• Sell your company culture, your working environment, your ethics. Let them have a chat with existing staff to get a feel for what working there is really like.
• You could write in a salary review at the end of their probation period
• Writing a new job specification or introducing a new pay grade will help you justify a newcomer with a higher salary.
• Offer flexible working hours, training allowance, birthday bank holidays…be different.
If you ignore the trends and hope your employees stay where they are, you run the risk of losing some of your best people to other companies or not being able to hire the exact skills you need, and this, will eventually affect your business.
A good place to start is with a salary review of your main roles, ask your recruitment partners to benchmark the current market average to see where you sit with salaries in your area. Look online to see what your competitors are paying, this is what your staff will see. At least then you will be armed with the right knowledge and can make an informed decision on what is best for your business.
If you’d like to get in touch then contact me on Linked In, email me at [email protected] or call me on 023-9245 3377.