A Case for Open Discussion Around Pay and Salary
by Mashum Mollah Finance 24 September 2020
How are the topics of salaries handled in your business? Do you welcome open and clear conversations with staff together, or do you prefer to opt for one-to-one discussions behind closed doors? For too long the topics of salary and may have been considered a no-no in the workplace and this isn’t for the benefit of the employee – far from it.
The idea behind keeping talk of salary as ‘forbidden’ is often put in place or encouraged to help the employer pay people differently – even if they are fulfilling the same or similar roles. This often falls down to certain employers being more outspoken than others and having the confidence to ask for a pay rise where they are fulfilling their responsibilities. But where they can, many employers would rather pay just the outspoken individual what they believe their role is worth, rather than get all staff together and work out a fairer pay bracket for all.
The Effect of Not Talking About Salary
Employers that have managed to quell discussion around salaries often see much higher turnover than those who encourage open conversation around pay. Staff feels unappreciated, taken advantage of, or simply fed up about not being heard or fairly compensated for their work and end up going somewhere that will offer them what they want. This has also led to greater inequality of pay between genders, races, and ages – when really pay should be dependent on experience, the capability of growth, and level of responsibility. If you are concerned your staffing levels and turnover are directly affected by inequality in pay. Consider investing in an equal pay audit from a qualified and experienced pay review company such as PayData.
The Benefit of Talking About Pay
Every member of staff wants to grow and develop, particularly where their salary is concerned. Some staff is happy to keep a similar level of responsibility and simply receive a pay rise in line with inflation year after year. However, the vast majority want to gain new skills, further responsibilities, and grow their salary potential. By encouraging an open discussion around salary, the staff understands what skills and certain responsibilities are worth.
For example, say you have two members of staff that start at the same time at the same wage level but one refuses to take on further responsibility and the other relishes in growing their skill set. The member of staff that takes on additional responsibilities will obviously see reward and this will encourage them further, whereas the other team member is going to be left at the starting rate.
If this was kept secret, the staff member that doesn’t wish to grow might see one staff member being rewarded but won’t quite understand what it is that has led to that reward, causing unhappiness and resentment among team members. If, however, this is an open discussion as a team – every staff member can understand that if they expand their role they have more salary potential. This can be further detailed by creating pay brackets that staff move through as they try different responsibilities and expand their ability within the company.
The staff that understands how they can progress in a company are more willing to do so and can see rewards and achievements that closer within reach, encouraging them to work harder.
Pay Reviews & Industry Pay
We understand that pay and salary is a sensitive topic, it’s often the greatest or second-highest outgoing for businesses, and trying to reward hard workers while keeping the rest of the team happy can be a hard balance to strike. Equal pay reviews aren’t the only option for checking you are compensating staff fairly but you can also invest in pay reviews or industry salary benchmarking. Industry salary benchmarking compares your business with your competitors and can help you attract and retain talent that would otherwise choose a competitor over you for salary reasons.
By informing yourself and being open with your staff, you will build better staff loyalty than trying to keep everyone in the dark. Not only loyalty, but you’ll also see improved productivity and less turnover in general. Start building better relationships with your staff today.