One of the most common issues facing businesses at this time is the shortage of people with great attitude and specific skills. With the lowest unemployment rate for decades and the highest level of unfilled vacancies there is a noticeable increase in salary levels being offered by potential employers.
Not only that but good people are being personally targeted daily to accept sometimes vast salary increases to persuade them to jump ship.
Each of the following examples is different but is affected in some way by the coin-operated question:
No 1 example. Talking recently to a member of my Vistage peer group employing around 300, it transpired that he had three issues with promotion and recruiting new people.
One of his top young team members, very personable, great attitude, had been offered a salary increase of more than £15K over his current earnings to persuade him to move. After discussions he said that he was happy with his job, his colleagues and his career opportunities and had decided to stay.
Example No 2. The company had made a decision to split one of the major functions in the business and had offered the opportunity of one of them to the present incumbent, a 12 year tenure team member at the same salary while recruiting for the other new role.
He had fulfilled that role previously and very effectively and this point was stressed. There would be no loss of seniority but he chose to regard it as a demotion and requested a pay increase to compensate.
Example No 3. Recruitment of a potential team member to fill the other role under the same terms and conditions went ahead. One candidate seemed very suitable, coming from a larger company now in administration and was very enthusiastic about the potential and the culture of the company.
However he came back a week later to say that he had another offer for a short term appointment at 20% higher salary.
Example No 4. In a professional practice a highly regarded team member gave in his notice having been offered a position at a higher salary plus a car. The new company was a contractor and the conditions of employment would b manifestly different from those of the professional practice. He persisted however and left the practice.
None of examples are unusual in this climate. A very good friend of mine always believes , somewhat cynically perhaps, that people are coin-operated and higher salaries will always get the best people.
I beg to differ. If an employee moves for enhanced income then we need to ask ourselves a few questions. For example, what differential has persuaded him/her to move? Are we paying market rates? What are the true career prospects? What are the reasons for looking for a new position in the first place? What effect would keeping him/her on a raised salary have on the other people in the business?
There is no doubt that a proportion of good people will move to increase their income and that has to be accepted. However if the other features of their employment are sufficiently significant to them then salary becomes less of an obvious feature.
It is said that motivation by salary lasts for one month (or even week). After that change is not noticed unless it is exceptional. Other factors such as intangible rewards, recognition of performance, self-achievement, and a positive culture are far more persuasive.
Leadership guru Dan Pink suggests that leaders need to offer three features to the team as follows:
Autonomy. That which allows, indeed demands, that people are sufficiently trusted to do their jobs without the need to be micro-managed
Mastery. The freedom to develop from being adequate in performance to being exceptional
Purpose. Knowing where one is going, knowing where the business is going, and knowing that they are a trusted factor in the ultimate success of the organisation.
Offering those factors to your existing and potential employees can have a material effect in mitigating the salary issue.
Visit the Vistage UK website