5 Signs You’re Not Paying Your Employees Enough
As a business owner, you know that money doesn’t grow on trees and perhaps being penny-wise has pushed your company to where it is today. Though money is not always the sole or top motivator for employees, it still represents a significant portion of the job satisfaction pie. Pinching pennies when it comes to your employees’ pay never truly pays off and can often cost your company more in the long run – think high turnover, low productivity, and poor employee morale. So how can you tell that you may not be paying your employees enough? Take a look below at these five tell-tale signs:
- Employee griping and complaining
Being underpaid often ranks high on the list of things employees hate about their job. Do your best to be mindful of any griping – especially if it’s coming from your top performers. If money happens to be at the root of their concerns, look for ways to increase compensation. Remember that a happy workforce is a productive workforce.
- Employee responsibilities have increased, pay has not
Whether business has really picked up or you’re trying to get more done with less, increasing your teams’ workload without increasing pay could push them over the edge and eventually into the arms of another employer. Generally speaking, talented employees are willing to go the extra mile for the company they work for so long as their hard work and loyalty doesn’t go unnoticed.
- High employee turnover
Are your employees calling it quits after only a few months on the job? While there may be a multitude of reasons for high turnover, it’s not uncommon for inadequate pay to be the main culprit. Pay increases do cost money, but employee turnover could cost your company more in the form of rehiring, retraining, and retaining a new staff member – up to 150% of an employee’s annual salary in many cases.
- Slow recruitment
If recruitment efforts have been more sluggish than usual, perhaps you’re not offering the right pay or salary level needed to entice new employees. Couple that with Hawaii’s tight talent pool and it’s no wonder you don’t have jobseekers lining up around the block for a chance to work at your company. Consider increasing the starting pay for your open positions and highlighting some of the perks and benefits that come with the job.
- Low employee morale
Your employees’ value to your company goes far beyond how much is listed on their paycheck, but pay is almost always tied to “worth” in the eyes of an employee. An employee that feels underpaid will lack the motivation and drive to perform to their full potential – putting your company at risk for lost productivity and ultimately jeopardizing your bottom line.
In short, it pays to pay your employees well. If you can’t remember the last time you handed out a raise or promoted an employee, now may be the perfect time to revisit your budget. If finances are tight right now, don’t overlook non-monetary incentives that can also help with retention, like flexible work schedules, telecommuting, or relaxed dress codes.