Often as our time with a company increases the true value of what we bring to the party is swept under the table. You may wonder what I am on about so let me explain.
Employee Tom is a fictional report writer for company CA. He has worked there for 3 years and knows the company inside out. He is a little bored with his job, but is reasonably happy with his salary. He started on 50K and because of small increments over the last 3 years is now on 58K.
Employee Tom notices a job that interests him greatly and is paying 60K (Not an unreasonable expectation in today’s job market.) He hands in his notice, is not going to be talked out of leaving so goes and works for company CB.
Now company CA have to hire someone to replace him. The job Tom was capable of doing 3 years down the track is roughly twice what he started doing, and he has soaked up extra work load over this time. As the backlog of work starts to pile up company CA start to panic and end up advertising the job at 65K per annum. The person they hire is of a good standard and picks up on the job quickly however it is still 12 months before they are even nearly up to the speed of Employee EA.
Lets look at what it has cost the company…
Recruitment expenses of hiring new employee $5000
Training and year of only 60 – 70 % productivity $20000
Extra amount of salary offered to attract staff member $7000
This is a conservative estimate and would of course vary between different job types and companies, however I do not believe it is over the top by any means. This adds up to a staggering $32000 over one year and I believe could have been avoided.
When dishing out pay rises if you are an employer have a look at the environment you are asking people to work in. If it is highly specialised and relatively complicated the cost of losing good staff is going to be immense. So when the pay rise comes around think about every year the staff member has been there learning your systems as a sizable investment. An investment that will probably go walkabout if it is not nurtured and taken care of.
A decent pay rise every year could quite possibly result in highly trained, capable and experience loyal staff that know your companies systems and policies inside out! Imagine that. Staff that don’t perform will need to be given notice that they are missing out, and they will either pick up the game or get annoyed and move on.
Something to think about anyway, if you are either an Employee or Employer.
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