It’s not always for the right reason but sometimes no matter what you do, it’s inevitable.
Working conditions, salary level, conflict among staff, moving to a new location, career progression not available, head-hunted, recognition and reward above salary, lack of autonomy, respect and more could be sited as reasons.
As a small business owner, management, leadership and continuous communication with staff is not easy within the total demands of your business. We don’t always get it right either. And that’s OK, as long as we learn and improve.
What happens every day – you just don’t see it
Recently a client called to discuss a staff member who approached them to respectfully challenge their remuneration package.
“The catalyst was an advert on Seek. Where can employees gain misinformation? One place is a job advert!”
Trying to put myself in the employees shoes, the spin going through my head could include:
I’m being underpaid and if so, the employer doesn’t value my effort. That extra money would go a long way to reducing my HECs debt or give me that surf trip I want to the Mentawais next year! I wonder if the rest of the team are being paid more than me? I know I put in as much time and effort as everyone else. My employer just spent 5 weeks overseas on what looked like a great trip after the dealer conference. I’m probably paying for that. I wonder if there is a future for me in the business?
This employer was a recipient of the recently released national remuneration study completed by ZRC in conjunction with Griffith University. We spent the time further interrogating the information available for CSO’s including salary, superannuation, bonus entitlements and other benefits (including education and training).
What became clear was that the package and support our client was providing was competitive and above the averages as illustrated in the research findings (in fact 15% above). The question he therefore asked was:
“How could this other firm be paying what seems well above market?”
Well maybe that potential employer is paying above market. But in many circumstances it’s just not the case.
You see, recruitment firms will sometimes advertise well above market to encourage candidates to pick up the phone. As a recruitment and consulting business, we do not advocate this approach but unfortunately it’s what is done. The employee will call, the recruiter will then have the opportunity to influence them to consider options.
“that role is more senior than your experience however……” or “the role is filled but you may like to consider this option”
To the credit of this particular staff member (and what I believe was also a reflection of the employers communication style), he approached the employer. However, many won’t and not always because of the employee.
“As an employer, you also need to create the open environment that allows staff the comfort to raise concerns.”
The employer sat and illustrated their package using this independent third party research to validate the employees current package and gave him the opportunity to raise other concerns. The outcome was positive and he was retained in the business.
The cost of doing nothing
Having validate data at hand, planning for these potential circumstances and learning how to best manage and lead your staff through open communication is the solution.
Remuneration research that supports your understanding of the market can be cost effective. Ensuring resourcing plans are included in your ongoing business planning process and attending appropriate education and training beyond your financial planning CPD may be necessary.
“The cost of doing nothing and losing a team member is far greater than the cost of retaining them.”
How you (and if you engage a good recruitment firm) represent your business will ultimately have an impact on how you are perceived by future employees and the market in general.
Action Steps
It’s far better to retain a good staff member than need to replace them. Consider the cost associated with the steps below (fixed costs, your time, staff time, lost productivity).
This excludes the additional emotional impact through pressure on existing staff and time to train and develop the new staff member.
Within The Business of Advice, there is significant data to support an employers’ understanding of remuneration packages and structures in the financial planning industry.
In addition, we will soon provide additional tools and methodology to improve your own recruitment process within the web based portal.
