In The Workplace

I’m the human resources manager of a medium-sized company. Despite the pandemic and the scarcity of jobs, we’re losing key personnel to other companies as the workers claim our rates are 20% below the industry average. How do we stem the exodus of our workers, which is averaging 20% in the past two years? — Black Swan.

They say that money doesn’t go as far as it used to. That’s not true. It’s just that more of it goes to other places other than your workplace. Now, to answer your question on how to manage your high turnover rate, you need to consider many factors and, other than compensation policy, even if people tell you that is their reason for leaving.

You need to do an annual morale survey to get a feel for the pulse of your staff. The survey, also known as an organizational climate survey, should target at least 60% of all employees covering any number of areas of concern, including communication programs, work conditions, management style, corporate vision, and of course, salary and benefits.

As I’ve said many times in this space, take the exit interviews with a grain of salt, as resigned workers may not be completely honest in their reasons for leaving. Most of the time, they will hide behind the convenient excuse of “greener pastures.”

The main interest of resigned workers going through the process of exit interviews is to hasten the release of their terminal pay, clearance, and certificate of employment. Also, those who have decided to leave will play it safe rather than burn any bridges, in the hope of getting a favorable recommendation during a background investigation.

In some cases, resigned workers will not burn bridges should they someday want their old job back, typically if the new employer doesn’t work out.

This doesn’t mean you can ignore calls for a review of your salary policy. Do the review if only to ensure it is competitive. The higher, the better, tempered by your capacity to pay the best and the brightest workers. Otherwise, you don’t need to worry about those who perform only the minimum required to keep their jobs.

Treat any questions about compensation as a red flag that must be managed right away. For example, if Peter complains that Mario is receiving more for doing the same job, be patient and explain the reason for the disparity and any company policy that may have led to such a disparity. Maybe the difference is down to merit, and not seniority.

Your organization must in an event be ready to defend the competitiveness of your salary structure. Try exploring any or all of the following approaches:

One, participate in an annual industry salary and benefits survey. Many organizations conduct surveys like this. Consider the ones by the People Management Association of the Philippines, Employers Confederation of the Philippines, Willis Towers Watson, or Mercer. Do your due diligence to vet their expertise and the survey’s methodology. Don’t just go for any type of survey because participating is inexpensive. That’s not the way to look at things. If you won’t pay full value for the quality of service on offer, how does that reflect your attitudes to employee pay?

Two, initiate a benchmarking survey with two or three competitors. This can be difficult, but not impossible. You can initiate talks with your counterparts, preferably from the top five companies in the industry. This may involve hiring a consultant to do the leg work and see to the administrative details, including the interpretation.

If you can’t do this, you can pick one competitor and choose only the key positions and the pay packages you’d like to emulate. These positions include “hot” skills that are difficult to fill. You can settle for three categories of salary —the minimum level, average, and maximum. Perform the exchange of data face to face on a quid pro quo basis.

Last, go on a “fishing expedition” by sending fake job applicants. If you’re serious about finding out the pay and perks offered by competitors, and you can’t get it through the above methods, do this as a last resort. It’s unconventional, but any offers you get in writing can be used to improve your company’s salary structure.

This can backfire. Your applicants could end up accepting the offer. Therefore, this approach is not recommended, unless you want to try it out for yourself, as a gauge of your marketability. What you discover could give you an insight into your company’s competitiveness on salaries.

Because money isn’t everything, do note that jumping from one company to another may hold some unseen danger, such as discovering that workers can’t always get along with new colleagues, even though the pay may be higher.

Therefore, it is best to point out the non-financial advantages of the job that workers may not appreciate or choose to ignore. This includes length of service, convenience (like flexi-time or proximity of the office to home), and the possibility of promotion, but without giving workers false expectations. Much depends on the employee’s particular situation.

Just the same, you as the HR manager could explore ways to tell people that salary alone is not the most important element. They know this, of course, but it will not do any harm to refresh their memory. With that little effort, you might be able to convince unhappy employees that the grass elsewhere may not be as green as it looks from a distance.


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