Hey Employer Cheapskates: Pay Up!

Posted by Bernie Reifkind on December 6, 2010

Are you an employer cheapskate?

Are you paying your very best key employees at the top end of your salary wage scale? 

If not, then most likely you are an employer cheapskate. 

To be fair there are many legitimate reasons for keeping salaries stagnated.  Some businesses are struggling right now and simply cannot afford to pay high wages to their key employees or new hires. 

On the flip side, can you afford to lose a stellar employee to a competitor who can?

Or maybe you delude yourself with the thought that …….America is in a recession and that people should be happy just to have a job.  That is true to a degree.

However that’s a myopic view of business. 

Consider that most of the time, we get what we pay for.  Not just in the case of goods and services, but in human capital.  Sometimes we cheat ourselves by “cheaping out” and paying less- but then we are prone to receive an inferior product or service.  The same can be said with stellar and impactful employees.

Pay up!

Employers: sober up and look beyond just the math.   Are you paying a great wage to a great employee

In addition, if you are hiring, and of course looking for the best talent, are you willing to pay what it takes to attract the very best talent?

Does great pay equal great talent?  Of course not.

On the other hand, if an employee is given the opportunity to shine and responds with exceptional vigor, then one should be rewarded accordingly.

Lets be even more candid.  The health care industry is ripe with high employee turnover.  Employers are constantly complaining (and rightly so) about the high costs associated with employee turnover. 

Employers who pride themselves on keeping salaries at a minimum because they are trying to maximise profits may be doing themselves a great injustice.

This is not to suggest that salary is the most important reason why an employee excels, stays or resigns.  Nor should this imply that people can be bought.

Research tells us that the most important reason why someone stays put or resigns is: their boss.

Human capital is an investment in the future- your future and if you think that rewarding someone with high pay is expensive, consider the exorbinant costs associated with re-hiring someone and re-training. 

Employees who know that they are well paid have better self esteem and thus are more motivated to excel and that leads to high employee morale. 

Oh, and who benefits? 

You.

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