High-performance employees are in high-demand across all industries so although it’s sometimes unexpected when a top performer submits their resignation, it’s easy to understand how they received a good offer. Given how expensive it is to replace somebody new — recruiting, onboarding, etc. — every employer would rather keep their best employees rather than lose them to the competition.
A common yet controversial strategy spoken of in all organizations is the counter-offer. When an employee quits, should you offer them more money in hopes they will stay? Some will say this is just a band-aid to a problem, and won’t last, leaving you in a similar predicament a few months down the line. Others will tell you counter-offers hurt relationships between managers, employees and team members. Still, many managers see a counter-offer as a necessary evil to keep talent and trade secrets in the company. Before making a counter-offer to an employee, ask yourself these questions:
- Is the person just bluffing about their offer?
- Why exactly have they decided to leave? Is this a problem beyond salary that a counter offer won’t really fix?
- What additional promises, such as promotions or future projects are you going to have to make?
- Will that person now “own” you in the future?
- If you counter-offer this person, will other employees consider you weak and start playing the same game?
- Are you going to be obligated to give a raise to others due to payroll policies?
- Are there non-financial benefits you can offer?
- Is there anybody internally who could get up to speed quickly?
- Will they agree to a “handover” period and stick around until the replacement is up-to-speed?
- What is your limit?
Answers to all of these questions will vary considerably and will have different meanings to different companies, depending on priorities and strategy. Remember to carefully consider all of the consequences of a counter-offer and discuss it with other managers. After all, you may be setting a precedent that is hard to follow.
Many of us have heard the Ontario Government’s new plan to have minimum wage raised to $15/hour by 2019. In fact, the Government of Alberta also has planned to raise rates to $15/hour in 2018 and many have suggested that other provinces will follow suit. These planned increases have led to very diverse opinions from businesses across Canada as many believe that this new expense will negatively impact corporations, with the potential to ruin them.
At first, it might seem that there are a lot of downsides to drastically raising the minimum wage up a couple dollars. However, there can be various benefits to having higher wages that can improve your business such as: motivating employees to work harder, attracting more productive workers, minimizing disciplinary issues, enhancing quality & customer service, and much more! In addition, higher wages can lead to lower turnover resulting in reduction hiring and training costs.
In short, some changes will most likely need to be made to your business and hiring process to accommodate these new minimum wage increases. However, in the end, it comes down to one question; will my business be able to afford the minimum wage increase?
According to this Globe and Mail article, it would be in every business’ best interest to do some early research and preparation. Here are a few measures they suggest to ensure that your business is ready when the new minimum wage legislation come into place:
- Conduct an audit. Start with an audit to help determine if the new wage legislation is properly arranged with your business plan and structure.
- Determine the scope. By taking a look at the salaries your current employees earn, you may find most of your employees already are already earning $15/hour. Figure out how many employees will be impacted by an increased minimum wage.
- Determine the job worth. Separately reviewing each job role to see if any alterations in responsibility needs to be established. A change in responsibility and review of the impact of each role might mean creating different roles with different pay scales.
- Create a new pay grid. Once you have collected all your information, start building a new pay grid with ranges in salary.
- Communicate any upcoming changes early and try to be as clear as possible! This will help avoid misunderstandings or confusion that may arise with employees, or customers that are involved in your business.
All in all, every business should be able to survive the minimum wage increase as long as they take the time to do some advanced planning!