Facing the Salary Reality May 2024

Quite frequently, CEOs express a concern about the high salary demands of staff members.? To the concerned CEOs, such employee expectations seem unreasonable, self-centered, and destructive to the operation of their companies.? My reply is usually non-consoling: Learn to live with it, I suggest.? Here is why.

History

In 1939 my parents bought our three-story home for $3,000.? I bought my first home for $29,000; today it is worth more than $1 million.? We all can look back and see the inflationary trend.? It never went down; yet we all have survived.? We have more than survived.? We may look back fondly to the good old days, but we have far more goods available to us today than any time in the past.

Concern over Prices

A typical CEO reaction is that their catering to salary demands will force higher prices that would make their businesses non-competitive.? What nonsense!? Everybody is undergoing the same inflationary pressures and if they don’t respond today, they will have to respond tomorrow, and in the meantime, lose good people unnecessarily.

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Appreciation

In the list of business concerns for employees, # 1 is possessing the sense of having control over the personal work domain; # 2 is to feel appreciated by the superior.? If the employee’s pay is not adequate, that individual certainly will not feel appreciated.

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Reasonableness

Personally, I have never found employees to be unreasonable regarding salaries.? A CEO should pay attention to salaries and their escalation.? Study what is going on, so that you will not be surprised by this largest expense of your business.?

Unreasonable Demand

Once in a while, one of your key players may receive an outside offer that is well beyond your current salary scale.? In that case, you have to let the person go.

This year, the all-star Canadian Football League player Willie Jefferson, of the Winnipeg Blue Bombers, was made an offer by another team that quite surpassed what Winnipeg felt they could afford.? Winnipeg had been so successful over the past five years with a coterie of all-star players, it was easy to see that they could no longer afford to keep them all.? Jefferson made his decision to refuse the higher offer and stay with Winnipeg.? He even publicly advocated to junior players in the league to place value on the positives associated with their current status and not jump automatically to the highest salary offer.

Be Proactive

It is very stressful for an employee to ask for a raise, and if it comes to that, I suggest that you have not been doing your job properly.

Regular Reviews

Salary reviews should occur at least once a year, with dates clearly established for that event.?

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Raising your Prices

If salaries go up, you will have to raise your prices as a business necessity.? If not now, you will have to do so eventually.? You may not like it, but inflationary pressures will make you and your competitors raise prices.? Look back to your prices of five years ago to see the inevitable trend.

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Salary Tables

Salary tables allow employees to know what to expect at salary-review time.? One master table, which should be public knowledge in the company, serves everyone.? Different work categories would have specific salary levels.? That base amount has to be changed every year, to deal with inflation.

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????Thus, a regular performer with 5 years’ experience would earn 110% of $100,000 = $110,000.

A high-performing person with 7 years’ experience would earn 128% of $100,000 = $128,000.

And stop worrying about salaries.

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