In addition to the added expense, there are a number of other factors to consider when considering salary increases for your employees. Whether or not the addition to your bottom line makes raises feasible, Josh Rampton gives seven other reasons to avoid granting raises in his Entrepreneur article titled “8 Reasons Giving Your Employees a Raise Will Hurt Your Business.”
While salary is one way you recognize employees for their dedication, Rampton says businesses aren’t beholden to the tradition of pay raises. In addition, as younger workers tend to value non-monetary perks like flexibility. Listen to your employees’ wants – this may provide insight for you to add to their quality of life without increasing pay.
Internal concerns aside, such as morale and your ability to hire additional staff members, how employee raises affect your relationships with customers could also be an important factor, as one way to pay for a salary increase is to raise prices. Don’t alienate your customers to the benefit of your employees, Rampton advises.
Elaborating on each of the above points, Rampton also discusses how employee raises can affect your own work-life balance. Finally, he adds, increasing pay based on merit or performance isn’t necessarily going to reinforce employees’ hard work and dedication to your business, stressing there are alternate methods of employee motivation.
Whether to increase employee pay or leave it alone is an important decision for any business owner. Rampton’s advice provides important points of consideration, no matter which way you decide.
Read the full article on Entrepreneur.