Solomon Bruce Consulting Blog

Thursday, January 17, 2013

That is the Salary I made 30 years ago!

     An individual told our consultant the title to this post today.  The individual had just left a non-profit institution where she was making a salary in the mid $50,000 range.  What was interesting was that she was close to retirement and needed some additional money for retirement.  She told her boss that she needed more money or she would have to seek another position.  Her supervisor understood the concern, but could not meet the individuals salary requirements.  The individual left and found another position that met her salary needs.
      Here is the interesting point.  The non-profit institution has now gone through about 4 new employees since this individual left.  New employees were hired, did not work out and were released during the probationary employment period.  The cost of hiring the new employees were substantially more than the increase in salary that the original individual requested.  What is also not addressed is the turmoil and confusion caused by having to train and hire 4 new employees in a relatively short period of time.
       When you have an employee that is a loyal, dedicated individual who has had a good performance record, it is sometimes difficult not to think twice when that individual asks for a salary increase.  Although it may appear to be excessive or higher than you may wish to pay, one has to think about the turmoil and other costs that may be incurred if new employees are hired and do not work out.
        It is often times cheaper, both financially, emotionally and functionally to grant a great employee a salary increase than to have to go through hiring a series of replacement employees who don't work out and have to be released. 
        Think long and hard about saying "NO" to a salary increase if the employee has served you well.  You may find that the salary increase is actually cheaper than going through the whole hiring process.