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The “S” Word: Let’s Talk Salary

Let’s talk salary. In other words, let’s get uncomfortable. When your employees want a raise, or you’ve reached that point in the interview process, the conversation can get a little awkward and cause a disconnect. But it doesn’t have to be that way. Money is a necessary part of life, and with inflation, accomplishments, seniority, and hard times, salary is destined to fluctuate. You’re going to need to talk about it.

Money is more than just money. It’s a new house, or medical expenses. It’s a shiny red bike or college tuition. This makes the conversation carry a lot of weight. Whether you’re interviewing a candidate or talking with a familiar employee, the potential of this conversation can create a lot of change. And change paired with confrontation makes people nervous.

We’ve compiled a few tips that can help remove the stigma of the “S Word,” so you can have freer conversations and approach a resolution that you are both comfortable with.

It’s a Responsibility

When your employees go online for guidance on how to talk to you about their salary, they’re seeing slight variations of the same piece of advice: tiptoe around the question until the manager makes the first move. They’re looking for your leadership, and they shouldn’t be the ones to initiate the conversation.

The Harvard Business Review recommends that you, as the manager, be the one to start the conversation early, preferably at the beginning of every year. Talk about what they can expect if they do or do not meet goals, and how it relates to compensation decisions. This creates mutual accountability for the outcome. The more often you have this conversation, the easier it will be. This also means that there will be fewer surprises when it comes time for raises and bonuses.

As a manager, you should know what the accepted salary range is, what your department salary budget is, and what you can and can’t offer to employees. If you are not equipped with any of this information, do some investigating. Many managers will come to realize they have little to no control over the salaries offered in their department. Even if this is the case, you should still be the one your employee can feel comfortable talking to about salary, and the conversation should be initiated by you.

It’s a Conversation

Recognize salary talk as a conversation. A conversation requires an active engagement of listening, discussing, and considering. If your employee or candidate has done their research, they may bring new information to your attention. If they have a proposal, take an appropriate amount of time to consider it (Don’t answer immediately, but don’t drag your heels). As a manager, it is your duty to take this information objectively, and to represent and support your employees if warranted. Earnest communication shows your employees and candidates that you value them.

Inc., Forbes, and Quandora all report similar versions of what employees desire from their employers; but “feeling important/ valued” beats out wages every single time. Use the conversation as an opportunity to communicate their importance, whether they’re getting a raise or not. A bonus or raise is not the only indicator of value. Initiating the conversation shows that you value and respect them, and directly recognizing them can take the gesture even further. Don’t let them feel unnoticed and unappreciated.

Do NOT pair a salary talk with a performance review, or you may risk employees solely focusing on compensation. A performance review should only concentrate on how they perform their role and how they can be equipped or positioned to do it better.

It’s Business

The conversation does not have to be all warm fuzzies (it is a business discussion after all). Be prepared to deliver an explanation, and arrive to the discussion with a plan. If you’re giving a raise, talk to them about the impact they’ve had. The Harvard Business Journal says to never let the raise speak for itself. Always have a brief conversation about why they are receiving the raise.

If you can’t/won’t provide a salary raise, reference back to the discussion you had earlier about their goals and expectations. Discuss external factors and limitations, including HR, finances, and the nature of the industry. When you discuss external factors, do it with the intention of being transparent and honest, not to make excuses or place blame.

For employees and candidates, external factors include the competition. According to PayScale, the main reason people leave medium and large organizations is for better compensation. Look into what your competitors are offering for comparable positions. Websites like glassdoor. com allow past and present employees to anonymously disclose their salaries for certain positions.

Keep in mind, compensation isn’t limited to the paycheck. When it comes to your top performers, or those candidates that you just can’t live without, offer benefits or perks to bridge the gap; but don’t forget to continue to pair this with an explanation.

But It’s not a Secret

While salaries are a confidential matter for an employee, the process used to derive fair, competitive salary ranges should involve a strategic process.

The Harvard Business Journal suggests involving others in the salary research and review. A manager could gain new insight with outside input; while employees can recognize the offer as a more wellrounded solution, rather than a singular opinion of value.

While managers and other executives are welcome to join the conversation, employees should not. Peer-to-peer salary conversations can decrease morale and evoke feelings of jealousy and inequity. Even though you want to erase the stigma of manager-to-employee salary talk, it’s best to neither discourage nor promote salary discussions amongst employees.

Beware of the phrase, “Don’t tell your coworkers how much you’re getting paid.” Telling your employees any variation of this phrase is illegal. The National Labor Relations Act of 1935 protects workers’ rights to gather and discuss work related matters, including wages. Forbidding discussions like this can result in legal action.

Although most employees prefer not to discuss their pay with their peers, it is better to foster an environment where employees will not feel it is necessary. Human Resources experts at Insperity say that part of fostering a positive working relationship with employees includes fair pay for everyone, helping employees understand salary ranges and job potential, conducting internal surveys, and encouraging employees to discuss salary concerns with their manager or HR.

Talking about salary doesn’t have to be uncomfortable. It’s a necessary part of life and business. But the more often you talk about it, the easier it will get. You’re not assigning a numeric value to a person, you’re communicating value. It’s an opportunity to help your employees improve.

At Roth Staffing Companies, we are passionate about making life better for the people we serve, and we’re happy to help in any way we can. If you do need salary research data to start the discussion, contact your local branch for one of our exclusive salary guides.