Recruitment blog

To the blog
Talking about pay with your employees
27 March 2018, by Level Recruitment

Talking about pay with your employees

Are you dreading talking about pay with your employees? You may have been allocated a pot that is not enough, have a team member who is unwilling to compromise or perhaps you just find it a challenging subject. In this blog post, we give our best tips on how to defuse the tension in the dialogue – it should not be necessary to be drawn into a salary negotiation.

Futile discussion because there is not enough in the pot?

Be transparent and honest with your team member. Has the company’s collective agreement limited you with a pot? Discuss. It is never nice to have to tell a person asking for an SEK 3,000 pay rise that you can only approve a quarter of that amount. But it stings less if you are clear about the reason. Maybe you can complete the salary negotiation with a satisfied team member even though the pot was too small. Do not forget you can reward your team member in other ways than increasing their salary. To avoid your staff losing motivation – or perhaps leave the company – think about what you can offer instead.

Ask your team members what is important to them, the answer might surprise you. Not everybody simply wants a high salary a high salary. But if they do not know about the other alternatives that are available, they are not going to ask for them. Instead, many might appreciate a few extra days’ leave, to work from home one day a week, healthcare or increased pension contributions. What is important to your team members?

Can you raise a salary gradually?

“We are unable to offer you a higher salary – at this juncture” does not necessarily have to be a negative answer. Not if it is honest. Perhaps you are not willing or able to give the team member a pay rise at the moment but you can envisage doing so in the future when the person in question has had a chance to prove themselves. But before you can promise that, the conditions need to be in place too. You should never give your team member false hopes of a pay rise that never comes. If the person is both willing and able to perform better for a pay rise, then it is a win-win situation. Surely you want to motivate your staff to aim high and develop themselves?

For it to be fair for both of you, it is important that you set clear goals together. What does your team member need to achieve – and in how much time – in order to be rewarded with a pay rise? In some cases, a one-year period might be reasonable while in others it may be preferable to have a pay ladder with incremental increases. Ideally you should set a number of interim goals to facilitate and maintain the level of motivation. If the company does not have a collective agreement, you have greater freedom to re-calibrate the salary model. Perhaps your team member is willing to exchange a portion of their basic salary in return for a higher percentage in commission? Be creative in finding solutions.

The aim in the salary negotiation is for you and your team member to both feel like winners. Maybe you cannot do everything – but you can certainly do something. If someone has excelled and performed exceptionally well, it might also be worth fighting a little more to ensure a pay rise. Dare to think outside the box and challenge the pot, your manager or other possible obstacles that may stand in the way.

Talking about pay with your employees

To apply, please fill out the following information. Don't hesitate to contact us if you have any questions. Good luck!