It is a common practice in the corporate world for employers to increase the salary of staff to retain their services. In fact, according to a study, the increases in salary at accountants’ level has ranged from 25% to 50% in the past two years. The most probable reason for adopting this approach is because the companies want to make sure that the employees do not feel undervalued and dissatisfied, which is quite often, a reason behind switching jobs.
In the post-pandemic world is steadily trying to recover and most companies are offering good salary and improved perks to attract and sustain the staff. This practice can be observed mostly in the sectors that had been hit badly by the pandemic, like the travel and hospitality industry, or the retail sector.
However, it is not a good remedy in the long run.
Only a Short-term solution
Primarily, increasing the pay of your staff to retain them, is a temporary solution. When employees seek a pay rise or an employer offers it, the employees may feel satisfied for a while, but might look forward to a raise from the company each time there is a crisis or a better opportunity elsewhere. This would lead to disproportionate expectations from the company and in turn might increase the employee turnover.
Distraction from the core issues
Whenever the Management or Human Resources team of the company feels that there is a possibility of employees leaving the company, the underlying and deeper issues must be identified first before jumping to increase their pay to retain them.
Some of the core issues observed in the corporate world include: young professionals moving towards less stressful and more rewarding work environment, specifically in the post-COVID world, with going through the work from home lifestyle, many employees like their workspace to be easily accessible, which requires less commute.
Moreover, the efficiency of employees might remain the same even after increasing the pay, if the core issues are ignored.
It burdens the Company even further
Often, the company is not able to receive the expected output or performance even after increasing the pay of the employees to retain them. Due to deficiency of funds thereafter, and unreasonable work expected from each person, the company would not be able to even employ more staff and would be burdened, which would lead to the exactly adverse output than the one expected.
Is outsourcing a better option?
Outsourcing can be considered a smart approach in these circumstances as it gives companies a leverage both in increased profits and availability of manpower resources at a short notice.
Choosing the suitable outsourcing partner may seem like a tough task, but you must look out for a team of experience professionals that can not only help you accommodate the work but also ensure accelerated growth in future. At Sapphire, we offer outsourcing services using several cloud based accounting platforms, including our robust enterprise portal. With Sapphire, you can expect not just better productivity in your business but also improved work performance and outputs.
Reach out to us and discuss about the outsourcing needs for your business and we will help you out!
