HR Insights newsletter draws our attention to research by Mercer Consulting on the cost of overpaying, or underpaying your staff. While it may be obvious that over remunerating staff is going to cost you more, underpaying them will also affect the bottom line.
Overpaying employees adds £3,262 per employee to the annual wage bill, according to Mercer, while underpaying them adds risk of staff departures with the equivalent monetary value of about £800 per employee. (This figure sounds low when you consider the fees charged by us profit-hungry recruitment consultants!)
A topic then which will make employers sit up and take notice.
One possible weakness here is the inconsistent application of pay policies by line managers. Lack of clarity on pay policies and a natural tendency to reward mediocre performance are mentioned in the newsletter as possible contributory factors. Rewarding mediocre performance may seem a strange "natural tendency" but one that every employer should be guarding against. After all, how are your high performers going to react when they hear the news on the office grapevine?
If you read the previous article, you'll know that Spinnaker acts as secretariat to the Maritime HR Forum, whose members include a large number of shipowners, shipmanagers, oil companies and commodity groups. Their boards of directors recognise that reliable salary and benefits data is business critical. Being a member allows you to benchmark the salary and benefits you are paying to employees. Make sure you are not under, or over paying!