A recent global salary survey by Robert Walters looked at the pay packages Hong Kongers are expected to receive this year. Numerous publications have jumped on the data to announce that job-hoppers can be expected to get pay rises of 20-30% in 2016.
Professionals in areas such as IT, Compliance and Anti-money Laundering are particularly expected to benefit.
There are a couple of different concepts that spring up from this survey, but one interesting angle is how a company actually justifies offering this type of pay rise to a new employee.
Logically there can only be one of two conclusions to the above data. Either these employees are currently underpaid in their jobs and are moving to a fairer compensation package or companies are so in need of talent that they are willing to over-pay for talent that was otherwise being remunerated at a fair level.
Whichever scenario is closest to the truth, it’s important for employers to be able to explain, if not outright justify the reasons for offering such a high percentage increment to an applicant. The same explanation could be equally important for both internal and external perceptions of the hire.
Two of the Best Reasons are:
- Skills and Experience
Possibly the best reason to justify offering a significant increment to a potential employee is to do so because of their skills and experience. For the employee-to-be it’s an acknowledgement of the value they bring to the business. Justifying this type of hire internally is also far easier to do given the potential upsides that a new skillset can bring.
- Business Expansion
Some business models can scale significantly based on the amount of staff in the company. If your company is going to miss its strategic goals or could make more revenue if only there were more staff, then this can justify significant salary increments. For the incoming employee, it is motivating to know they are joining a secure and stable business who simply need to expand staff numbers to continue their revenue growth. Internally, as long as the new arrival isn’t cannibalizing existing relationships, current staff are unlikely to mind an extra person to share the workload with.
One of the Worst Reasons is:
- We couldn’t find anybody else
If you come even close to needing to use this as a justification then it’s probably worth reconsidering making the hire in the first place. Internally this never looks good. Your recruitment process and ability as a hiring manager will always be questioned if it looks as though you were forced to “bid-up” a candidate through lack of options, even if in some cases it’s the truth.