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Five items to successfully increase your employees' salaries

by , 16 February 2015
Most companies increase employee salaries at the beginning of the year. While others prefer to do this at the end of the financial year after finalising new budgets for the new financial year.

Whichever time of the year you choose to increase your employee salaries, you need to consider a few points. The first and most important is you need to analyse what increases your company can afford.

Keep reading below to see the five items you need to consider when deciding on salary increases...


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Consider the following five items when deciding on salary increases

1. Cost of living
Use the CPIX and other market related information. The CPIX (consumer price index) figures give a base most companies use to decide on their product price increases and expense budgets, and salary increases.

2. General expectation of an increase
Know what your employees are expecting and give business related information to temper or correct unrealistic expectations.

3. Expense budgets
This is so you understand what it will cost you to run your business. And what increases you can afford.

4. Budget for salary increases
Know how much your business can afford to pay out on salary increases so you don't put the sustainability of your business at risk.

5. Market view of salary increases
Use salary surveys, media reports, labour guides, etc. to keep abreast of relevant trends.

After looking at the above items, decide what increases you'll give to each employee.

For more information on salary and wage negotiations, turn to chapter S06: Salaries and negotiations of your Practical Guide to Human Resources Management. If you're not a subscriber yet, click here.

P.S. If you haven't booked your seat at our Labour Relations Amendment Act Workshop, today is your last chance. Make sure you know how to implement the new LRA changes. You only have until 1 April 2015 to comply. Click here to book your seat and avoid the dreaded fines!


 


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