Cliff Oxford at the NYT Small Business Blog has a great strategy for for retaining employees, particularly during that vulnerable period where you’ve just trained them but they might be eying greener pastures:
Here’s how it worked: We offered talented new hires an ascending salary structure that started low but guaranteed automatic increases each month. These employees started at about 50 percent less than market rate, but by month 12 they were 20 percent ahead of the market. By the end of the second year, they were 40 percent ahead of the market, and by year five they could be as much as 100 percent ahead of the market — and worth every penny.
The idea worked because it attracted people with a long-term mentality and because, if they did choose to leave, they had something to lose. It did take us longer to find people who were willing to sign up for what I called the new deal but once they came on board, their hearts and minds were with us. While I’m sure there are other ways to solve this problem, this one worked for us, and I’m sure it would work for others as well.
Something to consider when negotiating salaries!