Many people consider poor salaries and rewards to be THE reason why people leave an employer. However, extensive research into why people leave jobs shows this not to be the case. There are a number of differing factors that explain why someone chooses to move on.

But what is clear is that a team members dissatisfaction with pay is very often the catalyst for them to start looking. An individual may already be frustrated with a number of factors, but the financial factors typically act as the trigger to update their CV and start applying for new positions.

This means that getting your pay structure right really is a key aspect of retaining the right people.

But when it comes to setting pay levels, it is not necessarily about paying the most, but more about ensuring that the way you remunerate your team is fair, consistent and competitive.

Here are 7 tips to making this happen in your business:

1. Know Your Marketplace

One of the keys to retaining customers and customers is to understand what is happening in the external market with respect to competitors, products, services and pricing and then to adapt your own offering to ensure you continue to maintain your competitive edge.

The very same applies to retaining staff. By keeping an eye on the local market for people, you have better information to make decisions about how to retain your team.

So get into the habit of glancing at local papers, trade journals and job sites. Who is recruiting? What kind of people are they looking for? What type of skills does there seem to be a shortage of? What is happening to pay levels? What type of innovative benefits are other businesses offering?

2. Be Very Competitive With Your Pay

Whilst retaining good people is not simply about paying more than everyone else, you do need to be competitive. So ensure you know what is happening in the external market and that your pay levels reflect this.

But also ensure that they reflect what you are doing with your business internally. As an example, if you are charging premium rates for your services with an emphasis on offering a quality product with a high level of customer service, then you should focus on paying premium rates to your team so as to attract and retain the high-calibre people required to deliver your premium products and services.

3. Link Pay Rises To Performance

If you want to incentivise and keep the right people, you need to ensure that the top performers in your team feel well rewarded and valued. The way to do this objectively and fairly is to conduct annual appraisals with each of your team, and then have a system that links the appraisal directly to salary increases and discretionary bonuses.

The way to do this is to have a very simple scoring or grading system within the appraisal, which you then use to make decisions on pay rises.

4. Pay An Annual Cash Bonus

Everyone loves a bonus. It makes people feel valued and is an important tool in retaining staff. There are a number of ways you can pay a cash bonus.

You can pay an individual bonus annually where you just pay double the salary one month of the year. As an example, one of my previous employers paid all staff double in the December pay packet, which essentially meant an end of year bonus of 8.3% and had a significant impact in tying in people to the organisation.

Alternatively you could pay a team bonus based on team performance. Set your financial targets for the year and then pay the whole team a bonus dependent on the business achieving targets.

5. Offer More Personalised Bonuses

A friend of mine has recently returned from a 3-day break at the French Grand Prix. His boss, a small business owner, bought the package at a charity auction and gave it to him as a thank-you for his hard work over the past year. Being a life long Grand Prix fan, he was over the moon and says he is now more loyal to his employer than ever before!

So look at what your own team would value as individuals consider what would totally motivate them. Is it theatre tickets, tickets to a football game, a meal at a posh restaurant, a spa treatment or a weekend break?

You see, such personalised bonuses are often much more effective in retaining employees to your business than the cash equivalent.

6. Build Up Your Benefits

To retain customers and clients, you need to continually look for new and innovative add-on services that will benefit them. The same applies to retaining your employees. In a competitive job market, you need to continually look for ways in which to add more and more benefits for working for you.

For example: can you strike up alliances with local service providers which allow your team discounts on eye treatment, travel, insurance and the like? Can you reward staff loyalty by linking additional days off to the length of employment, just like larger corporations do?

7. Communicate, Communicate, Communicate

No matter how grand your pay and rewards scheme is unless people really understand it, it will have little impact in motivating and retaining them. So ensure everyone in the team is crystal-clear about how the pay and bonus scheme works, what the financial targets are for the business and how these impact on their own pay packet.

Then its a question of re-enforcing these points through your weekly staff meetings as well as your quarterly and annual updates with the team.

Remember: having a fair, consistent and competitive pay structure is a crucial aspect of Keeping The Right People. Take some time today to think about what you could do with your pay and rewards to motivate and retain your team. Then choose at least one tactic to implement this month. It could be the biggest contribution you have made towards retaining your staff this year