Salary Negotiation Lessons From the NHL Lockout
Hockey fans have been out of luck so far this season with the National Hockey League (NHL) locked out since September due to a labor dispute between team owners and players. NHL team owners want the players' revenue share reduced from 57 percent to 50 percent under a new collective bargaining agreement.
The lockout is also concerning to many business owners, especially sports bars and restaurants, that rely on the NHL season to fuel their revenues during the winter months.
For most business owners -- sports team owners included -- the primary objective is to increase revenues. But when it comes to paying your staff, the rules can sometimes change.
As the NHL labor dispute drags on it can offer a few lessons about negotiating salaries with employees. Here's a look at five:
1. Consider the economic conditions. As an employer, you not only have to know the current economic position of your own company, you need to be aware of the state of the economy as a whole when putting together budgets. Consider how a deal you agree to today -- a salary contract or any other type of financial agreement -- might affect your business five years from now.
2. Understand the market value of your employees. As an employer, find benchmarks in your industry in order to understand whether your employees salary demands are realistic. If your competitors are offering more money for a similar role, you better be willing to step up or have something to offer that would make that employee want to stay with you.
3. Be willing to part with replaceable employees. Can the business run without the employee or is he or she critical to your success? Are you willing to lose the employee over salary demands? Perhaps you have other candidates or current employees with similar skill sets and experience that can fill the role. These are all factors to keep in mind when negotiating salaries.
4. Know your limits. Even if you're convinced that an employee is invaluable to your organization, you have to set a budget and stick to it. If you lose the employee because you're unable to meet his or her demands, you can save yourself years of unrealistic and perhaps unsustainable costs by hiring someone for a more reasonable salary.
5. Keep your customers in mind. Sometimes lost in the midst of salary negotiations is how it can affect your customers. The NHL labor dispute means there's no hockey being played for the fans. If the lockout drags on and the fans don't come back, sponsors could also leave. Sometimes it's best to resolve salary disputes as soon as possible for the sake of your customers and not disrupting your entire operation.
What tips do you have when it comes to negotiating salary with employees? Let us know in the comments below.