Why Salary Negotiations and Onboarding Matter in Employee Retention Strategies
Employee retention is not just about offering a competitive salary or increasing benefits. Fair salary negotiations from the start and a structured onboarding process are key elements that determine long-term employee satisfaction and retention.
According to recent research from BambooHR, 50% of employees are struggling to make ends meet, and 73% are asking for a salary increase in their current roles. Furthermore, 70% of new hires decide whether the organization is a good fit within the first month, and 44% regret their decision within the first week.
These statistics make it clear how salary negotiations and onboarding play a crucial role in employee retention. When employees feel that they are receiving a fair salary and are treated equitably, and when they successfully adapt to the company culture in the early stages of their employment, the likelihood of long-term retention increases.
In this article, we'll provide 5 salary negotiation tips and 5 onboarding goals that HR professionals can implement to improve employee retention.
Salary Negotiation: The First Step in Employee Retention
Salary negotiation is not just about setting a salary. Itβs an important moment to communicate how valued the employee is within the organization. If salary negotiations are not handled properly, employees may lose trust in the organization and be more likely to seek better opportunities.
1. Total Compensation Package
Salary negotiation isnβt just about the base salary. Employees consider the total compensation package, and HR professionals must effectively communicate this to them. Before starting salary negotiations, HR professionals should understand the total compensation package the organization can offer and be ready to explain it.
Compensation Elements to Consider: Flexible Work Arrangements: Offer remote work or hybrid work options. Paid Time Off (PTO): Provide additional vacation benefits beyond regular paid time off. Health & Wellness Benefits: Include mental health support, fitness programs, etc. Learning & Development: Offer in-house training or online courses. Performance-Based Bonuses: Provide incentives based on performance.2. Salary Transparency
Employees often wonder whether they are being compensated fairly, and a lack of transparency in salary decisions can lead to distrust. HR professionals must ensure that salary negotiations convey fairness and transparency.
Ways to Increase Salary Transparency:β’
Salary Bands Disclosure: Clearly state salary ranges in job postings and internal documents.
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Pay Structure Transparency: Explain how salaries for specific roles are determined based on market standards.
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Provide Clear Promotion and Pay Increase Guidelines: Ensure employees understand how salaries grow over time.
3. Understand Employee Needs & Expectations
Salary negotiation is not just about numbers. Itβs important to understand employeesβ needs and priorities. HR professionals should identify what employees want and propose the best solution that meets those needs.
Factors to Consider: Key compensation elements that employees desire (e.g., salary increases, bonuses, flexible work). Career goals and long-term growth opportunities employees are looking for. Alternative benefits the company can offer (additional training support, expanded health insurance, etc.).4. Be Clear About Budget Constraints
Not all employees requesting a raise can be satisfied, but itβs important to maintain trust even when salary requests must be declined. When refusing salary increases, HR should demonstrate the potential for future growth.
How to Propose Alternatives: Explain that salary increases may not be possible due to budget constraints but can be reviewed during future performance evaluations. Suggest alternative benefits like performance-based bonuses, additional time off, or training support. Discuss long-term reward plans by offering personalized growth opportunities.5. Ongoing Communication
Even after the salary negotiation is completed, itβs crucial for employees to feel continuously respected. Remember, salary negotiation is not a one-time event but part of ongoing relationship management.
HR's Role After Salary Negotiation: Provide regular feedback and discuss growth potential. Maintain open communication if employees have concerns or dissatisfaction. Provide clear performance evaluation processes that outline how salary adjustments are made.Onboarding: The Core Process for Employee Retention After Hiring
Onboarding is not just an administrative procedure. Employees who experience effective onboarding have 58% lower turnover rates in their first year, while 50% of new hires at companies with poor onboarding leave within the first 6 months. Furthermore, companies with structured onboarding see employee engagement levels more than twice as high as those with less structured programs. Many companies make the mistake of neglecting the onboarding process, which leads to higher turnover within the first year. HR professionals should approach onboarding as a strategic process that shapes the employee experience.
Key Elements of Effective Onboarding: Pre-boarding: Set up IT systems, paperwork, and send welcome emails. First Week: Introduce the team, set role expectations. First Month: Provide job training and organizational culture orientation. First 3-6 Months: Offer feedback, set long-term growth goals.1. Confirm the Decision
The first impression of the company greatly influences employee satisfaction.β’
44% of new hires regret their decision within the first week due to mismatched expectations.
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HR should continue communication and reinforce a welcoming culture before the first day.
What HR Should Do: Offer a pre-boarding system from confirmation to the first day. Have a pre-meeting with HR and the team leader to introduce company culture and the role. Ensure the new hire feels confident in their decision by sending welcome messages and packages before their first day. Tip: Pre-board materials (company intro, org structure, work processes) should be automated to help employees prepare.2. Adapt Quickly to the Company Culture
Help new hires adapt to the company culture quickly.β’
One of the hardest challenges for new employees is adapting to organizational culture and work styles.
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Ensure employees experience minimal cultural friction by including company mission, core values, work styles, and expected behaviors in the onboarding process.
What HR Should Do: Communicate the companyβs history, mission, core values, and culture through storytelling. Introduce key teams and departments, and explain collaboration styles. Use internal communication tools (e.g., Slack, Notion) to support smooth transitions. Tip: Share examples that align with the company's vision and goals, helping new employees relate to the βcultural fit.β3. Set Clear Roles and Expectations
Clearly define roles and expectations to improve performance.β’
Many new employees are unsure about βwhat exactly they should be doingβ after joining the company.
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Setting clear objectives and expectations helps new hires focus and perform better.
What HR Should Do: Provide a guide to roles and expectations during the first week. Set performance goals and evaluation criteria through 1:1 meetings. Explain priority projects and what the employee should focus on. Tip: Ensure that OKRs (Objective & Key Results) or KPIs are clearly communicated during onboarding to help employees understand their goals.4. Job Training and Skills Development
Training should continue after onboarding to ensure employees are fully prepared.β’
New hires need sufficient hands-on training to close the gap between what was expected during the hiring process and what the job actually entails.
What HR Should Do: Offer job-specific training and practical opportunities. Train employees on the tools and systems necessary for their work. Mentoring programs: Pair new hires with seasoned employees for 1:1 coaching. Tip: Gather feedback regularly during the first 90 days and offer continuous learning opportunities.5. Support Performance Adaptation
Provide necessary resources to enhance productivity.β’
Many new employees waste time due to lack of basic work tools and information after their first day.
What HR Should Do: Ensure equipment (laptop, office supplies, software accounts) is ready on the first day. Provide manuals, SOPs, and resources for easy access. Guide employees through internal network, collaboration tools, and intranet usage. Tip: Create a list of contacts and resources for immediate help whenever new hires need assistance.Salary Negotiation and Onboarding: The Core of Employee Retention
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Salary negotiation ensures employees feel valued in the organization.
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Onboarding helps new employees understand the company culture and expectations, allowing for faster adaptation.
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