Shortsighted? Absolutely! The Australian press is now reporting that some employers hope to pass on the superannuation increase to their staff.

And they may have every right to do that. If their employment contracts stipulate that their salary package includes base and super, they are well within the right to fiddle with the percentages of each of the components so that more goes into super and less into the employees’ bank account.

But just because they can should they? I don’t think so.

Employers who pass on the increase in the super percentage may find out that this policy costs much more than it saves.

We are in the midst of what many, all over the world, are calling a skills crisis. Not a shortage – a crisis.

Employees have more choice of jobs than ever before and after the year we’ve all had it doesn’t take much for someone to get fed up and quit – especially if they feel they are being taken advantage of.

It can cost up to 300% of someone’s annual salary to replace them (factoring in both hard and soft costs) – a far greater expense than the .5% super increase.

But this actually highlights a bigger, systemic issue with pay packages. Labor is the only resource businesses don’t have to consistently pay market value to utilize.

Businesses pay market rate when they hire, but many quickly fall behind with annual salary increases – and are surprised when the employee leaves for a significant bump.

Bottom line, pay people what they are worth – always – and don’t take advantage of them – ever.

I had the pleasure of speaking with Mitchell Dye at 94.7 the Pulse last week about these topics.

Take a listen here: