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If your employees are "demanding" anything, they are probably pretty unhappy.
The first thing to do is understand their situation. Why are they unhappy? See things from their point of view. Think about it. What is really going on? Sometimes demands for more pay are an expression of something else. For example, if the working conditions are poor. It may be that what they really want are better working conditions. Simply listening - I mean really, truly listening - will go a long way.
Secondly, do something. Make working for you better in some way. Release the tension a little.
Thirdly, check market conditions. You have probably fallen behind.
Fourthly, decide what to do. In general, staff are replaceable but replacing them is usually difficult and expensive.
Lastly, this whole circumstances proves that your management structure is inadequate. This kind of thing does not happen if the management are competent from top to bottom. Find the problem and fix it.
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