A Helping Hand

Maybe you can't pay more, but you can still help low-wage workers stay healthy, happy and working for you.
Magazine Contributor
3 min read

This story appears in the May 2000 issue of Entrepreneur. Subscribe »

It's an interesting paradox: Even though unemployment is at its lowest level in decades, many of the available jobs just don't pay workers enough to live on and support their families. But entrepreneurs have got to take an empathetic approach. Failure to take the time to understand and assist your low-wage workers with the life hurdles they face every day is a missed opportunity to build loyalty and reduce turnover.

How can you handle such delicate situations in a professional way? Randy D. Davis, president and founder of R. D. Davis Enterprises, a human resources consulting firm in Winter Park, Florida, offers these suggestions:

1. Start by paying a competitive wage for the position. That doesn't mean you pay a janitor an executive's salary, but keep your wage levels in line with the going rate for comparable jobs in that market.

2. Help employees increase their take-home pay through the Earned Income Credit (EIC) program offered by the IRS. Eligible employees can receive part of their earned income credit in their paychecks throughout the year, instead of waiting until they file their tax returns. Eligibility requirements and other details are explained on IRS Form W-5, which participating employees must complete each year. Contact the IRS for more information, and keep a supply of W-5 forms on hand.

3. Educate employees so they know what their benefits packages offer, how to use them and what their value is. "It's not just providing benefits, it's telling them about it," says Davis. "Constantly sell your people on what you're doing for them."

4. Learn about community resources. Most cities have a range of services available to low-wage workers, but people either don't know about them or don't know how to take advantage of them. Do the research and share it with your employees. Davis recommends you start by contacting your state's welfare-to-work program for information on various support services, which might include low-cost health care for children, subsidized child care and assistance with transportation.

5. Help employees with financial-planning issues. Conduct mini-seminars on various aspects of personal financial management, such as saving, buying a home and using credit wisely.

6. Train supervisors to deal effectively with a low-wage work force; employees in lower income categories have special needs. For example, unexpected car repairs-an inconvenience to a midrange earner-would be catastrophic to a low-wage earner.

Your supervisors need to learn how to put such issues into perspective and respond appropriately. Make sure they treat each worker with respect and provide training and support when necessary. Above all, help engender positive attitudes toward management and supervision.

According to Davis, the primary reason people leave a job isn't the salary-it's because of their direct supervisors. "Low-wage employees often leave because they don't get feedback, or when they do get feedback, it's negative," he says. "Low-wage earners need a lot of positive feedback because they have a lot of negativity and stress in their lives. So catch people doing things right and praise them for it."

Jacquelyn Lynn left the corporate world more than 13 years ago and has been writing about business and management from her home office in Winter Park, Florida, ever since.

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