3 Reasons You Should Increase Employee Pay Now An increase to the minimum wage has already become law in several cities, and a federal bill is under review. But there are benefits to taking action ahead of any mandates.
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Minimum-wage increases are happening, whether you like it or not. In cities such as Los Angeles, San Francisco and Seattle, bills have been passed to gradually increase minimum wage to $15 an hour. New York City has a proposed bill that could raise the minimum to $15 and there's a bill before congress to raise the federal minimum wage to $12 an hour by 2020.
But why wait until a law is passed to begin paying your hourly employees more?
It's not just workers who are calling for pay increases. A 2015 Careerbuilder survey found that 64 percent of employers believe in raising minimum wage. It's time to put our money where our mouths are. We need to stop looking at wage increase as a bad thing that will only raise costs we'll have to pass on to the consumer.
Giving your employees a raise now, before you legally have to, can be a good thing for your company. Here are three reasons you should increase employee pay to help your company:
1. It will help recruit and retain talent.
The 2015 Jobvite Job Seeker Nation survey revealed that 61 percent of job seekers choose to take a new job because of the amount it pays. If you're having trouble finding the right employees for the job, take a hard look at the pay you're offering for the position.
Money talks, and while vacation days and excellent health insurance are nice, it's not going to attract and keep top talent. Consider benefits the sprinkles on top of the salary cake. Unless the money you're offering is sweet and satisfying, potential employees aren't going to care about what else you throw on top.
Since it's only a matter of time before minimum-wage laws change, increasing what you pay now will help you stand out to job seekers. Draw in top talent before it's too late and they're working for somebody else.
2. It improves employee satisfaction.
If you want your employees to perform well, you need to take their happiness and health into consideration. Helping employees manage stress goes a long way in improving their satisfaction and performance at work.
Employers have done a lot to ensure workers are maintaining a work-life balance by offering things such as flexible hours. But that's not what's really stressing out employees. In a 2015 report from the American Psychological Association, 72 percent of respondents reported feeling stressed about money and 22 percent said they experienced extreme stress over finances.
Increasing the amount you pay your employees will not only alleviate their present stress, but also help them feel more secure about their futures. The aforementioned CareerBuilder survey found that 36 percent of workers surveyed do not participate in a retirement plan and 28 percent were unable to set aside money for savings last year.
The best way to help your employees manage their financial stress is to help them make ends meet. It will improve their productivity and satisfaction because they'll no longer be distracted by financial problems.
3. It improves your company brand.
A lot of companies worry that raising the minimum wage will mean they have to raise prices, and that will push customers away. Depending on how you decide to facilitate higher pay, your costs and your prices may go up. But that doesn't mean customers will be scared away from your brand.
A 2015 report from the Hart Resource Association found that 75 percent of Americans support increasing the minimum wage to at least $12.50. Taking the lead and increasing your employees' pay before it's federally mandated will do wonders for your PR. You could attract even more customers by proactively changing wages because it's the right thing, rather than because you have to.
Also, think about the types of employees you pay hourly, such as customer-service representatives and receptionists. These are the types of employees that have significant interaction with your customers and clients. They are the face of your company brand. It's important that they believe in your company, so they can do a great job in making your customers happy. After all, a happy customer is a repeat customer.