Small business owners often cringe whenever there’s public discussion or a great deal of media coverage about wage increases. The initial reaction when government legislation forces minimum wages higher -especially by relatively large increments- is that companies will either raise prices (passing the cost onto its consumers) or slash employment (or both).
That doesn’t have to be the case, though. Learning to not only survive, but thrive in these new environments requires some forward thinking, innovation, and understanding that there are several key benefits businesses of all sizes can gain with these inevitable increases to minimum wage requirements.
Wages Should Increase With or Without Government Intervention
Whether or not the government gets involved in minimum wage increases (at the local, state, or federal level) or not, wages will increase over time for the most part. That’s because the more successful business leaders understand driving wages up not only attracts more talented and skilled workers (not to mention more dedicated and loyal employees), but also a larger pool from which to choose.
When a competitor raises its hiring and regular wages, the rest of the competition can either remain stagnant and lose its best workers (and the most skilled) to that other company or follow suit.
Increased Wages Means More Money in the Economy
There are certainly some arguments on both sides of the fiscal fence regarding this, and while the impact of economic stimulus may not be as significant with entry-level jobs, with more robust positions, more money getting into the hands of employees, that generally equates to more spending.
More spending means business of all sizes earn more revenue and that is a driving force for growth.
Even with these key benefits, small to mid-sized companies sometimes struggle to adapt to forced wage increases. There are a few steps a business (of any size) can take that might just help it thrive in the future.
Higher Pay Often Equals Higher Quality
Even if the employees a company currently has remain and begin enjoying a boost in pay, that can often inspire higher quality work.
When people don’t feel they’re earning their worth in wages, salaries, or benefits, it can lead to a sense of giving up, or not caring enough.
Certainly, these types of workers can become toxic to the company, but many simply slip into routine and, every other week when they study their paycheck, they start questioning whether this is what their life was meant to be. On top of that, if they know colleagues working at a close competitor are earning more, it can be frustrating.
Workers who are in direct contact with customers are a vital component to word-of-mouth marketing. When a company’s prime customers feel respected and that they received exceptional service and support, that feeling can spread like wildfire, especially through online reviews.
A boost in pay for these level workers can have a direct and positive influence with this aspect of modern business.
Avoid the Initial Reaction to Slash
It’s going to be tempting to immediately slash the workforce or pass off the bump in wages onto consumers, but hold off. Instead, brainstorm and think creatively about how you can increase revenue.
As noted in the previous point, better customer service and support can usually lead to a bump in revenue, and that starts with dedicated and responsible workers. With an increase in wages, you may just begin to attract the pool of workers you’ve wanted, but hadn’t yet figure out how to reach.
Is There Any Way to Boost Company Value?
Consumers will generally pay more (without giving it a second thought) for something perceived to be a higher value. A company’s brand is the key to this kind of reputation, and it doesn’t develop overnight, or by chance.
Building and boosting a quality brand takes time, dedication, and effort. When a leader starts putting higher quality workers around him or her, when they take a vested interest in ensuring they have the best that increased wages can attract, they will find more employees who can offer valuable insight and effort into boosting brand identity and recognition (not to mention reputation).
Almost every business is going to face competitors solely focused on providing the cheapest products or services, but seasoned consumers are readily aware that “you truly do get what you pay for.” More customers for many products and services are no longer willing (or would prefer not to) sacrifice quality to save a few dollars.
With improved brand recognition, the business that gets generated as a result will boost profits, even with (and often the result of) a jump in wages.
Increase Employee Expectations
When your staff are earning more, they should be producing more. This doesn’t simply mean more products, but more efficiency, more dedication, more determination, and more devotion.
People want to work for a company they love. They don’t want to simply earn a paycheck, go home, and wonder what the point to all of this is; they want to feel as though their efforts, their life, matters.
When they feel valued by their employer, supervisor, manager, etc., it usually shows in the quality of their effort and work.
Increasing wages should mean increasing expectations. Let your employees know what’s expected of them through this increase in salary or hourly wages.
By taking these simple steps, businesses of almost any size will be able to capitalize on increased minimum wages, whether they’re the result of legislative action or a desire by that company to improve its bottom line, brand, or reputation.