As the head of a company, there are a number of important financial decisions impacting the fate of your business that must be made. Often these involve difficult compromises. For instance, the decision between new advertising campaigns that could greatly increase sales and revenue or providing a wage increase to existing employees.
In many situations, company leaders choose to maximize profits over spending funds to improve the lives of the people that help keep the doors open. What many don’t realize is that by only providing the bare minimum to employees, they are frequently introducing a variety of factors that can significantly reduce the productivity and quality of work produced. For this reason, greater employee care may actually be the best way to improve profits.
Surviving with the Minimum
There are a number of studies out there that indicate that a higher salary up to a certain point leads to a higher quality of life. This increased salary can mean the ability to pay off a mortgage, send children to college, and save for retirement. All of which are a huge cause of stress for many working Americans. Stressors such as these have an unpleasant habit of sneaking into the workplace and impacting timing and quality of products and outcomes.
Providing more than just the minimum pay rate to employees because of this alone is extremely admirable. Some company CEOs have committed to doing just that. However, certain additional benefits exist for many managers. For instance, less stressed out employees tend to work harder, expand more on creative ideas, and collaborate better with their peers. All of these factors are huge positive qualities that CEOs spend years trying to improve in their workforces.
Fair Treatment Benefits Everyone
According to Rob Glander, CEO of the company GWC Warranty, employees should earn a fair pay for a fair day’s work. In his GWC Warranty blog, he states “Fairly paid workers are more engaged, loyal and committed when they don’t have to work two or three jobs just to make ends meet.” This statement alludes to another profound benefit of providing employees with more than just the bare minimum salary required: loyalty.
By adjusting pay up above a living wage, attracting and hiring quality employees that offer significant benefits to the company becomes profoundly easier to do. Those that are hired with the company are also typically inclined to stay longer. Retention of good employees can greatly reduce the costs of replacement and training of new personnel, which can be a major drain on the finances of a growing company. Furthermore, employees that are happy with the work they are doing and able to meet their basic needs are more likely to speak positively of their work experience and may be inadvertently providing free advertising.
Going Above and Beyond
Another way to greatly help your company by helping your employees is to provide additional benefits. Although many businesses are now required to provide health insurance to employees, there are a number of really crappy options out there. Choosing to provide quality health coverage for not only employees, but their families as well, can make a monumental difference in family stability, which reflects itself in the workplace through the previously mentioned benefits of increased productivity and loyalty.
Some company leaders have even made the decision to provide their employees with unlimited time off. It may come as a bit of a surprise, but when this benefit was offered, most companies didn’t see huge increases in the amount of time employees were absent from work. In fact, when employees were more confident that they had time off whenever they needed it, they took about the same amount of personal time throughout the year, not unreasonable amounts.
Compensating employees with an income that doesn’t make it easy to meet basic needs is a poor idea from both a management and human perspective. Companies that have chosen to provide quality incomes tend to see more productive and happy employees. Furthermore, they gain loyalty and dedication to company objectives. With this in mind, perhaps it is time to reevaluate what your employees are earning.