Defining how much you will pay your employees is a critical business decision. It involves many aspects and it has a big impact on your entire organization.
Start with simple questions. What is the current company revenue? And how will it evolve in the future? What is the opportunity cost of money that is going to employees as opposed to somewhere else? What is the impact on salaries on your hiring processes?
The decision on defining your wages has an impact on the employee experience. It is one of the key elements that influence the decision of people to consider working for your company. Because it’s what allows them to sustain their personal lives and it drives their decisions outside of work.
For your business, your employees are the factors that drives your business forward. And if your employees are happy with their wages it will impact their productivity in a positive manner.
Thinking of all these factors, it seems reasonable to pay your employees a salary that is above the industry-average. We like to give you seven reasons how this will boost your business productivity and how it will decrease your business cost at the end.
1. The talent on the market is limited
We are living in a fast-evolving world in which new types of business are created on a constant basis. This means that new types of jobs are created and that there is only a limited number of people that could thrive in theses certain roles. That´s why you should do everything you can to attract those talented people that will excel in your team.
One of the most effective ways to create your dream-team is through a high wage. It will help to attract those excelling players to your team.
2. Let your employees reach that extra touch
A culture of high salaries creates a culture of high output. If you are paying someone an above-average salary, they know that you are expecting an above-average effort from them. When people know that they are earning more than their counterparts in other companies, they will go the extra mile for your company. Because they want to demonstrate that they are worth the extra pay.
3. People get talking
Your employees have families and friends. And by keeping your employees happy, you can be sure that they will be talking about, or even recommending, your company to them.
Giving them that bit of extra and by giving them extra personal attention, your employees will be happy to be working in your high-output environment, and especially when they are enjoying the work they are doing.
4. They won´t want to leave your company
When you are compensating well, and you make your employees happy, employees will commit themselves to a long-term commitment. People that have a longer time at your company will have a better understanding of the systems, norms and culture that your company wants to emit. This will bring stronger teams and more productivity.
It will also save you time and money that you normally would spend on looking for new hires. The recruitment department will have a lower cost thanks to that.
5. Focus on the job
Workers will be focusing more on the job, because money will be less of a concern for them. They won´t be worrying about staying financially stable or having the feeling of being unfairly compensated.
6. They will feel fairly rewarded
Instead of that a company that keeps all the profits for their own executives or investors, your company will be investing in the team that is giving your customers a high value! Your employees will also see it like that and they will feel compensated for their hard work that they are investing in your company.
This feeling of being compensated fairly for the work that they are doing will create a good environment to work in. People will feel praised for the work that they are doing and that they are valuable to your company.
7. Less people, more valuable work
When you have the best-in-class employees, the output that will be delivering will be significantly higher. Two top-players can accomplish the same work that can be done by three less engaged, less talented players.
This means that you will need less employees and that you will be able to save in net salaries and keep your teams more lean.
Your benefits will be higher than your costs
To summarize this, increasing your employees’ salaries can feel like a painful thing to do. But, thinking about the benefits, over time this way of working will help your company save on salaries. And will bring you higher productivity and higher value. It will also improve your company’s culture and happiness.
Increasing employee salaries is not just a move to make them happier, but an investment toward a more productive and high-quality business.
