Is underpaying staff costing your business?
Paying your staff too little can be more damaging than paying them too much – and it can cost your business more!
We all know how costly and time consuming it can be to find the right person for a role – interviews, commission to recruitment agents, on-boarding, familiarisation with clients and partners… the old saying “a bird in the hand” could be applied pretty accurately to a valuable employee as well!
In a scenario where you are lucky enough to have some great employees, but watch the bottom line closely and skimp on the hourly rate you offer them, you can end up with some big financial losses.
What’s a hard-working employee to do?
Cost to your business: lost productivity while you look for a replacement and train them up, recruitment costs, onboarding costs.
2. Ask for more.
Cost to your business: dissatisfied staff with no reason for loyalty, lost productivity through feeling under-valued, a wage-driven commitment to the business rather than a personal commitment, cost of additional wages may be higher than needed, other staff may also demand a raise if they see the first succeed.
3. Care less.
Cost to your business: Some people are content to sit about in a role they don’t care about while the cheques come in, but they will only put in the time they feel is being paid for and this will show up markedly in productivity and new business stats.
Getting it right requires strategy
1. Research the role.
Advertise the job for what it is worth, hire the best person, and pay them well for what they do.
2. Review your team.
Regular reviews give you the opportunity to touch base on pay levels, staff satisfaction, and areas where employees may be able to do more. Recognition may not always cost you directly – some employees may ask for an extra week’s leave each year, or extra training or a new job title.
3. Bring them into the fold.
Star performers who have a direct impact on your business success may be best rewarded with shares or bonuses so they personally benefit from their drive and motivation.
If you’re unsure about the structure of your team and the pay levels for each of your staff, ask an expert.
Our Business Advisors are experienced in providing advice on staff management and leadership strategy – if you’d like a second opinion or sound guidance, get in touch today.