How to Have a Competitive Wage Advantage in Minnesota

Regardless of the size of your company; and the amount of effort you do – or do not put into your brand; you have a brand. Whether you offer a service or a product, that brand is determined by how you treat your employees and how you treat your clients. The truth is – how you treat your employees determines how your clients are treated. And, while benefits, growth opportunities, culture, recognition, and appreciation are all part of the package, the wages you offer, play an essential role. Paying competitive wages is not an expense; it’s a wise investment in one of your most important assets. It’s a success marker.

The payoffs of offering competitive wages – from entry-level to your CEO.

Competitive wages –

• Build your brand – public favor is a powerful tool.
• Indicate that your care – and that’s a winner.
• Attract a higher level of talent.
• Increase employee satisfaction – which increases word-of-mouth recruiting
• Boost employee focus and productivity – and hence, your bottom-line.
• Create an incentive for employees to give their best.
• Foster a creative, innovative culture.
• Encourage company loyalty – increasing retention rates.
• Promote staff cohesiveness.

On the flip side, failure to keep up with the wage market can cost far more than the additional investment in employee pay. Consider the following:

Talent is tight:

Your competitors are always on the lookout for talent. They aren’t afraid to court- and then poach – your top talent. And if they succeed, that leaves you with delayed projects, disorganization where the river once flowed smoothly by, and now you must devote time and expense to hiring, onboarding, and training someone new to the company nuances. In upper-level positions, the costs tied with a departing professional can often be more than double their annual salary.

It works the same for entry-level and mid-level employees. When the grass is greener on the other side of the fence, they often jump. This leaves you searching for additional staff right and facing a loss of production.

Money talks:

While it’s true that workers are willing to settle for less pay if the benefits are superb and the culture is attractive, they still need to pay their bills. Remember, part of the formula for a winning culture is happy satisfied employees, and underpaid employees are less likely to be happy, satisfied employees. Furthermore, if you have the withal to offer superb benefits, then you can most likely put a priority on wages too.

You get what you pay for:

Grandpa said it, and it’s still true today. A flat iron steak doesn’t cost as much as porterhouse and . . . It doesn’t taste as good either. When you fail to pay competitive wages, your competitor who does attracts the higher quality employees, and you are stuck with the run of the mill brand.

Time for Wage Strategy in 4 Steps –

As Galen Emanuel points out,

“Every successful leader and organization know that in order to maximize profits, it’s absolutely imperative to hire and keep the best employees possible.”

Wages may be considered an operating expense – and therefore a potential area to prune, but like any sound investment, raising staff salaries can deliver healthy returns.

Zeynep Ton, the author of The Good Jobs Strategy, asks this question

“Are workers mostly costs that detract from profitability, or are the engines that drive revenue growth?” 

Her research for the book indicates that, counterintuitively, companies such as Costco are more profitable precisely because of relatively high employee wages— rather than despite them.

The Steps

1. Start viewing employees as an appreciating asset:

Your business may have a great product or service, but the strength behind that product or service is the employees who make it possible. And, satisfied employees who love what they do become more valuable over time as they accrue new skills, knowledge, and

2. Determine the value of the position:

Here’s where accurate job descriptions are invaluable. You can’t determine the market wage if you don’t understand what the job entails.

3. Get to know your market:

Study salary reports and compensation surveys. Get involved in industry groups. Compare similar positions in similar companies in your geographic area, but also pay attention to national averages. Pinpoint the median salary/wage. Obviously, an assembly-line wage is much easier to measure than an upper management position.

4. Create a benchmark:

Choosing to pay ahead of the median puts you ahead of your competitors. On the other hand, don’t go way above – this only creates a false sense of entitlement, and sets a standard you might not be able to keep. The key here is to be above average but remain in a sustainable position.

You may have to adjust your view of your employees but applying these strategies and setting an above average wage will create a brand to be proud of and ultimately build your strength as a business.

Whether you have already joined the ranks, or are just starting the move toward living wages, consider a partnership with Award Staffing. We value our community economy, workforce, and job seekers, as well as the ultimate success of our clients. For this reason, Award only works with companies whose pay rate begins at $12/hour. Which is one of the reasons, were named Star Tribune’s 2018 Top Workplace in Minnesota! Contact us today.