As increases to federal, state, and local minimum wages march on, considerable energy has been expended debating the social and economic pros and cons. While business leaders may feel as though they have little influence over minimum wage hikes, there remains an obligation of preparedness—where we ensure our businesses are positioned to successfully navigate these imposed challenges.
Anticipate the Ripple Effect
The financial impact of increased minimum wages will likely extend beyond employees falling below the wage threshold. When forecasting the impact to compensation planning, also consider wage adjustments that may need to occur upstream in order to maintain pay equity, including increases for leads, supervisors, and managers. Planning for overtime is also key, including strategies for decreasing or eliminating this expense.
Step up your Competitive Edge
Historically, many employers have adopted a practice of recruiting low-wage workers by offering salaries above minimum wage. Employers using this tactic may soon find themselves on a level playing field with other employers. To compete in this new labor market, dynamic employers will need to improve their employer brand (how they are perceived as an employer in the labor market) and shore up their employee value proposition (what an employer does that results in employees choosing to work and stay at your place of employment).
Get more Bang for your Buck
Are you confident that your workforce is performing to its potential? Increasing employee productivity and quality is key to maximizing your profitability. Key strategies for enhancing the ROI on your employee costs include:
- Properly equipping and training new hires
- Proactively addressing employee performance issues
- Seeking opportunities to improve processes and efficiencies
Look beyond your Workforce Costs
In many organizations staffing requirements may dictate that these workforce costs will become a greater percentage of the overall business spend. Leaders who successfully adapt to this changing business climate will explore strategies for increasing the top line, decreasing expenses, and decreasing cost of goods/services.