skip to main |
skip to sidebar
The "ripple effects" of the Minimum Wage changes are affecting all retailers. The biggest question: not "What will this mean?", but "How will we address this in our operation?"
First issue, of course: WHEN will your business implement any changes? Well in advance of the laws? Or, coincident with the laws?
Why does the timing matter? Because of the perception. Are you out in front of this issue? Or, seeming to lag behind?
Next big issue: IF the minimum wage (the "floor") of the pay scale in your business needs to be raised to comply with the laws, what effect will this have on the wages of your mid-management team?
- Your current mid-management people may expect a separation between the minimum wages paid and their paychecks.
- If the minimum wage increases cause you to increase the wages of your entry-level employees, might you also need to increase the pay of essentially ALL of your employees.
- The bigger ripple effect may be how other employers in your community handle these first two issues. That is, are you remaining competitive for attracting and retaining the best people?
There are no right or wrong answers here. Every retailer must evaluate this, and determine what is appropriate for their business.
And, of course, that analysis must include how you will be able to pay for any changes in payroll.
- Increase prices for your customers?
- Reduce expenses in other-than-payroll areas?
- Expect more productivity from employees?
- Introduce other forms of compensation, such as more flexible scheduling, more paid time off, etc?
Again, there is no one-size-fits-all answer. But, we sure encourage all retailers to ponder this issue, and to examine all of your options.
Get Out in Front of This Issue!
As we all know, good people are very hard to find. How you choose to compensate - and therefore motivate and retain - your key staff is a key factor in the on-going viability of your business. We urge you to get out in front of this issue!
Want more ideas? Check out this thoughtful article from The Library for Owners at The Retail Owners Institute®: Beyond the Paycheck: Motivate Employees with Creative Compensation.
"The increases in the minimum wage will cause a ripple effect, increasing the expectations of all employees for pay increases." Or so goes a common line of thinking.
This can prompt independent retailers to worry:
- How much will we have to increase prices in order to pay our staff more?
- Where is that money going to come from?
- What will we have to cut in order to pay more?
Or, is there another way to think about this? How about raising standards and expectations to better match with the wages paid? (You know, the "You get what you pay for" model.)
Here's how to start:
- First, revisit your job descriptions. This is the first opportunity to raise standards. Make sure they reflect the performance you now expect from each position.
- Consider delegating much of the initial data-gathering and drafting of job descriptions to someone else in your organization (especially a younger someone else!) Their energy and fresh perspective could be very valuable.
- Then, having clarified the job descriptions and performance expectations, establish an appropriate pay range for each job.
- Finally, make sure your employees each understand the new responsibilities, and the heightened expectations, of the positions in your stores. In fact, some owners have current employees essentially apply and compete for those higher-paying jobs.
For more ideas, and a process for doing this, read "Beyond the Paycheck: Motivate Employees with Creative Compensation", in the Library for Owners at The Retail Owners Institute®.
It walks you through the entire process (including finding out what matters to your employees!)
For most specialty retailers, your staff IS your competitive advantage. Use your compensation plan as another strategic tool to:
- reduce employee turnover;
- save expenses of recruiting, hiring, and training of new staff;
- and most important, maintain customer satisfaction and loyalty.
