6 reasons why you should pay your staff as much as possible

6 reasons why you should pay your staff as much as possible

Most businesses align their success against a particular margin; profits.

Surplus profits are often cited as a key performance indicator, and as every great leader knows, great employees continue to gear that linear upwards.   

However, this comes at a cost. If a business is always looking to maximise profits, they’ll be scrimping elsewhere; most likely on their manpower’s wages.

This archaic model will leave businesses facing a conundrum – if they’re paying employees as little as they can get away with, the workforce will provide as little effort as they can get away with.

According to PayScale’s 2015 Compensation Best Practices Report (CBPR) money is the main reason people leave medium and large companies. 61% of those surveyed rank compensation as ‘the biggest impact on [their] decision to take a new job.’

With remuneration a contributing factor to high turnover – it may be worth considering the following reasons, as outlined by Galen Emanuele, President of Shift Yes.

Writing in CNBC he offers six reasons as to why you should be paying your employees more…

1. Attraction and retention

Smart, intelligent and driven individuals know their worth, and that’s part of what makes them exceptional. 

Despite this, the latest Labour Market Outlook survey from the CIPD and The Adecco Group also found that almost one in five organisations expect a pay freeze when it comes to making decisions about wages – so it may be the case that organisations simply cannot increase wages.

However, according to High Pay Centre calculations, the average pay ratio between FTSE 100 CEOs and the average total pay of their employees was 129:1. These CEOs earn around fifty times the annual average of a Human Resources Director.

It may be time for a review…

2. Employees aren't productive if they're searching for better jobs

A recent study from the University of Warwick found that happiness led to a 12% spike in productivity, while unhappy workers proved 10% less productive.

Professor Andrew Oswald, one of three researchers who led the study, said companies that invest in employee support and satisfaction succeed in generating happier workers.

There’s only so much support an employer can give – and if it's not paying the bills, then save the wellbeing spiel.

3. Prove you value people over profits

If people feel comfortable with their pay, then a huge burden is removed from them and their employer. Jon Muranko, President and CEO of Muranko Marketing, explains: "People are motivated by money only up to a certain point. After that, more intangible things like feeling valued, appreciated, and recognised take over."

In fact, a study by Reward Gateway, found that almost half (49%) of British workers would leave a company if they weren’t regularly thanked and recognised for their efforts. 

Whilst remuneration is important, ensuring this is wedded with thoughtful management will keep great employees in the business.

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