Throughout his presidency, Barack Obama has been outspoken about his desire to raise the national minimum wage. Since 2014, at least 10 states voted to increase their minimum wages, with many more state legislatures seriously discussing the issue. Some are poised to raise their minimum wage in the coming years.
A report from the White House claims that about seven million workers would benefit from a wage hike, but the report didn't address how rising payroll costs will affect businesses. If your company is in one of the states that has increased the minimum wage, or is looking to do so soon, how can you prepare for the impact this will make on your bottom line?Increase productivity over cutting hours
Many employers will immediately look to payroll costs as an area to cut. Some will consider layoffs, while others may reduce employee hours. However, that option increases the risk of diminishing the quality of your products and services. Instead of cutting employee hours to obtain the wage requirement increase, consider finding ways to make those hours more productive. Find places where efficiency and productivity can be improved so you get more out of your employees while they're on the clock.Examine controllable expenses
To combat the impact of the minimum wage hike, you will need to do a thorough analysis of your overall expenses, so that you can find areas where money might be wasted. Some solutions are simple – eliminate complementary coffee service or end service with any software or technology you rarely use. By closely examining your expenses, you will likely be able to tighten up the nooks and crannies that siphon funds.Communicate your expectations
If you have hourly employees, you need to open your office door and lay out your expectations for the wage increase. They may have heard about the national minimum wage rates in the news, but they may not know what that means for their jobs. Proactivity is the best preparation, especially with your managers and supervisors. Explain the wage increase, the impact it will have on paychecks and taxes, along with any other performance changes that will result from the hike.Get more selective with your hiring
With any kind of wage raise, it's important to assess performance with a high-level performance review process. When you bring in new talent, be sure they live up to these new expectations. Find candidates with a stronger skill set, look for applicants with longevity and take the opportunity to promote from within. If the position goes from $7 an hour to $10 an hour, then you can rightfully expect the quality of work to increase, as well.
Sometimes a company facing changes in wage regulations can benefit from partnering with a staffing agency. You can have access to highly trained temporary and permanent employees by joining up with Burnett Specialists or Choice Specialists. Our employment solutions bring temporary, temp-to-hire, permanent and payroll solutions that can boost your profits and productivity. Contact us today and get the support you need to achieve your business goals.