It’s almost impossible to watch the news or follow social media without hearing at least one side of the debate for raising wages. Last year The Wall Street Journal and Vistage International conducted a survey of 728 small business owners across the U.S., from a range of industries, and found that small business owners were evenly split in their opinion of raising the minimum wage, with about 49% of respondents saying the federal minimum wage should be raised, while 49% disagreed.
While reasonable arguments can be found on both sides of the fence, one thing that is certain is that businesses must revisit the issue of wages in their overall workforce strategy. In our last post, we mentioned that our employees can’t help comparing what they’re making to what their peers are making, both inside the organization and out. Last week, Costco announced that it will be raising wages for both new and current entry-level workers in the U.S. This means that Costco will be paying workers at least $13 an hour. Even those who don’t work in retail will be comparing their pay to that of Costco. Analysts suggest that, as the economy adds jobs, retailers will have to start paying their front-line employees more if they want to retain them.
Couple the Costco wage increase news with the increase Walmart announced a few months back, and it is easy to predict that the U.S. labor market might be tightening. February’s Department of Labor monthly report showed strong hiring in the U.S. economy as evidenced by the addition of 242,000 jobs and a steady unemployment rate of 4.9%. The U.S. economy has been adding jobs 72 months in a row. As the economy improves and job openings become more plentiful, it is safe to assume that workers will have more opportunities to jump from job to job in search of the best wages.
According to The Atlantic, many businesses are reporting that the competition for low-wage workers is growing and it’s harder to find employees to fill vacant positions. The Wall Street Journal reports that one third of small firms stated that they had lost workers due to higher wage offers by competitors or other businesses.
Of course, it’s not always feasible to adjust wage scales. If this is the case, then it’s time to revisit other ways to keep your employees motivated, productive and loyal. In terms of keeping your employees happy, money isn’t everything. But it helps.
Do you think wage increases outside of your industry will have any impact on your workforce? Weigh in by commenting below.