Invest in your employees. It can be
good for your business.
It sounds like a no-brainer – the higher you pay your
employees, the lower your profits will be. Well, actually, this isn’t true. In
fact, sharing your wealth with the people who helped you create it can be very
good for your business.
By paying your people more, they will be able to buy the
products and services they need. In addition, the companies selling these
products and services to the average American will have more room to grow. If the
average American, who is the primary engine of economic growth, receives higher
salaries and wages, then there is no doubt that the US economy will prosper
beyond our wildest dreams.
The Sad Reality
Unfortunately, this is not the case. A lot of America’s
biggest companies are obsessed with increasing their profit margins even if it
means depriving America’s middle class of their purchasing power. What they do
not realize is that their obsession may be hurting their ability to bring
in even more profit.
These companies are so engrossed in minimizing their costs (a
lot of them consider their employees as “costs”) and achieving record
profit margins that they tend to forget that their employees are also among
their current and prospective customers. They tend to forget that the lower
their employees’ wages and salaries, the less they can afford to buy the
products and services they are offering. Instead of investing in their people,
a lot of companies choose to maximize their profits. No wonder the US economy
is the way it is now.
How to Ensure Better
Profits for Your Company
Instead of focusing on creating higher profit margins, you
should consider the following suggestions to take your business to the next
more in your people. You can get better profits by investing more in your
employees. By paying higher wages, you can expect your employees to do a great
job and provide better service since they wouldn’t be worrying about where they
would get the money to pay their bills. Remember, excellent
customer service fosters customer loyalty and improves productivity, but lousy service can ruin your business. You should also provide additional training
and healthcare benefits to your employees since these can further improve
productivity at work.
offering less. While this may seem counterproductive, it actually makes a
lot of sense, especially for retail businesses. By maintaining fewer items in
your inventory, you can avoid the “phantom inventory” phenomena (the
discrepancy between the inventory balance and physical availability of goods at
a storage location). Your employees will know where everything is and you will avoid
people. Instead of employing fewer people and demanding that they work at
more than 100% capacity, you should consider hiring more people to avoid
serious problems down the line. By employing more people and empowering them to
fix small problems when they see them, you can expect to get problems fixed
before they get blown out of proportion.
Now you can see why paying your employees more can
positively affect your profits and be good for your business.