We all know that money isn’t the only thing keeps people working hard at their job and it isn’t always the key component in making someone move to a new employer, but it is certainly an important factor and one what shouldn’t be undermined or ignored.
For an employee a good salary can help them lead a decent life, have a safe place to live, help them feed their families and to enjoy things other than just the bare necessities.
For an employer there are so many things that need to be considered when it comes to their people strategies and there aren’t many more important than how they pay and reward their workforce. They need to consider company costs on salaries versus incoming monies, they need to think about their competitiveness as a recruiter and they need to consider where money is best spent for example is it on higher wages or process efficiencies.
Here at Talent in Logistics we have some thoughts on this, as we believe (and so do many others) that salary levels can have a direct impact on employee engagement. With employee engagement comes increased productivity, customer satisfaction & compliance and in turn reduced absence, attrition & accidents. With all of these benefits there is a strong and almost undeniable link to say that better pay will lead to better company success.
So whilst increasing salaries may seem unachievable and difficult in the short term. The benefits in the long term will be a worthwhile investment.
Still not convinced, here is a little more detail to motivate you to make the change that is needed and maybe even highlight some cost saving opportunities;
#1 Doing the Right Thing
If you have employees doing a good job, which is valuable to your business, and is vital to its success they deserve to be rewarded for it. That is just the right thing to do!
This will show that you care as an employer, if you share some of your profits by giving your workforce a pay rise each financial year rather than just lining the pockets of shareholders, it shows that you believe in equality and helps your workforce feel like the valuable asset that they are.
#2 Increased Productivity
A higher salary tends to lead to a culture of high performance and productivity, people will work hard to prove that they deserve to be earning more than the employees at competitor companies.
It will also bring with it more focus because they won’t be worrying about external factors, such as whether they will last until pay day with all their bills and outgoings, can they afford for the car to fail its MOT or that expensive school trip for the kids…
Let’s recognise another potential benefit here – the more productive and engaged people you have, the less people you will need. This can help you save lots of money on salaries and having a smaller and leaner team also brings its own benefits such as increased clarity, cohesion and reduced administration.
#3 Keeping the Talent Within
When you have worked so hard to recruit and develop your talent in order to get them to a high performing and productive stage, would you really want them to leave? If you compensate your employees well they are more likely to stay with you and if they have worked for you for a while they will have strong relationships, understand what you are trying to achieve as a business and how they fit within that.
The recruitment cost can be expensive and so reducing attrition is the best thing in order to avoid significant costs. It’s about the bigger picture here, paying an employee £1,000 per more per year, could save a recruitment and on-boarding cost that can run into tens of thousands.
#4 Talent Attraction
In Logistics, as with many other sectors, we are experiencing a huge talent shortage. How are you going to stand out from your competitors to attract the best drivers, the top planners and the strongest leaders? There are lots of things you can have within your benefits package to attract people, but one sure fire way is to offer an attractive and maybe ‘above average’ salary.
Once you have recruited and you have shown them all the other benefits that working for your organisation can bring, maybe these new recruits will help attract more top talent – word of mouth is a powerful thing after all.