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Invest in Employees and They'll Invest in You

Invest in Employees and They'll Invest in You
From Recruiter - July 27, 2016

Giving raises and high-quality benefits packages to workers can get expensive. Every executive knows this. Many corporations have locked into annual raises of 1or 2percent to save a buck. Others have cut corners by forcing employees onto high-deductible insurance plans, reducing company contributions to retirement accounts, or cancelling profit-sharing and bonuses.

But heres the thing. Employees really do notice all of those maneuvers. They talk about them in the break room, through instant messages, and during after-work drinks. The more dissatisfied your employees get, the less productive they will be. If their hard work goes unrecognized long enough, many will take the skills theyve developed, jump ship, and seek new employment somewhere else (often a competitor) that offers better pay and benefits. This trend has come to be called job-hopping,and has become a common way for employees to advance in theircareers and obtain recognition.

A pay increase is the right thing to do. Wages for many Americans have gone nowhere for too long, wroteJamie Dimon, chairman and CEO of JPMorgan Chase & Co., in the op-ed Why Were Giving Our Employees a Raise, published in The New York Times earlier in July. The piecedetailed the financial institutions plan to raise its internal corporate minimum wage from the current $10.15 per hour.

Over the next three years, we will raise the minimum pay for 18,000 employees to between $12 and $16.50 an hour for full-time, part-time, and new employees, depending on geographic and market factors,Dimon wrote.

The Impending Federal Wage Hike

While this move may or may not have beendriven by conscience, Dimons announcement comes in advance of a $12-$15 proposed federal minimum wage increase thats gaining traction in the American political landscape. Many American states and cities have already implemented higher minimum wages on local levels. Companies that get ahead of the federal increase will be in a much better position to meet new federal minimum wage requirements when they do come along, as opposed to companies thatwait and are forced to suddenly give out large raises.

One of the biggest fears for many businesses is that a federal minimum wage hike will bring new expenses they cant afford. One of the best ways to prepare would be to follow Jamie Dimons example and put a plan in place now that gives incremental raises over several years. That will allowbusinesses some time to adjust to the cost. While most proposed federal wage legislation also lays out incremental wage hikes, companies thatstart sooner will have more time to figure out how to work the increased expenses into their operating costs.

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