Is Low Pay the Reason for High Employee Turnover?
Is your business running like a finely tuned machine…
…or like an engine that’s missing a few parts – and in desperate need of an oil change?
If it’s the latter, your pay rates may be to blame.
The Problem with Low Pay Rates
Below average pay rates can have a dramatic negative impact on your company’s morale, productivity, retention rates and ability to attract great workers. Research proves it. In 2018, PrideStaff conducted an online survey with more than 2,100 individuals located throughout the U.S., on how pay impacts the job search, job satisfaction, work performance and retention. Here are a few high-level takeaways:
- Pay is the most important factor to job seekers. More than 85% of job seekers rated pay/compensation as “extremely important” when looking for a job.
- Pay rates are closely tied to job satisfaction levels. More than three-quarters (76%) of survey respondents rated pay rate as being “extremely important” to their job satisfaction.
- Increasing pay rates can quash turnover. Among job seekers surveyed, “higher pay” was the most frequently cited reason people quit their last job. By proactively increasing pay rates, you can keep more of your high performers.
Related post: Do You Have a Retention Problem?
The bottom line? Paying people well pays off for your business.
In the long run, employees who are paid fairly are more productive, efficient, engaged and loyal – all of which build a healthier bottom line for you. So, if you feel like you’re constantly “shopping for parts” to complete your company’s engine, or if the proverbial gears aren’t moving like they should:
Download PrideStaff’s whitepaper, “The High Cost of Low Pay Rates.” Packed with insights, this resource provides guidelines to help you answer critical questions like:
- What should you do to ensure you’re compensating your staff in ways that maximize both performance and retention?
- Are you paying enough to recruit effectively in a tight employment market?
- Are your employees satisfied with their current pay, or could a competitor easily lure them away?
Reevaluate your pay rates. Consider the following factors:
- Salary survey data. With a little searching, you can easily find up-to-date pay rate information relevant to your available roles and geographic area.
- What other businesses in your area are paying. Non-competing business colleagues, your local chamber of commerce and/or business networking group can help you garner additional pay range data.
- Talent market conditions. How plentiful are qualified candidates? Obviously, the tighter the market, the higher you’ll need to pay to attract good people.
- The real cost of high turnover and diminished performance. If you’re continually filling holes, training new employees and dealing with poor productivity and morale, how much is that costing your business? Even a small bump in pay rates could create improvements that pay for themselves many times over.
Is your business paying a high price for low pay rates?
Download PrideStaff’s whitepaper, “The High Cost of Low Pay Rates.” to determine if you’re paying enough to run your business like a well-oiled machine.