The cost of doing business keeps going up. From property taxes and leases to food costs and raw materials, there’s not a lot that employers can control in order to stay profitable while dealing with the competition.
One of the only things you can control is the cost of labour, and there’s always pressure to keep that part of your expense sheet under control. But that’s not the whole picture. While squeezing labour costs can help your balance sheet in the short term, what about the longer-term costs of turnover, lower productivity and less than stellar customer service?
The truth is that low wages, erratic hours and poor benefits lead to employees who are disengaged, less productive, and quit more frequently. And in the long-term, it all adds up.
In British Columbia, the average cost of processing the turnover of a single employee is $22,750. That’s the cost of posting a job, conducting interviews, training and onboarding a new hire and all the paperwork that comes with. It’s more than just money though, all of this takes time – time managers and owners spend on HR and training instead of helping customers or growing their business.
THE VICIOUS CYCLE
It’s gets worse though. Low wages and poor benefits lead to a workforce with high turnover and low productivity so managers and owners need to pick up the slack.
This means they have less time to spend on hiring and training, resulting in new highers that are often a poor fit or not taught how to be successful.
Eventually staff quit or are fired, costing you more money and leading to a bigger squeeze on wages and benefits.
It’s a vicious cycle that never ends well. And not only is it expensive, it’s bad for customers. We’ve all had it happen to us: maybe it’s an overworked customer service rep that has no time to tell us where to find what you need, or a restaurant with food that’s great one week and mediocre the next. Low wages, no benefits and erratic schedules mean workers are stretched thin, don’t have time to help customers and aren’t trained to jump in and help when things get busy.
Good Jobs: good for workers, good for customers
and good for business
It’s time to turn conventional thinking on its head. Instead of seeing labour as a cost driver, more and more successful companies are seeing it as a success driver.
Workers who are well-paid, well-trained, and well-motivated are more productive, provide better customer service, and save employers from wasting their time with endless turnover. Less time covering shifts, onboarding new employees and fixing errors means more time focusing on your customers and thinking about how to grow your business.
In a sea of companies who are choosing low-wage, low price and low customer service models, giving workers good jobs gives your customers a compelling reason to buy from you instead of someone else.