Wednesday, October 1, 2014
Bank to Pay Everyone at Least a 'Living Wage'
http://money.cnn.com/2014/09/29/smallbusiness/living-wage/index.html?iid=H_E_News
First Green Bank, located in central Florida, will be enforcing a new policy in the company which the founder/CEO refers to as the "living wage". These raises are equivalent to approximately double the state's minimum wage. Typically, wage increases are known to have negative effects on companies, causing their payroll expenses to increase to the point that it affects the company's ability to retain as many employees. LaRoe believes that although this may be true, these extra expenses on the company will be off-balanced by a higher employee retention rate, as well as attracting higher quality job applicants.
Previous policies at the bank had salary caps set in place so that additional wages could not be earned unless that employee received a promotion. LaRoe states, "That's just dumb, if you've got the best teller in the world, why don't you want to pay them the best wages?"
It is my personal opinion that choices such as these reap tremendous benefits for the companies who enact them - well over the amount given up by increasing their salary expenses. These benefits can include attracting and retaining the best in job applicants, attracting the business of people who respect companies who act ethically, and creating incentive for current employees to work at their highest level of effort and productivity.
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I agree with you Lindsey, I believe a policy like this will take a company to the next level. Employees will have reason to work their hardest at all times and actually feel like it's worth it. When wages are low, people tend to not work very hard because if they get fired they are not giving up much.
ReplyDeleteI respect companies such as First Green Bank that treat their employees well and pay them the wages that they deserve. I think these kinds of companies definitely end up with the best, most productive employees, as more people want to work in places where they feel as though they are appreciated and are rewarded for their efforts. I also agree with you that these companies attract more business from people who have respect for the way they treat their workers. I hope the benefits coming from higher worker productivity outweigh the costs of higher wages and a smaller quantity of employees.
ReplyDeleteI think this is a very smart decision by First Green Bank. I also think that the company will see definite benefits from this decision. However, I wonder if the founder/CEO will be seeing a decrease in his or her own wages in order to implement this policy. I wonder if in order to enforce this new policy, the founder/CEO will have to sacrifice some of his or her own income.
ReplyDeleteI definitely appreciate when huge companies realize there is more than just the goal of making a profit. Respect for employees can carry a company far in a way that money alone can't; high morale leads to higher quality employees, as well as respect from the public in general.
ReplyDeleteI agree that this is definitely good for the employees but I wonder where the corners will have to be cut to pay for these increased wages. You mention that higher retention rates and better qualified applicants will offset these costs but will this be enough? Obviously First Green Bank wouldn't implement this policy unless it was confidant it could handle the increased cost of labor but I am curious what they think will offset these costs.
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