If you’re not paying your employees according to their market value, it may save your company money in the short term – but at a big cost over time. Just because employees will step their foot in the door for a low pay rate doesn’t mean they’ll be willing or able to sustain it. Turnover leaves you to deal with high turnover and the accompanying loss in productivity and increase in advertising and training costs. Learn more about why low pay rates hurt retention rates:
Pay Rate Doesn’t Cover Employees’ Financial Obligations
Ensure that your pay rates align with the cost of living in your area. No matter how much employees love their job, colleagues, and other perks, they often have to move on if the low pay is prohibitive to their financial obligations. Taking measures to keep employees satisfied is commendable, but it can’t make up for being underpaid and can make their decision to leave more personally disappointing to them.
Low Pay Can Make Workplace Morale Plummet
The compensation employees receive reflects on how valued they are by the organization. Low pay rates can negatively impact workplace morale because it can seem like leadership simply doesn’t think their work is worthwhile enough to pay higher wages. Once morale starts to plummet, employees start looking elsewhere for an organization that appears to value their work.
Being Known for Low Pay Can Affect Branding
With online reviews and social media, candidates can learn more about employers than ever. If your company becomes known for its low pay rates, you may no longer attract top talent and have to settle for mediocre candidates. By not having the pick of top prospects, your retention rates may end up dropping because of poor performance or lack of commitment.
Low Unemployment Gives Them More Opportunities
Times have changed in the job market. With unemployment dropping lower and lower, employees simply have more options for jobs that pay more. Since they don’t have to feel stuck in a job, like when the economy was struggling, they aren’t likely to stay at a place with low pay when a variety of competitors are willing to give them more.
Retention starts during the initial hiring process. Rebrand your company and find committed, top talent by working with the recruiting experts at IMPACT Payments Recruiting. Our recruiting team consists of experienced payments industry veterans who have the direct knowledge to evaluate the candidate pool to find the top talent and best fit for our clients. With a retention rate that currently exceeds 94%, IMPACT has the results to prove our dedication and knowledgeability for payments industry recruitment. Contact IMPACT to learn more about how we can help you with your recruiting needs.