How To Pay Your Employees Less

Disclaimer: Opinions expressed by me are my own.


One of my old bosses used to say “Running a business is like driving a vehicle. There are only so many levers to pull and knobs to turn.”

As a business leader, you can change your product or service lineup or change prices. You can make a great deal with a supplier and save a few bucks. You can change your distribution system or write a snappy advertising slogan.

You can try different marketing approaches and work on the back end of your business, the supply chain and your manufacturing or production process. That’s about it. There are only so many levers you can pull or push on.

When you have employees, payroll is a major issue. Payroll could be your business’s biggest cost. You see the big number at the bottom of the spreadsheet and the thought is going to cross your mind, “How can I keep this payroll cost down?”

Hiring employees for less than they deserve is the worst possible way to save money. If you think of a stream or any naturally occurring energy flow, it’s easy to see that you want the stream to keep moving. You want the water to move as fast as it wants to.

Any energy blockage is bad. Anything that slows you down is an impediment and an opportunity for your competitors.

If there were a logjam in your sales process, you’d remove it. If your IT systems weren’t up to the task of supporting your business such that people were wasting time dealing with outdated systems, you’d address that and clear away the blockage.
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When your employees are underpaid relative to the market, they know it and you can’t pretend you don’t know it, too. You have to pay people well to take the topic My Compensation off the table and allow the energy to flow.

People will move heaven and earth for you if they’re allowed to — meaning they’re given the latitude and discretion to bring themselves completely to the job and the mission.

Corporations and institutions slow down and stop the forward energy that should power their teams. They do it by a thousand little cuts — policies and rules that treat talented adults like children, for starters.

They impose restrictions and required approvals for every little decision. That’s how fear hurts our businesses and institutions. Bureaucracy springs from fear – fear of change and of not being in control.

Paying people too little is the biggest energy blocker of all. Who can concentrate on doing a great job when they’re worried about how to pay their bills?

Emotions are real and they can push your organization forward, slow it down or stop the motion altogether. When people feel undervalued, naturally they become resentful — and can we blame them?

If you aren’t paying at the top of the market, you’re doing your shareholders and customers a disservice. The most switched-on and talented employees are not twice as good as average employees.

They are five or ten times more effective, especially when the whole team is energized around an ambitious goal!

A dollar of payroll saved is a hundred or two hundred dollars squandered in an effort to be cost-conscious. A payroll dollar saved is the original penny-wise, pound-foolishness of a manager who can’t see the forest for the trees.

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Source: http://www.forbes.com/sites/lizryan/2015/12/19/how-to-pay-your-employees-less