Employee pay is the most important factor a job-seeker considers when looking for work.
In a survey of over 30,000 workers, employee pay ranked highest among qualities workers look for in an employer. This survey has shown this trend for the past 13 years and counting, which means that it will likely not change anytime soon.
How do you stand out from the crowd?
Offering a pay structure based on living wage versus minimum wage or competitive pay would be one option.
To calculate living wage, you add up all of a person’s basic living expenses. Household size determines different tiers, such as a single adult, a two-adult household with children, etc. This calculation includes expenses ranging from housing, to groceries, to childcare and everything in between.
Living wage varies by location. Once you have determined the average cost of living in your area, you can use that to determine what to pay your employees.
Note: It is still important to compare your wages to other companies in your markets. This helps to ensure that your pay structure is competitive.
Employers who use this model have seen is that there is a reduction in worker turnover.
Why? Because the cost of basic living expenses is covered by the wages their employees are earning. This means they no longer need to worry about how to pay for life’s necessities.
Research shows that companies who pay a living wage have recovered faster and outperformed other companies since the start of the COVID-19 pandemic. The chart, below, shows that companies with the highest percent of workers making a living wage returned 12.3 percent. Meanwhile, the companies with the lowest percent of workers making a living wage only returned 1.1 percent.
Takeaway: Employee Pay
The wages you are paying your employees need to stand out from your competitors. This will not only tell your current employees that you value them, but it will help you increase your candidate pool.
Each day this week, we are covering a topic related to improving employer attractiveness in the eyes of job-seekers. Miss one? Check out the full series here.