Recently I examined the growing movement today for employers to pay employees more.
The statistics and economic realities are making a lot of folks question the pay levels of businesses.
As my prior article stated just paying employees more, as a blanket proposition, can be really bad business. It could even kill many businesses.
But the good news there are avenues for us to pay our employees more.
A little thinking and a little strategy and maybe we can change the world.
#1 – It’s All About The Value Chain
At the end of the day businesses are paid to add value. This means offering a good or service to a customer at a price that the customer thinks it’s worth the sacrifice.
That last car you bought you thought was more valuable than the amount you paid for it. Otherwise you would have kept your money.
Ditto your refrigerator. And your last dinner.
We, as business owners and leaders, usually are focused on the value chain. But that doesn’t mean everyone is.
There’s a world of opportunity to get everyone thinking about value and how what they are doing adds value.
If we can get our businesses creating more value we will have more money to work with. And that will create opportunities to pay the employees that are adding value more.
#2 – Increasing Value Can Be Part Of Your Culture
Focusing on value is the start. Making value creation part of your culture is the next step.
Most businesses know their value. And they know why their customers hire them.
But few businesses have value creation as part of their culture.
Could you make innovation and improvement part of what everyone does?
I bet you can.
If you can sow value creation into your culture and get every employee thinking about it you may find that your business is creating more and more value for its customers.
#3 – Pay Employees For Adding More Value
It’s not enough to just have employees add more value.
Here’s where the win for the business and the answer to cries to pay employees more comes together: you align your compensation structure with value creation.
This step requires knowing your value. A culture of value creation is also critical.
When you are focused on value creation you’ll be able to know what is valuable and what is not. Further your employees should be focused in on value creation so they’ll know where the value is.
So if an employee can add customer benefits, eliminate costs or move to a new role where they can add more value then they have created the money to pay them more.
This can create a reinforced cycle of growth.
#4 – Pay Employees To Leave (The Right Way)
As you implement this system, and even after its been in place for a while, you’ll find that many times you encounter employees that don’t fit.
Some employees won’t embrace the value creation philosophy. Some employees won’t add much value in your business.
Regardless of what happens it’s a good idea to efficiently part ways as friends.
Todd Saylor has been using a system of paying employees to leave, the right way and on good terms, to keep his businesses in tip-top shape. I talk about it in this article (check out the linked video too). Todd is an amazing revolutionary thinker about changing business.
#5 – Encourage Growth In Job Roles
With a value-added culture and a system to exit employees that don’t work for your business it’s a great time to encourage growth of your employees.
I’ve long had a philosophy that I want to train my employees to replace me so that I can move to a higher level in my business. The more they do what I am doing today to more higher value functions I can do in the future.
Each of your employees should be striving to grow and add more value. Having them do so lets you pay them more as they move up the value chain.
Further more valued added in your business should lead to more growth. And more growth means more opportunities for everyone to advance – and get paid more.
What To Do Now
This is a multi-step process to build a whole new system of your business. It’s not something you can flip a switch on.
But you can start with focusing on value and having real discussions with your employees about the value your business creates and their role in the value creation process.
And if you want more help give me a ring. I’ve love to “get under the hood” and work alongside you to build a very special business. One where everyone can enjoy more pay. Not just your employees, but also you the business owner and leader!
LET’S DO MORE: If you are a business owner or leader let’s be in touch more. I’d love for you to read my online work and give me your honest feedback: join my mailing list, follow me on LinkedIn and jump into my Facebook Group.
NOTE: This article is a piece develop a small portion of the content of the book tentatively called The Journey: Finding Your Place From Entrepreneur to CEO being co-authored by The Our Shawn McBride and Ann Gatty. If you want updates on the book including the possibility of joining our release team or getting one of the first copies please join our mailing list here.
DISCLAIMER: This article talks about legal issues. I am a lawyer licensed in multiple US jurisdictions, but I am not your lawyer unless we have signed an engagement agreement. Please view this material as educational and general in nature (as it is). Consult counsel you have retained for advice on your specific facts and circumstances and applicable laws. Do not rely on the statements in this article as legal advice.
By: The Our Shawn McBride, is the business nerd and long-time business attorney that focuses on changes of ownership in businesses. He works with business owners that know their business is about more than themselves to get ready for their future through keynotes, training and personalized solutions. In furtherance of this he hosts The Future Done Right(TM) Show where he collects, digests and gives lessons and insights on The Future of Business. If you want regular content on the future of business subscribe to get new blog posts from us here.
You’ll quickly notice his unusual suits which he uses open the conversation of how businesses should Do Business Differently™.
The Our Shawn is based in DeLand, Florida (between Orlando, Florida and Daytona Beach, Florida) and Dallas, Texas where he keeps offices. You can also find Shawn on webinars or traveling nationally or internationally for speaking engagements.
Check me out at: www.planningdoneright.com
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