Several states, as well as the federal government, have raised the minimum wage, and more could do so in the coming months or years. Studies show that a higher minimum wage impacts smaller businesses more so than larger companies, but all businesses definitely feel the effects. What will a higher minimum wage mean for your business?
Companies Will Learn to Do More with Fewer Employees
Frankly, few companies in this economic environment can afford to pay more for their lower-skilled labor, such as janitorial services, mail room employees, receptionists, and office runners. A higher minimum wage will force companies to streamline staff. Some will opt to charge their higher-wage employees with tasks generally deemed “beneath” their pay grade, and others will simply require their unskilled labor force to double up on their responsibilities.
Companies Will Outsource More Work
Outsourcing is another way to do more with fewer workers. Virtual receptionists, for example, mean one less person on payroll, but calls are still answered, and customers are unaffected. Companies will likely outsource other responsibilities, including information technologies, accounting services, cleaning services, and other non-production jobs.
Companies Will Demand More from Those in Management Positions
As the size of the company’s workforce decreases, managers will be charged with taking on more responsibilities for themselves, as well as making sure that all existing employees maximize their time and efforts. In the long run, companies might be better served by paying excellent managers more to get more done, thereby eliminating a number of lower-paying positions.
Companies Will Need to Improve Employee Training
Doing more with less means employees must be well trained to do all of their assigned tasks well. Some companies will choose to train all of their employees for production and development, and opt for a call center to handle customer service work. Taking phone responsibilities off their shoulders can free workers for a variety of other tasks, as handling customers on the phone is quite time-consuming.
The more creative a company can get about maximizing resources, the less of an impact the higher minimum wage will have on their ability to thrive.