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5 reasons you should pay your warehouse employees more

9/15/2020

5 reasons you should pay your warehouse employees more

Typically, the biggest expense for any business is the cost of maintaining or growing the internal workforce. Labor is expensive, and the reason for that is simple: You need people to make your company run. However, it's generally advisable to make sure your salary or benefits offerings are as strong as possible, because you want to not only be competitive with other companies in your area that do similar things; you want to stand out from the crowd.

How can you do that? By paying your employees more. There are a lot of good reasons to do this, including the following:

1) Increase retention

First and foremost, you need to make sure you're taking care of your long-tenured workers so they don't start thinking the grass is greener elsewhere, according to HR Payroll Systems. Many businesses that have a relatively low pay ceiling for workers, even those who have been on the job for years, may be more susceptible to "brain drain" as talent both in the warehouse and the back office could leave if they feel they're not properly valued or compensated.

2) Attract talent

Of course, higher pay levels for employees — even at the entry level —is what allows you to hire great workers in the first place, giving you an edge on your competition, HR Payroll Systems advised. Without high pay, there may be little to differentiate you from a number of other businesses in your area, and all the "good culture" in the world might not be able to fix this very basic issue.

3) Boost productivity

Many companies seek to keep employee pay as low as possible to maximize their bottom lines, but doing so is actually at loggerheads with the goal, according to The One Brief. The reason why is simple: Study after study shows that workers who earn more money are also more productive, meaning you will typically find that people work harder when they feel they are being adequately compensated.

4) Increase engagement

Likewise, workers who earn higher levels of pay tend to have a better attitude about coming to work and getting the job done each day, The One Brief added. Engaged workers are more aligned with the company's mission and willing to put in that extra 5% or 10% effort on a daily basis to get the job done quickly and correctly. Furthermore, they may be more likely to stick around for the long term.

5) Cover the local cost of living

Finally, there's a more practical reason for making sure your salary offerings are relatively high: You want to ensure your workers can afford to keep working for you, according to Fundera. In many parts of the country, the cost of living is rising — sometimes sharply — each year, and you should not want to create a situation where your employees have to move farther from your building just to make ends meet. Keeping their commutes short and ensuring they can comfortably afford to live in your area should be an easy decision to make.