Is it good employer strategy to pay my employees just enough so that they can’t save money, so that they can never walk away from the job?
Like, there is a threshold where if they are able to save X per month, they will eventually use that against you and quit at an inopportune time?
And if that threshold falls below state mandated minimum wage, what steps can be taken to mitigate this?
Yo it’s no stupid questions, not no evil questions.
It is a terrible employer strategy that all but guarantees you will have a high turnover rate as people use their off hours to find better paying work.
It also ensures any public you have to face will consistently be interacting with a work force that could not give any less of a fuck, because you are literally not paying them enough to.
The only conceivable way this is a good business strategy is if you are either a short term seeking nepo baby, get all your business advice from one, or are yourself a complete and utter drooling moron who has never once taken even a beginner’s course in proper employee retention.
Do. Not. Do. This.
Doing this is the kind of advice Boston Consulting Group would give shortly before Citadel cellar boxes your company.
It’s a seriously bad idea. pay shit, get shit employees. It will see OP’s company providing shit service, cost more in both turnover and having to fix the shit that their shit employees shat all over, as well as driving customers away.
It’s also immoral.
And yet it seems to work for Walmart. Or am I missing something?
Is Walmart typically known for having highly skilled, dedicated workers?
Or desperate folks that would leave for another opportunity without a second thought?
I guess, “it works” but I wouldn’t say it’s REALLY working.
Your best employees will be snatched away by other companies, offering them an onboarding package that takes care of the cost of moving. Your worst employees will be forced to stay with you.
There is the old saying that “People don’t quit jobs, they quit bosses.” My advice is to go to therapy first, I think the question will sort itself out after that.
You’re paying for labor. If you’re the cheapest option retention will be poor, knowledge and experience will leave and your business will (and should) suffer.
Penny wise, pound foolish.
Pay peanuts get monkeys
This isn’t actually a serious question, right?
Gotta be flamebait.
I think it’s frustrated role playing.
Look at me! I’m a fancy businessman! Hur dur dur! Pay cuts for half of you and pink slips for the rest!
It’s insane to think it’s genuine
It sounds like you’re looking for slaves. There’s a reason slavery is illegal.
If this isn’t deliberately rage bait, there is something very wrong with you.
Nope, it’s a terrible one. Everyone will be constantly looking for new jobs. And would do the bate minimum to not get fired, that’s the contract you’re signing, bare minimum pay for bare minimum work.
Regardless of what you do, it’s likely that you’ll need multiple times the amount of employees to get shit done, because one dedicated employee is worth several doing bare minimum, depending on the job some works simply won’t happen because no one gets paid enough to do them.
Besides that you’ll suffer brain drain, i.e. anyone good enough will leave you, and they won’t accept a raise to stay because if someone offered them double their salary and you tried to match it they would immediately see the bullshit you’d put them through and know that the only way to get a better pay again would be to get a new offer from someplace else.
Anyone bad enough that other companies don’t want would be stuck with you, but there’s a reason other companies don’t want them.
You wouldn’t be able to pull any new talent, you’d get stuck just getting people no one else wants because they’re the only ones willing to work for that low.
Seems to work for Walmart though
Only because they massively displaced a shitload of local business. Same with Amazon. If you have very little skills, where else are you going to work?
Nobody has really answered the last part of my question. I’m not asking whether or not this is ethical, I’m asking how can I keep the employees who don’t leave in a state of perception where they think I’m ready to fire and replace them at any moment. I don’t want them to realize their position and leverage it against me.
I’ve been thinking about holding the promise of upping wage by a dollar and to keep pushing out the date as means of helping them realize how easy their work is. I’m not going to allow non-committed hires to devour the value of my business over what amounts to easy work. They know it’s easy work.
This is pretty good satire, and I gotta give you props for sticking to the bit, LunchMoneyThief.
What steps can be taken to mitigate this?
Be an employer of choice. What can you do to make people want to work with you, not out of necessity but because you are better than the alternatives. (Pro tip: if you’re paying the lowest rate you’re allowed to without braking the law you better be offering some other incentive)
There’s an alternative strategy of making it a place they’re happy to work at. It’s more expensive, sure, but it gets you better workers instead of only the desperate.
Happy workers stay longer and don’t leave rotting fish in the vents right before quitting out of frustration.
No, maslows hierarchy of needs mandates a lack of savings equating with a lack of stability at lower tiers and hence your employees will fail to function at higher levels. So you need to pay more than minimum rates in every role, everywhere, if you want to actually have people and not worried as fuck drones.
Now, how much more depends on local factors - but here’s a quick rule: if they add value to your business pass on about 25% of that profit from that individual. Finding a profit for a person can be challening, this is why you get a HR person and accountants.
Wait so are employees lucky if they get 25% of the money they earn their employer beyond their cost to the employer?
That is, if I cost 100k including benefits and support staff costs and my work directly generates 200k profit over all costs, does that mean that the business should pass 50k to me and take the remaining 150k in order to follow the quick rule?
Yup, welcome to capitalism!
The money they earn is income, not pure profit. The business usually has other expenses that have to be covered. In that case 25% is usually not a bad deal.
I attempted to clarify that I understood that the income of the employee is not part of the profit
25% is a terrible deal and that was my point
Rule 1: No stupid questions.
Every question in the group is a stupid question. That’s the point of the group.
We just aren’t allowed to belittle people for it. We can’t treat them as if it’s a dumb question. We have to answer their question if responding.
Is it good employer strategy to pay my employees just enough so that they can’t save money, so that they can never walk away from the job?
Yes! That’s how an average slave labour company works, you hire someone, you make them work long hours so they couldn’t have 2nd job or hobby, you pay them at the minimum wage, you lower their self worth and self esteem, and you put up all the barrier of quitting that’s actually illegal but they don’t dare to even test it. It’s the best strategy to keep yourself afloat and them underwater.
Like, there is a threshold where if they are able to save X per month, they will eventually use that against you and quit at an inopportune time?
Yep, there’s two way of employee retention, one is pay them good and treat them good they can’t even go through the bothersome process of searching job, another one is pay them just barely enough and trap them physically and mentally, drilling the learned helplessness into their mind so it’s impossible for them to even take the first step. Of course you’ll want to take the latter option because it’s the best slave labour strategy and maximise your own return!
And if that threshold falls below state mandated minimum wage, what steps can be taken to mitigate this?
You move to another state with lax law and force your employees to move, of course! And if that’s not an option, there’s always gonna be a pizza party on friday night.
Remember, the less money you pay for your employees, the more money you pocket yourself. Get yourself a Titanic tour ticket, you earn it!
I don’t appreciate the sarcasm. Things have become tight. And after some knuckleheads couldn’t handle basic tasks in a basic industry, I have found we are able to operate with just half of the staff I used to pay. The ones who stick around know their worth.
What I’m worried about is that the remainder will also try an leave, knowing that I rely on them more than ever before. So my angle is to obfuscate the fact that I actually need them. How do I make sure they can’t read me on that?
Maybe it’s time to admit that you are bad at this and you should do something else besides trying to run a business. It’s clearly not your forte.
I don’t appreciate the sarcasm.
Good. That’s the point.
It’s a shaming tactic that you aren’t supposed to enjoy.
Let’s look at Walmart and see if this strategy works. Yup seems to work.
I read it from the masterpiece book, How To Be A Slave Owner by Jeff Bezos
Good strategy is to pay me just enough so that I get too lazy to look for another job. If I can’t save, I’m out ASAP.
Focus less on trying to stop them leaving and more on giving them good reasons to stay.
