Every HR professional knows that when an employee is fully engaged in their job, they are investing themselves in their job – skills, creativity, energy, determination, and more. Engaged employees have not been shown to have a positive impact on business outcomes.
How does employee engagement correlate with low wages? Global companies are increasingly under pressure to do more with less, and old-school methods of lowering salaries – even if they blow them up – only serve to reduce engagement. The new school method of hiring concert workers as contract skill units is underpaid when they are not helping.
Employers can improve employee engagement in a low pay environment. Paying more is not the only way forward; there are other imaginative, fair and supportive initiatives that can be taken to address employee financial wellbeing concerns and offer more to low-paid employees.
The low-paid, belittled, zero-hour is focused on survival, not performance.
The impact of low wages on employee engagement
Even the most dedicated employees can’t focus on the job if they’re not sure they can hire this month. In the UK, research by Close Brothers found that financial anxiety is one of the main causes of stress in workers, affecting their mental health and productivity. Neyber estimates that in the absence of a financial burden, the UK economy costs £ 15.2 billion a year, reducing productivity and selling costs.
Is the answer paying more?
To some extent, yes. Money is a motivator when you don’t have enough money to cover Maslow’s basics such as food, shelter, and security for you and your family. A study by the Chartered Institute of Personnel and Development (CIPD) found that the four most important aspects of workers’ financial well-being are:
- Get a salary that’s sufficient for a sensible lifestyle
- The opportunity to save for the future
- You will be honestly and consistently rewarded for your efforts
- Be ready to pay off your debts with ease
This is not wild desire. Paying a living wage is not only ethical, but it also makes business sense. In the United Kingdom, companies are accredited by the Wage Foundation.
The Living Wage Foundation works to earn a salary that people can use to live on. Accredited employers include one-third of FTSE 100 companies and big names like Unilever, as well as typically low-paid companies such as contract cleaning companies. A Wage Foundation accredited employer describes several business benefits, including:
- Increase employee motivation and loyalty
- Increased business reputation
- Better differentiation in their sector
- Better manager-personal relationships
It should also be noted that benefits are not only focused on employees. Communities have begun to reward companies that they believe are doing the right thing. 93% of students prefer to work for an employer with a minimum wage, and 60% of consumers agree that wages should reflect the cost of living. Global connectivity means it’s not easy to hide the lowest shadow payouts. Making a living raising the brand.
But paying more is not the only way forward. Here are four more ways to deal with employee financial well-being:
1. Ask what is important
Instead of accepting what is important to employees, ask and document. By using employee feedback, companies can better distribute rewards. Employees at different stages of life have different financial burdens: paying off debts, saving for the first home, health care for older parents, problems with children, or questions about how to retire. This will give you useful information on the combination of engagement approaches to use. If you ask the basics, the company’s talk of financial well-being will also begin, and a bottom-up approach will win a lot more.
2. Check barriers to paying down payments
The CIPD study also found that workers trying to make progress were often “stuck” at the lowest wage levels, which correlated strongly with part-time jobs and single parents. Also, it is possible to avoid a small reduction in costs as the employee ages. He also found that it was easier for workers to increase their salaries by changing employers than by increasing their salaries.
Help attract aspiring workers by creating:
- Meaningful and clear ways to get higher wages
- Training and development opportunities to increase income potential
- Design work that supports your growth
3. Offer education and financial support
By empowering people, information, and tools to take steps to improve their financial well-being, they will feel more in control of their finances and reduce stress. Every employee is different, so a personalized approach is essential. Education and financial assistance can take many forms, but include:
- Improve financial literacy such as planning and budgeting, understanding interest rates and credit scores
- Access to a debt counselor or independent financial advisor
- Offer an employee support program
- Helping employees manage taxes effectively
- Promotion of the use of existing company profits
4. Offer personalized benefits
But the pay is only one aspect of merit. The awards include annuities, health insurance, incentives, benefits, share purchase programs, and many more. Vacations, flexible work, and skill development are part of this reward as are the broader employee experience – such as feelings of autonomy, increased commitment, and feelings of appreciation.
One area that employers need to pay attention to is flexible benefits. At first glance, with a list of menu options, this scheme looks generous and attractive. However, they are expensive to source and employees reasonably suspect they can get a better cash deal than companies or middlemen with group purchases. Benefits of instructing employees to customize the list of choices for the following items:
- Early retirement courses and gradual retirement options
- Vouchers for child care
- Discounts for employees
- Automatic saving
- Flexible contracts such as shorter weeks, longer holidays, or weekends
They can be replaced by personalization, which allows employees to turn their services into cash. For many people with marginal income, this will be very grateful.
Giving more to low-wage workers is not only good for individuals and businesses but also for society. Inequality is currently the most significant destructive force in national and international politics and a cause of conflict, mass migration, and populism. Companies that engage in imaginary, fair, and supportive initiatives with their poor pay problems are working to make the world a better place.