Can paying employees more make a business more profitable? The Warehouse Group thinks so.
The retail giant has put in place a “career retailer wage” policy that includes a new wage band for workers who have completed their job training and done at least 5,000 hours on the job,
The Press reported.
The policy applies to all the group’s businesses, including The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo 7 Group and will change the base hourly rate for non-commission workers from between $15 and $17, to between $18 and $20.
It will reportedly cost the group nearly $3 million.
Group CEO Mark Powell told The Press that the policy was aimed at retaining and motivating customer-focused workers.
“Far too often retail is seen as a second-rate career choice. We want to change that view and show that working in retail is exciting, challenging and financially rewarding too.”
The Warehouse also plans to provide training programmes to advance retail as a career option.
Despite the cost of higher wages and training, investing in employees can make organisations more profitable.
According to research by Zeynep Ton, an adjunct associate professor at Massachusetts Institute of Technology’s Sloan School of Management, large organisations like Costco in the US proved more profitable than competing organisations because they offered higher wages.
Inc.com reported that Ton came up with four strategies to turn employees into revenue-generators, rather than costs to the company.
They included investing in workers with better pay and training, offering fewer unique items in stores so that employees can be properly informed about the products they are selling, having standardised systems that employees feel empowered to use and operating with more employees rather than fewer, to provide a buffer if things go wrong.
“These choices work well when you invest in your people,” said Ton.
“If you invest in your employees, they’re more productive. All decisions should be good for employees, good for customers and good for investors. It creates a virtuous cycle.”
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