When wage increases are futile – and what to do instead


I have long argued that all employees – regardless of their title, industry, level of education required, or salary the position commands – ALL EMPLOYEES want to do inspiring work and they want to be valued and respected while doing that work.

A recent article from CNN’s Money blog suggests that Perks aren't the answer to employee retention problems. “Perks like free car washes, dry cleaning pickup and a fully-stocked kitchen can help entice new workers to join a company. But they won't necessarily keep them there.”

The solution to improving employee retention can't be cosmetic. It must be fundamental.

One of my recent clients struggles with finding “quality candidates.” While “quality” is hard to define, it has something to do with work ethic and professionalism demonstrated by applicants. In my client's situation, applicants display what any reasonable person would consider to be poor work ethic and a profound lack of professionalism. It's not uncommon for the recruiter or the hiring managers at my client’s company to experience No Call / No Shows: candidates who don’t show up for the interview or, worse yet, don’t show up for the first day of work. Yikes!

Understandably, the business owner is frustrated. The answer, he is certain, is to increase the starting wage. His rationale is that these people don’t take his job because they can get a better paying job someplace else. While I’m all in favor of paying people a fair and decent wage, and while the current trend of wage stagnation concerns me deeply, I’m opposed to raising wages just to raise wages. If we want to solve these workforce issues, we must address the underlying causes of what ails his specific workforce.

You see, it’s not just a No Call / No Show issue. It’s more than that.

  • Why is there the need to hire new employees? Is the business expanding or are these replacement workers for employees who have quit or been terminated?

  • If it’s the latter (which, in this case, it is), are they quitting or getting fired? (In this case, it’s a mix of both.)

  • If they are quitting, why? If they’re getting fired, why?

It's not rocket science, but this is the type of assessment I do with many of my clients. I find out what is truly going on with the company’s workforce, why are things really happening in the business. I use surveys and interviews to find out what employees and managers think, and I observe interactions between and among employees, customers, managers, etc. I note the difference—and there always is a difference—between what people assume and what is real. Then I recommend solutions to policies and practices to improve how employees experience work.

If they are happy and fulfilled at work, they will be more likely to stick around.

Raising wages to address the No Call / No Show situation solves the wrong problem. Indeed, it solves no problem ... other than raising the employees’ wages. Some might argue that a wage increase is good for employees no matter what. I disagree.

You see, the fundamental problems still exist. The things that cause people to quit or get fired are still present. Employees are still unhappy. They are just making a few dollars more. Let’s solve the foundational problems—whether it’s hiring and on-boarding, training and engaging, leading and managing, measuring and rewarding—and then give a pay raise. Now we're really making an impact!

If your employees do not experience the right work environment and culture, if they aren’t able to accommodate both their home and work responsibilities, it doesn’t matter what you pay them. They won’t stick around.

All employees want to do inspiring work and want to be valued and respected while doing that work. That's a perfect place to start!

Andrea J. Applegate is president of Applegate Talent Strategies, LLC, a firm that advises employers on their people practices to ensure they can attract, retain and engage their best workforce.


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