How Minimum Wage Increases Will Impact your Business
The minimum wage continues to rise year over year. In Florida, minimum wage was increased from $8.65 to $10 on September 30, 2021, and is projected to increase steadily until it reaches $15 on September 30, 2026. Many businesses are concerned with how this will impact them and the overall economy. While there are some cons to the increases, there are also a lot of positive outcomes to consider.
How Minimum Wage Increases Will Impact your Business:
The minimum wage increases mean more money circulating in the economy. With more money in the economy comes more spending on goods and services and more economic stimulation.
Due to the stimulation in the economy and the increased demand for goods and services, there is also an increase in the number of jobs to provide those goods and services.
Studies show that workplace productivity increases when people are paid fair wages. Additional studies have also supported that increased wages lead to better mental and physical wellbeing. Therefore, the increase in minimum wage will lead to an increase in workplace productivity.
Employees stay longer when they are paid fairly. The increase in minimum wage not only impacts employee productivity but also employee turnover rates.
Lastly, the increase in minimum wages will help your employees and their families succeed in the long run. Families that may not have been able to afford an extra pair of shoes or, more importantly, the proper education resources for their children are now able to.
It’s critical to take a look at the entire picture of finances, not just the minimum wage increase when it comes to your business. A few questions that you should consider are - How many people will be impacted? What will the exact impact look like in a dollar figure?
A few action steps that your business can take to prepare for the increases are through overall strategy changes such as:
Restructuring positions: If there are positions that are close to the minimum wage number, then your business may want to consider adjusting pay and restructuring the position.
Redistributing work: Looking at the overall picture, it is important to consider redistributing work if someone leaves so you don’t take a huge hit in the wages.
Minimizing overtime: Ask yourself the following questions - How many people work overtime? Do you have a time and a half issue? Can you minimize the impact by reducing overtime? For example, if you have 20 hours of overtime, it may be time to consider adding a part-time person to take on that work.
Watch our Minimum Wage Coffee Break here to learn more about the benefits of the recent minimum wage increase and the ones to come in the future. Have additional questions? Reach out to our team of HR experts here.