6 reasons why you should pay your staff as much as possible

Surplus profits are often cited as a key performance indicator, and as every great leader knows, great employees continue to gear that linear upwards.  
However, this comes at a cost. If a business is always looking to maximise profits, they’ll be scrimping elsewhere; most likely on their manpower’s wages.
1. Attraction and retention
Smart, intelligent and driven individuals know their worth, and that’s part of what makes them exceptional.
Despite this, the latest Labour Market Outlook survey from the CIPD and The Adecco Group also found that almost one in five organisations expect a pay freeze when it comes to making decisions about wages – so it may be the case that organisations simply cannot increase wages.
However, according to High Pay Centre calculations, the average pay ratio between FTSE 100 CEOs and the average total pay of their employees was 129:1. These CEOs earn around fifty times the annual average of a Human Resources Director.
It may be time for a review…
2. Employees aren't productive if they're searching for better jobs
A recent study from the University of Warwick found that happiness led to a 12% spike in productivity, while unhappy workers proved 10% less productive.
Professor Andrew Oswald, one of three researchers who led the study, said companies that invest in employee support and satisfaction succeed in generating happier workers.
There’s only so much support an employer can give – and if it's not paying the bills, then save the wellbeing spiel.
3. Prove you value people over profits
If people feel comfortable with their pay, then a huge burden is removed from them and their employer. Jon Muranko, President and CEO of Muranko Marketing, explains: "People are motivated by money only up to a certain point. After that, more intangible things like feeling valued, appreciated, and recognised take over."
In fact, a study by Reward Gateway, found that almost half (49%) of British workers would leave a company if they weren’t regularly thanked and recognised for their efforts.
Whilst remuneration is important, ensuring this is wedded with thoughtful management will keep great employees in the business.
4. Low wages hurt your brand
Businesses attract consumers when they treat their people well – but if they don’t, it can impact customer experience.
In a recent interview with Theo Paphitis, Chairman of Ryman, he told us that businesses that fail to take care of their employees on the frontline will suffer: “After all, they’re the ones representing us to the customer, not head office,” he said.
5. Higher the compensation - higher the expectations
“If you pay employees generously then you can expect more from them and hold them to a higher standard,” writes Emanuele. “You can't excite top performers with low expectations.”
6. Pay your employees well or your competition will instead
Recently, HR Grapevine reported on Megan Driscoll, CEO of PharmaLogics Recruiting, who decided to increase the pay of all her staff: from entry-level to management.
She increased the base salary of her recruiters from $37,000 (£29,900) to $50,000 (£40,000) – with on-top commissions inflating pay-packets to $70,000 a year.
The Boston-based firm has already experienced several positive effects, including: falling employee turnover and rising revenues – with an expected $15million (£12.1million) revenue this year, up from $6.7million (£5.4million).
It's really quite a simple strategy, concludes Emanuele: “Hire great people, pay them well, and keep them.”