Consider Employee Raises To Boost Productivity And Limit Turnover
In addition to starting up a company or expanding an existing one, small business loans can be useful for any number of industry applications, including providing employees with a raise. It might seem a bit foolish to take out a loan merely to furnish employees with a pay hike, but research has shown that the prime stressors on individuals are generally money and work related. In fact, money has consistently topped Americans’ list of stressors, according to the American Psychological Association, with 72 percent of adults feeling stressed about money at least some of the time.
Stress in the office
With monetary factors causing so much stress in peoples’ lives, it can lead to distractions, frayed nerves, a lack of sleep and even health problems such as heart disease and depression. All of these symptoms of stress will eventually lead to lower productivity at work. Small Business Trends reported stress caused the productivity levels of 33 percent of workers to dip by 10 percent, while 20 percent of workers reported losing up to 25 percent of their productivity. In addition, detrimental stress levels forced 60 percent of workers to begin looking for a new job or quit their current jobs. High turnover rates are never good for a company’s long-term interests, since it involves allocating resources for more training and catch-up time. This means anything keeping employees around for longer periods of time will ideally pay off.
Unfortunately, despite the high level of workplace stress and its subsequent negative repercussions among companies’ productivity levels, salaries for those working at small businesses have remained mostly stagnant for the past quarter century, Small Business Trends reported. Meanwhile productivity has grown by approximately 60 percent in the same time period. However, instead of using the gains from increased productivity to raise wages, business owners instead used the increased productivity to cover benefit and compensation packages instead of raising wages.
Merely offering the opportunity for year-end bonuses or performance-based incentives does not produce the same levels of productivity as providing employees with a higher annual salary from the onset of their employment. Financial stability means employees not only feel more satisfaction and security in their positions, but they also feel more engaged and enthusiastic, which leads to more involvement and commitment on their part, and eventually higher profits on the business’ side.
There’s a simple way to alleviate one of the major stressors weighing down employees: a pay raise. A 2014 survey conducted by the American Sustainable Business Council found that 61 percent of small-business owners with employees support gradually increasing the federal minimum wage from $7.25 to $10.10, and then adjusting it annually to keep pace with the cost of living. The same survey also found 53 percent of small business owners agree that companies would benefit from a higher minimum wage since it would mean lower employee turnaround, increased productivity and higher customer satisfaction. Turnaround rates and productivity levels are directly proportional to stress levels at work, which is affected by pay rates.
Although money might be tight around the company, offering employees more financial freedom in their respective positions means workers have less reason to stress about financial matters and more reason to focus on completing their work with greater efficiency. With greater efficiency and higher productivity levels, businesses will not only see employees with more satisfaction in their work, but also happier customers and clients – and these are the people who will increase your profits.
Using alternative business financing, companies can get the money they need in a quick and easy fashion to ensure their employees are working to their full potential.