This is Beancaster.com on June 01, 2021, and I am Andre Choquette.
Waking up this morning, some are going to happier while some are wondering if this is the right time, especially with COIVD still hovering above our heads with that slim possibility of a fourth wave that has shown its ugly head in Japan, Australia and India.
I am talking about the minimum wage for British Columbia. It has climbed up to $15.20, a 7% increase. And this now includes liquor servers as well, moving up to the $15.20 per hour (9% increase).
Now, if you are an employee who relies on minimum wage to get that guaranteed wage increase – you have so deserved it. But, unfortunately, 70% of women make up the minimum wage population which in my mind is crazy. Folks, we are not living in the 1950s when men made up the overwhelming workforce. It is 2021, folks!
But getting back to the minimum wage increase in BC. If you operate a business that relies on minimum wages, you may wonder if this is the right time to bring in a minimum wage increase considering the COVID situation. But stop for a second and think about your employees. Minimum wage employee has the worst job security in any pay range. Instead of thinking of your employees as costs – instead, look at them as investments. They are walking talking ambassadors of your business. If they are happy, they will make your customers happy and tell their friends, family, and whoever will listen to how awesome you are as an employer. Statistics show that the higher the rate of pay in industry results in the higher per customer purchases. But this will not happen overnight.
We suggest you bring all of your staff together. Be sure to have the total increase in wages that this will cost you (lol, we know a great accountant to get this together for you). Be upfront with your employees and tell them how much this will cost you and your business. Tell them that you need their help with some out-of-the-box thinking for ways to increase business. Not only will you and them not have to worry about layoffs with future minimum wage increases but allow your business to introduce an incentive program for your employees. That's right, in the end, not only will you be paying minimum wages with a smile but also provide an incentive program that your employees can benefit from based on business triggers.
Now thinking an incentive program involves a sharp pencil and some innovative thinking – again, that incredible accountant is there for you. But again, back to the statistics, businesses with an incentive program average a steady 15% year of year gross profit (which is after incentive payouts).
Think about it. Right now, you may be making all of the business decisions, or if you are smart, you are bouncing the business ideas of your accountant. But when you open up the brainstorming to your employee pool, you have that much more talented brain giving those fantastic ideas.
Here is an incentive program that we came up with for a small bar. While they had good liquor sales with drinking and driving and over-serving laws, they had reached a plateau. They had a kitchen that stopped serving food at 9 pm. They opened up ideas to staff who came back with customers thinking menu items and named the menu item with a second idea to try food services until 11 pm.
We put together an incentive program that opened up a new menu item (from and named by a customer) each week. Also, the extending the kitchen until 11 pm with 10-11 being nighttime munchies time where a 4% discount on food items. As sales for these items are statistically higher due to limited time and the customer idea concept, the pricing of the customer named menu item was priced about 10% higher. And with every customer named item, servers get 5% commission while the other 5% is shared with the back of house staff. After running this program for three months, the bar saw a 22% increase in overall food sales, with the kitchen staying open until midnight weekdays and 1 am on weekends. Liquor sales also saw a rise of 15% overall.
So instead of you thinking that a 7% wage increase will bankrupt your business, get your very talented staff to come forward with some ideas – and open your mind – understand that you need your employees more than they need the employment. Not an employer-employee relationship but instead a partnership.
Just a thought or two from Beancaster.com. See more of our thoughts, idea's and yep other useful stuff at Beancaster.com. And Shhh!, if you subscribe you get everything a little quicker not to mention some special only subscriber content and discounts.
I am Andre Choquette, have a wonderful profitable day!