Higher Wages & Plush Benefits: Why They Can’t Co-Exist
October 10, 2018
Leave it to Amazon to open up Pandora’s box in the HR world. Their recent announcement on increased minimum wages for its employees sparked debate, copycat behavior, and even virulent backlash.
What’s the complication with increased minimum wages? No intention to bore you with a full-on econ tutorial but higher wages, the rate of wage growth, and plush workplace benefits are not meant to cooperate peacefully in a capitalist society.
As workplaces have skewed to offering more benefits in the past decade to lure top candidates and increase dismal retention rates, employers manning the checkbooks realized something has to go. Since no one purposefully wants to stagnate wages, executives are pondering a difficult question. Freeze wages and add benefits? Or increase wages and eliminate some benefits?
Which brings us back to Amazon. When you add in the cutthroat competition between big-name retailers, the stakes are extraordinarily high (R.I.P. Sears). Let’s take a look at some of the nation’s biggest employers to see how they’re currently approaching benefits, wages, and the conundrum of choosing.
This week’s thoughts:
- Amazon hikes up wages. Employees jeer at lost stock options and bonuses: The jubilant environment following Amazon’s minimum wage increase quickly subsided after some employees became furious over their reduced benefits. Lucrative bonuses will now be less favorable under the new compensation package.
- Starbucks adds new benefits. Controversy ensues: After a harrowing 12 months of PR disasters, the java experts are honing in on the family. However, as they improve their parental leave, child care, and health leave policies, critics scoff at their neglected promises to hiring refugees and eliminating bias.
- Wage increases and benefits are not friends: Economists have been scratching their heads about the gradual creep in wages in the U.S. In a succinct and insightful piece, the NY Times explains why.
- Walgreens angers employees with a new benefits plan: Walgreens provoked the ire of its employees by proposing changes to its benefits, including cutting insurance for retirees and increasing the obstacles for part-time workers to gain PTO.
HR Breakfast: Uncubed’s HR breakfast series brings together our community with breakfast, conversation, and networking. The highlights of our digital marketing breakfast in June can be seen on this video.
If you’re a HR professional who likes to listen, talk, and eat breakfast, we hope to see you at our next one! It’s October 16th at Saxon + Parole in Noho. Alongside leaders of Talent Acquisition from Stash Invest, Peloton, Splice, and Kustomer, we’ll be discussing how to win over your ideal candidates and new hires. RSVP today for our breakfast. Only a few spots left!
Have a wonderful afternoon,
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