Raising your employees’ salaries is not always the first thing a director thinks of when considering ways to boost company revenue. Often, it is the complete opposite – making financial cuts where possible.
A company owner taking a pay cut in order to give staff a pay rise is not something you see every day.
But this is exactly what Dan Price, owner of card payments company Gravity Payments in Seattle has done.
When he realised his staff were struggling to pay bills, despite the company being worth millions of dollars, he knew something had to change.
He didn’t think it was fair that he was a millionaire whilst much of his staff was struggling to make ends meet. After some research, he decided that a salary of $70,000 was what his workers needed to live comfortably. This would have been double the current salary of some workers. As well having to take a pay cut to achieve this, Price’s two houses needed to be mortgaged, and his stocks and savings given up.
So, did Price’s gamble pay off?
The results speak for themselves!
The value of the payments the company processes a year has gone from $3.8billion to $10.2billion, and the headcount of the company has doubled.
That’s not to mention the more personal effect the salary increase has had on the employees. There has been a 9% increase in employees being able to buy their own houses, 70% of employees have been able to pay off debt, and the number of employees having babies has risen from 1-2 a year to 40 in 4 and a half years.
For Price, this was the most important part – helping to improve his employees’ quality of life.
Of course, doubling every employee’s salary isn’t a viable option for every company owner, but it definitely something to consider. $70,000 isn’t feasible for most companies, but it’s amazing to see what even a small incentive can do to help boost company productivity and culture.