Over the past year, a lot has been said about wages. We have seen demonstrations at major retail chains, and we have seen companies such as McDonald’s, T.J. Maxx, Wal-Mart and Target lift front-line wages. Most leaders in our industry have this topic on their minds, but not many have actually made a significant change.
As you may have heard, we at Ricker’s made an adjustment in our wage structure this summer. We moved everyone in our company who had been with us less than a year to a minimum of $9 an hour. Those who have worked for us more than a year automatically moved to a minimum of $10 an hour.
This was not a move we were forced to make. We have never had a problem finding people to work in our stores. This raise affected more than 500 people; that means more than 70% of our roughly 700 team members were given a raise. This raise did not include our managers, and yet they were some of the most enthusiastic people regarding the plan.
This move sparked a lot of interest from our friends in the industry. (Click here to read more about the minimum-wage battle.)
A Clear Focus
So why did we increase wages? Here are three fundamental reasons:
- At Ricker’s we are a family, and we take care of our people first.
- We want to be a premium retail employer in our marketplace.
- It’s the right thing to do.
One of my mentors said something very powerful to me when I first began learning from him. He said, “A CEO’s job is two things: culture and strategy, in that order."
Too often I see companies in our industry with an unbalanced focus on the customer. I love our customers, but I love our people a lot more. I am always thinking about how we are going to make a better life for them. I know if I build a culture in which our people are engaged and positive, and our people are No. 1, the customer will always get taken care of.
There are a lot of family-owned businesses in our industry. I see too many of those companies focus on what the business can do for the owners. Said another way, the purpose of the business is to serve the family. If you’re in that boat, you should think about getting out right now.
Multiples are as high as they have ever been. Don’t get me wrong—I like to live the good life. But what is more important to me is making sure we are doing everything right so that we can have as many team members as possible living the good life, too.
At Ricker’s, the business does not serve the family. The family serves the business and ultimately our people. Executed well, this will lead to our family being taken care of just fi ne in the long run.
First Things First
Raising wages is one of the easiest things we can do. It takes no eff ort, just money. The hard part is using our wage adjustment as a platform to continue to lead our culture in the right direction. It’s putting the right human resources processes and long-term bonus compensation in place. It’s having lunches where owners and executives hear what is going on at the front lines and make the necessary changes. It’s receiving constant feedback so you can hold people accountable as well as motivate them.
Our main focus at Ricker’s is on providing a great work environment for our team. So I challenge the owners, management teams and managers in our industry: Take care of your people. Focus on the difficult tasks regarding your team that will make your company, your district or your store a great place to work.
Put your people and your culture first. This may cost short-term dollars. In the long run, I am confident all the time and dollar investment will result in a more resilient, profitable company for our family and all of our people.