If you’re like us, your minimum wage has likely been increasing each year for the last several years. If you’re also like us, there isn’t an end in sight. While this can be good for our employees, it can be challenging as an employer. When hiring, why would someone come work at your gym for minimum wage when they can work at a big box store or major retailer for $3-4/hour more?
So is minimum wage enough? The short answer: No.
Minimum wage maybe used to mean you didn’t value someone’s contribution to your business or it was the bottom of the totem pole, basic entry-level position. Just a few years ago, our minimum wage in my state was $7.35/hour. In a month or so, the minimum wage in my state will increase to $11.15/hour. That’s a 51% increase in just the past few years. Have I been able to increase my monthly tuition that much? Absolutely not. So, then how do we budget to pay someone $14-15/hour just to compete with a major retailer.
- You need to be consistently raising your prices. I don’t mean you should tell families in your rec program, “Hey, your new price is $X this year.” In fact, I strongly suggest you don’t do that. Instead, grandfather people in and raise prices for new members only. Make sure you’re also raising pricing on snack bar items, pro shop items, private lessons, birthday parties, events, etc. Now, for all star families, the price to cheer is going to increase if you’re relying on suppliers. There is no doubt about that. So just make sure you’re budgeting for inflation and raises for your staff and account for that in your annual all star packet that lists your fees. (My all star prices fluctuates based on our season, but my tuition has increased over the years as well to account for additional training and wages for our staff. For contracted customers, this is O.K.)
- Goals should be a part of raises. I mentioned last week I wouldn’t pay a new person with experience more than my current coaches who didn’t have experience when they started. I need to SEE and EXPERIENCE new staff in action to ensure it’s about more than just the skills. They have to have our values and character skills to be worth the pay for me. That said, staff who are great have SO MANY opportunities for raises if they’re achieving goals I’ve set for them. What sort of goals can you give to part-timers? Here are a list of 10 goals I’ve set in the past for staff.
- You may need to be creative for awhile. If you’re like me, the minimum wage is growing faster than you can grow your revenue. So, get creative. A while back I chatted with my CPA about some things I had read. That was when we decided to start offering tuition assistance and student loan reimbursement. Why add something else to my plate? The federal laws allow (until 2026) for us to offer these employment incentives so my staff can earn more money. They submit their receipts and are reimbursed to a certain dollar amount based on the length of time they’ve been with us. Why do this? It’s essentially a tax-free raise for my staff. I can pay them a reasonable wage and give them reimbursement that is both tax-free to me – the employer – and to them – the student. Get creative in what you can supplement their pay with until you can afford a raise. Does the staff member have kids? Consider a tuition stipend. Look at fitness gym memberships. The more staffing incentives you can offer, the more you can acquire and retain great staff until you can afford to pay what the major retailers are paying.
- Job satisfaction has to be an incentive, but it can’t be the only one. Is working at a cheer gym more fulfilling and enticing than stocking boxes at a major retailer? Probably! So, remind people what opportunities your staff receive, “Change lives! Work in a positive environment where you can change the course of a child’s life through sports.” People who truly love children will work for minimum wage, but they shouldn’t have to forever. If you can bring them on for a bit at that rate, train them, give them opportunities to take on more, advance and then give them a well-deserved raise, that in itself is an incentive. People will be grateful you’ve not capped their potential with a glass ceiling.
So, while it can be difficult to give raises if your minimum wage is jumping, it’s absolutely necessary. How much should you be giving? Well, I can’t tell you that. Some employers offer a percentage such as 3% per year. Others prefer one large raise per year ($1-2/hour) while others will do a smaller raise but do it more often. (That’s what the millennials preferred, and I have a hunch Gen Z will be the same. More gratitude and constructive feedback requested more often.)
If you’re thinking, “I can’t imagine paying someone $14 per hour. My first job was $5.25/hour,” well, same. In fact, when I was a waitress, I made $2.85/hour. Amazing right? But times have changed, and we need to adapt. Those hourly rates just don’t provide a livable wage anymore, nor do they help us acquire great employees. So, adapt and overcome. Pay what you can until you can make some changes and take better care of your staff. This isn’t something you want to put on the backburner!