Pay Your Staff Peanuts? All You Get Are Monkeys

Nothing says “I really appreciate what you do here” like paying the lowest wage possible does.

I have worked in 3 different countries and 2 continents with well over a thousand plumbers in my 16-year career, and I’ve seen both sides of the coin when it comes to paying staff well versus poorly. From the lowest-paid job I ever held — working as a maintenance plumber at BBC Television Centre in London on £6 p/h (≈$7 USD p/h) — to EBA (unionised) construction sites in Australia for over $50 AUD p/h plus benefits.

Here is why I believe paying your plumbers well is good business.

Attracting and retaining talent

It’s no surprise that 61% of people in a 2015 survey say they chose to take on new positions based on how much they would be paid. So if you’re an employer who thinks it’s good business to pay staff low wages, you only have access to 39% of the talent pool — probably the bottom 39%.

You then have to convince those plumbers to stay. It shouldn’t come as a surprise if staff leave for a higher-paying job within a short period.

Higher-paid staff is good for business

Dr. Noelle Nelson states in her book Make More Money by Making Your Employees Happy that “companies that effectively appreciate employee value enjoy a return on equity and assets more than triple that experienced by firms that don’t.”

When looking at Fortune’s ‘100 Best Companies to Work for’, stocks rose an average of 14% per year from 1998 to 2005, compared to an average of 6% for the rest of the marketplace.

A study released by Bright Horizons found that 89% of staff with high levels of well-being reported high job satisfaction. Nearly two-thirds of those employees reported consistently putting in extra effort at work. Happy employees are more productive employees, which positively affects the bottom line.

When you underpay someone, you’re telling them they’re less than average

If good plumbers know they can be appreciated and paid top dollar at a reputable business, why would they stay working for peanuts at a firm where they feel underutilised and underappreciated?

This I know first-hand. I mentioned I was paid about $8/hr working at the BBC. You would think working at such a prestigious organisation would be great — it wasn’t. I lasted 2 weeks; I literally quit the day I got my first paycheck. Two days after leaving, I landed a gig building plant rooms on £23 p/h ($28 USD) where I remained until the end of the project.

The formula is quite simple

If your goal is to attract and retain good plumbers:

1. Recruit the best plumbers you can
2. Make sure they have purpose and are empowered (not micromanaged or mistrusted)
3. Make sure they are valued and appreciated, and that they know it
4. Pay them well

If you can’t afford to pay your plumbers well

Then you have one of two problems:

1. You are being needlessly frugal.
2. Your business is failing and the only way you can remain solvent is by cutting wages.

While there are many other contributing factors to employment satisfaction, remuneration deserves its own conversation. The companies that get this right consistently deliver better service to their customers.