Benefits and Compensation, HR Management & Compliance

How Can You Prepare for Future Minimum Wage Hikes?

Sixteen states and at least 10 large cities have increased their minimum wages substantially in 2020, with a majority of them going into effect on January 1. The minimum wage increases are happening in many markets already at or near historic lows in unemployment, which could have a significant impact on employers looking to recruit new talent. And with rising quit rates, it may exacerbate problems many companies are already experiencing retaining that talent.


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As minimum wage rates continue to increase annually across many states and municipalities, employers and HR professionals must ask themselves these questions: What are some of the most significant impacts of these changes, and what strategies should companies implement in response?

Employee Engagement Is Key

Aerotek Account Manager Alex Rodriguez works in Arkansas, where the minimum wage increased to $10/hour on January 1. He thinks that organizations that prioritize employee engagement will continue to attract motivated employees and succeed even when competition heats up further for jobs paying minimum wage or just above.

“Forward-thinking companies are invested in making sure their workers feel appreciated and valued,” he says. “They know the key to retention is creating an environment that makes employees want to stay in their jobs, work hard and contribute to the company mission.”

5 Strategies to Adapt

This change represents an opportunity for employers to take a hard look at their hiring processes to ensure they’re equipped to compete, adds Aerotek Account Executive Hollis Howell. The tight labor market is already driving a candidate-focused approach to hiring, she notes, but the minimum wage hikes could be the tipping point that compels employers to upgrade their processes and priorities. Howell offers some specific recommendations:

  1. Ensure market wages for your skill sets. “In order to recruit the best workers, employers need to have a deep understanding of the factors impacting compensation; local market conditions and the wages paid by employers competing for the same talent as well as economic indicators and industry trends. The more you know, the better prepared you are to make a competitive offer,” says Howell.
  2. Refresh job requirements. “I can’t emphasize enough how important it is to have a list of job requirements that is updated and accurate in order to find the right person for the job. It’s worth it to take a few minutes prior to the candidate search to refresh the job description rather than hiring someone who’s not a good fit for the duties required,” she adds. “Make sure your candidate search is built on a solid foundation and sets your new employee up for success.”
  3. Improve your employee value proposition (EVP). “Does your company have an EVP? And if so, does it accurately and compellingly represent your organization?,” asks Howell.

“Make sure you’re communicating what your company stands for, what the company mission is, and what value it brings to its employees and prospective employees,” she adds. “At the end of the day, it’s about making your company more competitive and sustainable.” 

  1. Audit your interview process. “Right now, most if not all of your job candidates are already employed. That makes it crucial to streamline your interview structure to be respectful of an interviewee’s time. Don’t stretch out the process beyond what’s necessary,” she says. “Another reality of this job market is that a candidate will likely have more than one opportunity in play and any delays increase the odds that your candidate will accept another offer rather than wait for you.”
  2. Streamline new hire onboarding. “Although you may think the hiring process ends when an employee starts work, paying close attention to your new hires during onboarding allows you to answer questions and provide information before any issues arise,” says Howell.

“Remember that your new employee is encountering an unfamiliar environment—this is the time for you to explain company protocols and set appropriate expectations,” Howell adds.

These strategies will yield results no matter what is happening in your local market, Howell concludes. “It’s a good checklist for your hiring process in general,” she says.

Hollis HowellHollis Howell is an on-premise executive for Aerotek. She is responsible for overseeing a portfolio of large account engagements focusing on client service and performance management for all recruiting teams.

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