Publisher's Desk|Canadian HR Law|HR Policies & Practices|Employment Law|The Corner Office|HR Guest Blog

The benefits of a $40,000 cashier

Think you can't afford to pay workers more than minimum wage? You might earn a 'QuikTrip' to bankruptcy or find a union sniffing around

By Todd Humber

Can you be an employer of choice and pay workers minimum wage?

Or, phrased another — albeit harsher — way: Can an organization be successful if it essentially treats its most important assets like replaceable pawns?

Minimum wage rates vary across the country, from $9.75 per hour in Alberta to $11 in Nunavut. That means full-time minimum wage earners in Canada are pulling in anywhere from $20,280 to $22,880 per year.

If you listen to business groups, such as the Canadian Federation of Independent Business (CFIB), you’ll hear — quite clearly — that many employers can’t afford to pay a nickel more.

The economic realities of many small businesses, particularly those in the retail and hospitality sector, is razor-thin margins that simply won’t allow more money to flow into payroll, or so the argument goes.

That may be a reality in some cases. (And there are certainly plenty of hugely successful companies that don’t open the wallet for workers. Walmart is often the poster child, rightly or wrongly, for that low-expense labour model.)

But, perhaps it is a chicken-and-egg type scenario: Do the margins not allow higher pay because turnover is so high and quality of staff and service is so poor? Would better, more productive and loyal employees translate to more revenue?

There are enough real-world examples out there to say, with only minor hesitation, yes. In past columns, I’ve discussed the experience of Circuit City, which tried to save costs by jettisoning “expensive” employees and replacing them with low-wage earners. It went into a death spiral, eventually going bankrupt.

Warehouse superstore Costco is another company that has been lauded for its decision to pay above-market rates, as is Trader Joe’s, a specialty grocery store. The accolades come not because the world is full of altruists who want employees to earn more, but rather because it’s boosting revenue and the bottom line.

The most recent example is QuikTrip, a Tulsa, Okla.-based convenience store and gas station chain. Think convenience store/gas station worker, and you’ll likely assume the pay for QuikTrip staff is in the minimum wage range — with no benefits, of course.

You’d be wrong.

A recent article in The Atlantic outlines that while the average cashier in the United States makes US$20,230 — right in line with a Canadian worker earning minimum wage — QuikTrip offers entry-level employees an annual salary of US$40,000 plus benefits, or about US$19.23 an hour assuming a 40-hour week.

“These high wages didn’t stop QuikTrip from prospering in a hostile economic climate,” The Atlantic article states. “While other low-cost retailers spent the recession laying off staff and shuttering stores, QuikTrip expanded to its current 645 locations across 11 states.”

The investment in employees goes beyond payroll. Every new hire undergoes two weeks of training, and the company’s philosophy is to promote from within. That’s huge, as workers can see their hard work and dedication will pay off and could lead to a long career.

Compare that mindset with the one of the person who takes the job — currently posted on Service Canada’s Job Bank — at the Petro Canada in Moncton, N.B., earning $10.25 per hour. Or the one at a Toronto gas bar earning $10.35 an hour.

How about the cashier who is hired at $10.35 per hour at the Shell station in Kindersley, Sask.? Do you think he will see this as a career or just a job?

Whether you’re a mom-and-pop operation or a multinational, you can’t afford to have employees who view the gig as temporary, struggling to make ends meet until something better comes along — because they’ll always be looking for that something better.

That is the mindset of workers earning minimum wage. It’s far better to harness that energy, turn it into something positive and keep it in your organization.

Unions are also setting their sights on minimum-wage workers. While some unions, such as the United Food and Commercial Workers (UFCW), have been playing in this field for years, the yet-to-be-named megaunion formed by the merger of the Canadian Auto Workers (CAW) union and the Communications, Energy and Paperworkers (CEP) union has a goal of targeting vulnerable workers for membership.

In his Labour Day message last year, CAW president Ken Lewenza said he is “most concerned” about employees who feel like they’re stuck in dead-end jobs and the concern is being backed up by a $50 million organizing fund.

Pointing to a Bank of Montreal poll of 1,000 people that found about one-in-five workers feel this way, he said: “If these numbers are representative of the Canadian population overall, then that means millions are stuck in jobs they don’t want, earning less than what they need, without the prospect of anything better on the horizon.”

Is that the type of person you want on your payroll? Because, if you’re paying minimum wage, that’s probably who you have.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resource management. He can be reached at todd.humber@thomsonreuters.com or visit www.hrreporter.com for more information.

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Todd Humber

Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber
CLICK TO COMMENT ON THIS BLOG POST
(Required)
(Required, will not be published)
(Required)
All comments are moderated and usually appear within 24 hours of posting. Email address will not be published.
3 Comments