Putting a price on your corporate reputationMay 2015
A good reputation is more valuable than money, they say. Yet you wouldn’t think so these days with so many businesses still loathe to pay the Living Wage and happily keeping staff on zero hour contracts. So when I heard about Dan Price of Gravity Payments cutting his own salary to raise his company’s minimum wage, my usual frown turned upside down.
The US technology start-up boss is slashing his own $1m (£664,000, €923,000) salary by 90% to raise his company’s minimum annual wage to $70,000. Unsurprisingly he has since been swamped with applications for two advertised jobs. The two vacancies, for a sales rep and a support worker, attracted more than 3,500 applications in response to the new rate, instead of the usual 300 or 400. Talk about putting a new spin on the minimum wage!
Price founded Gravity Payments, in Seattle, Washington, 11 years ago when he was 19. He recalls: “When I first started the business, all I could afford to pay that person who decided to work with me was $24,000 a year, and no healthcare or anything. Ever since then I’ve been working on getting better pay. It’s always been on my mind but it was a question of whether the company could afford it. I felt like we finally got to a place where we could pull it off.”
He says making the move “was the best money I’ve ever spent in my life” and hopes his example will encourage other employers to do the same, reducing the widening pay gap between directors and workers.
Before the pay announcement Gravity Payments had 15,000 clients and handled about $10bn in payments every year. Since Price’s decision the work has expanded – so even more of the 3,500 applicants could receive job offers.
While I wonder if Price’s action will encourage other employers to do the same, wise businesses should also take heed of recent research on the Living Wage commissioned by KPMG. It found that attitudes and awareness towards the Living Wage campaign are changing with seven out of 10 UK adults saying they would consciously shop in favour of a Living Wage accredited retail chain – a rise of more than 10% in less than 12 months.
“It’s clear from the poll that ensuring the lowest paid in society are treated fairly should be near the top of the agenda for Government and for employers alike,” commented Mike Kelly, head of Living Wage at KPMG UK. “With nearly a quarter of the FTSE 100 now accredited more and more employers are reaping the benefit of joining this movement. The next big challenge will be to educate our employees, customers, suppliers and clients about the range of enterprises who are Accredited so that they too can exercise informed choice.”
Talking of businesses having the courage to make fundamental changes, keep an eye out this month for Margaret Heffernan’s new book, Beyond Measure. While not promising a prescriptive do’s and don’ts list, its pre-publicity says that it will reveal how organizations can ‘make huge changes with surprisingly small steps’. Her last book Wilful Blindness was an absolute wow and I have a feeling that this new one will not disappoint. Even the promotional flyer, inspires: “A half hour walk can prove wildly more productive…than staying late at work.” I can’t wait to get my hands on a copy.
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