Collector - January 2018 - 33
Learn More: Nonmonetary Incentives
Check out the article "A Rising Tide Lifts all Boats" in the August
2017 issue of Collector magazine for more tips on boosting
employee engagement: http://bit.ly/2luzq68
Find out how one ACA International member company
designed its flexible schedule for employees in our
October 2016 article: http://bit.ly/2z3z4Zs
reviews its wage offerings annually to keep
up with state and industry trends.
Valley Credit Service, a small agency
in Oregon with fewer than 30 employees,
sometimes hires collectors from temp
agencies, starting them at minimum wage.
But once those new collectors complete
their introductory training period they
become full-time employees and their pay
is raised above minimum wage, depending
on their job duties.
Ray-Graham said that her state's rising
minimum wage, which currently stands
at $10.25 and will increase 50-75 cents
annually until 2022, hasn't yet caused
a hardship for most Oregon Collectors
Association members-likely thanks to the
sizable commission collectors can earn, she
speculated-though it is an issue they have
their lobbyist watch.
"However I can see it becoming a
concern just because of who we do business
with-our vendors, for one, and the
consumers we work with and their ability
to pay," she said. "Sometimes when people
get their pay raised [due to a minimum
wage increase], it puts them in a higher tax
bracket and makes them earn less money.
That's a devastating ripple I don't like."
Jim Hoblick, president/CEO of Regional
Collection Services Inc., said he believes
the rising minimum wage is having a
negative affect on his business. In his state,
Ohio, the minimum wage increased 15
cents Jan. 1 to $8.30.
"The higher minimum wage increases our
target hiring rate to get good employees as
we compete with other employers. As the
minimum wage increases, we're now starting
to compete with non-career, less long-term
jobs such as seasonal jobs or fast food. This
in turn increases operating costs," he said,
adding that he thinks this also complicates
the hiring process.
"To give you an example: for the last
open position we posted, I think I had 130
individual resumes sent to me through the
site we used, Indeed, and I sifted through
those and contacted 30 people in the first
round," Hoblick said. "Only about 15
people returned our call. And of those, we
might set up 10 interviews and only six
will actually show up."
OK, TIMES ARE TOUGH.
WHAT'S THE SOLUTION?
When payroll costs put a squeeze on
your margins, there are a few ways you
can respond. The first is to find a way to
boost worker productivity. The question
you have to answer is: What motivates
Money is an obvious incentive to
produce, though when times are tight
this can be difficult to achieve. Limiting
overtime can help keep your excess payroll
A recent Willis Towers Watson survey
found that companies are expected to give
employees an average pay raise of 3 percent
in 2018, with a larger focus on incentives and
bonuses to reward top performers.
"Employers are rethinking how to
administer limited salary budgets," said
Sandra McLellan, rewards practice leader,
North America at Willis Towers Watson.
"Some organizations are moving away
from differentiating increases based on an
employee's previous year's performance
altogether while others are focusing on
rewarding employees for skills development."
Salary is important, and in order to attract
employees your wages must be competitive
in your local marketplace-even if your
employees work on commission. But after a
point, some employers view an annual salary
as a short-term incentive. How much does
money really motivate employees?
In a 2013 field study, Harvard researchers
Duncan Gilchrist, Michael Luca and Deepak
Malhotra hired groups of people for a data
entry task, paying some $3 an hour and
others $4 an hour. While the higher paid
group didn't perform significantly better
than the lower paid group, the group that
was initially hired at $3 an hour and then
given a surprise bonus (a dollar more an
hour) when they showed up to work actually
tried harder and were more productive.
Researchers concluded: "An employer
has the ability to set an employee's reference
point, and giving a surprise gift can be more
impactful than simply paying higher wages."
Joe Erickson, director of human resources
for IC System, said he believes companies