7 grave consequences of underpaying employees

And what can happen in your business when you don't

7 grave consequences of underpaying employees

The temptation to negotiate the lowest wage possible could end up with consequences that affect your business detrimentally.

A story written by HRD’s Coann Labitoria discusses seven negative affects that could happen to your business if you’re less liberal with your salary offerings.

Read the full article here: 7 grave consequences of underpaying employees

At the very minimum, employers should understand what constitutes fair pay or market rates for each role within their team and be compliant in payroll so accidental underpayment doesn’t occur as this opens an organisation up to legal action.  

1. High employee turnover

Salary plays a huge role in keeping employees motivated loyal. A poor salary offer could mean your employees will always be on the lookout for a new role with better pay and benefits.

2. Poor company culture

High turnover rates caused by paying low salaries will lead to not enough interaction between employees which leads to poor company culture and low employee morale.

3. Poor brand reputation

When an organisation doesn’t pay well the news spreads like wildfire. This can affect both your consumer and employer brand. Job seekers will go elsewhere, and customers will lose faith in the company.

4. Low morale

Lack of company culture ultimately leads to employees with low morale and motivation to do their work and ultimately disengagement from the organisation.

5. Poor performance

When employees start to feel demotivated, their performance declines and productivity is affected.

6. Low loyalty

Under payment makes a person feel undervalued. In this instance employees are likely to have a poor opinion of the organisation and will look for work elsewhere.

7. Missed opportunities to hire quality talent

Companies not willing to pay adequate salaries will miss out on hiring top talent. Even if the role on offer is exactly what a candidate is looking for, if the salary doesn’t meet their minimum requirements, they will go elsewhere.

Read the full article here: 7 grave consequences of underpaying employees

Read more: Employer fined for underpaying 93 weeks wages

Read more: Payroll firm fined over underpayments

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