Should new employees be hired for the same hourly wage rate as workers who have been employed for years?

Question

Example: Worker is hired in 1998 for $5.50 an hour
each year this worker gets a small raise of .25 cents an hour and in 2007 is making $7.75
Due to difficulty in filling positions and increase in minimum wages, etc, the company must hire new employees at $7.71
Is it fair to do this? There is no way to hire people for less, and
we can't afford to give current employees any more than they are already making? What should we do? How can we make current workers who have been here for years feel good about the situation?

Answer 1

While its not fair, it is life. When dealing in none skill jobs an employer expects a certain amount of turn over to keep labor low. Sadly an employee working for years right around and barely above min wage is going to get a raw deal. They aren't showing a desire to improve themselves by leaving for greener pastors. Now if you feel compelled to compensate senior employees here are few ways I've seen used in past. buy lunch (small and personal), small bonuses ($10-$20), my person favorite take them behind the store and have couple beers with them, give first offer at any OT. these are designed for small business 5-10 employees. also remember it is easier to screw over a boss the a friend ... make them think your friend and while stick around longer then u think

Answer 2

Due to all the cost of living increasing and minimum wage increasing you must start new employees at a higher rate. I do also think that your current employees should also get a cost of living adjustment, maybe something as minimal as a 5% across, except new employees of course. That would raise those $7.75 to $8.14, it's only $.38 cents but it will make employees feel better ... even though it's not even a dollar more than the new ones but being over the $8 mark makes it feel like a whole dollar. That's just my opinion. I'm a goverment worker and just got a 6% increase, which I dont' think it's fair becuase some other clasifications are getting as much as 25% or more... but I'll take it! better than nothing.
Good luck.

Answer 3

Here's the sticking point. Your employer can do what he darned well pleases unless there is a union contract that governs hiring and firing. Or unless he commits an act of age discrimination. What many people don't realize is that you never, EVER make what you think you are worth. You always make what your boss thinks your job is worth. If you want more money, you have a couple of choices. 1. Find another job that provides more money or better benefits or both. 2. Tell the boss you are doing at least the same work as the people getting more money and feel that it is unfair treatment. If the boss turns you down, see suggestion 1. 3. Take a night class or get a certification in something job-related. Provide that information to the boss. If the boss doesn't care and doesn't respond, see suggestion 1. 4. Go postal. Do the world a favor and take down such an idiot boss before he inflicts himself on others. But if you aren't that violent, then see suggestion 1.

Answer 4

Here's an answer from a guy with a Masters Degree in Business Administration.

The first step is you need to determine the skill levels needed by the workers. If the skill level is low meaning that you are paying minimum wages then the answer is easy. Pay minimum wage and don't worry too much about the legacy employees. You are paying what the market will bear for people of that skill level.

If you, as the employer, need to have higher skilled employees and can't pay higher wages then you are the one out of luck and need to revise your business plan (i.e. raising prices to cover the labor, reducing costs elsewhere, etc.).

This is a free market system. We pay for percieved value. Not real value. What and how much value is in the legacy employees is clearly up to managment to decide. But, my guess is if you are only able to pay minimum wage then the skill level is low as there are glutiny of workers in this range. If the legacy employees want more money they'll leave and you can hire from a large pool of available work force.

Easy!

Answer 5

Perhaps , if you can't afford to pay an adult worker with 10 years on the job , more than $7.75 ,
You need to rethink your business plan .
Prices have increased a lot in 10 years , and if your prices to the customers can only support a $7.75 wage , there are problems .
Less than $10 / hr is a childs or transient wage .
If I worked since 1998 , I would expect around $20 / hr or I would be job shopping .

Put some serious thought into increasing your revenue if you want to keep your exisiting employees .
I cannot begin to fathom working 10 yrs for that pay .
( unless you are Not talking work in the US )

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Answer 6

I would say in fairness the old employees should make what the new people make plus cost of living for how many years they have been there. This .25 raise crap is for the birds. Hand out an honest raise for an honest employee. they are hard to find and should be appreciated. The boss don't need to get rich in a day like they think.

Answer 7

there is no way, and its not fair. i cant believe these companys that do this. if your having money troubles, the employees are not the problem, but they are the ones who pay for it in the long run. why doesnt management take a pay cut? 50 cents an hour is only 20 bucks a week. why are you needing more employees? business cant be that bad. actually, for 2007, $7.75 is pretty sorry.

Answer 8

Happens all the time! HR conducts wage salary surveys every couple of years to ensure wages are competitive in their respective markets. However, employees that have tenure should be increased to reflect a higher wage than new hires based on the increase percentage of the new hire rate.

Answer 9

No. The employee's that have been there longer should be paid more by some way or another. If you can't do a higher hourly rate then give them a bonus. If you don't then office moral will go down and not as many people will be as loyal.

Answer 10

Tough situation indeed. Try non cash perks, or end of year perks based on performance and tenture. Sometimes small acknowledgements of work well done for tenured employees can go a long way. Extra time off for them, a party for all 5 year employees, anything that makes them feel a little special. G/L,it sounds like a hard situation.