When to Pay More: Solve Attrition First, Then Invest in Skills for ROI

0:00I'm thinking of paying my employees well above average, but to do that, I'd have to take a pay cut myself. My thinking is that by paying more, I get more loyalty, higher satisfaction, and most importantly, they deliver high quality work that keeps my customers happy. Am I being smart, or am I being naive? >> First off, thank you for the heart behind the question. I mean, the people who win long-term are the people who treat their teams well. Thing one. Thing two. What problem are we solving? You can't buy loyalty. You can't buy higher satisfaction. If you have an attrition issue, meaning your employing or number two, you have an attraction issue, those are problems that sometimes compensation can solve. I would say the second one, compensation solves much more than the first. But, if you have no churn issue and you have no attraction issue, I would say I would keep the extra profit and reinvest in their skills, and then once they have these new skills and education, and then create more value in the business, that's when I want to pay more because there's real ROI. The idea of just giving money because you just feel bad, I don't think that's a a wise or prudent decision. You want to have some return calculus for both you and them tied to it.