Would a $70,000 minimum wage work?

Stephen Tweed | May 27, 2016 | Newsroom
By Stephen Tweed  Yesterday in USA Today, I read another article about Dan Price and his credit card processing company, Gravity Payments.  Dan is the son of a friend and professional speaking colleague, Ron Price. Dan made international headlines and turned the national debate over a $15 minimum wage inside out several months ago by…

By Stephen Tweed  Dan Price, Gravity Payments

Yesterday in USA Today, I read another article about Dan Price and his credit card processing company, Gravity Payments.  Dan is the son of a friend and professional speaking colleague, Ron Price.

Dan made international headlines and turned the national debate over a $15 minimum wage inside out several months ago by announcing that he was raising the salaries of his 100 or so employees to at least $70,000.  Take a look at the Full Story.

According to the article, Dan’s action has gotten mixed reviews:

  • Revenue has soared due to the international publicity
  • Profits surged, but have dipped this year due to increased labor costs
  • Employees describe more comfortable, stress free lives allowing them to focus on their jobs
  • Two people quit in anger because lower performing colleagues were getting big raises

Some Key Questions

In reading this article, and the previous news reports on Dan Price, some interesting questions have been raised for home care CEOs as the $15 Minimum Wage frenzy sweeps across the country.

  • Would home care workers be happier and less stressed if they made substantially more money?
  • If workers are happier and less stressed, would they provide better service for clients, be more reliable, and stay longer?
  • What will the increased cost of care do to the price we need to charge clients?
  • What % of our current clients will still be able to afford care if the price goes up by 50%?
  • If the industry paid better, would it be easier to recruit and retain caregivers?

What Affect Does Money Have on Recruiting Caregivers?

This conversation is particularly relevant in light of our research and development work on Conquering the Caregiver Recruiting Crisis.  At Leading Home Care, we have launched a major initiative to study the crisis, and to develop solutions.  One of the questions we have been exploring is about the impact of hourly pay rates on caregivers.

  • What if you offered $1.00 more per hour than your competitors?
  • Would that make it easier to recruit?
  • How would that affect retention?
  • Could you raise your bill rates to cover the cost of additional pay rates?

These are all questions we are examining as we build our knowledge base around this issue.  It’s pretty clear from all of the work we’ve done with hundreds of home care CEOs already this year, and from the results of this year’s Home Care Benchmarkingceo Study from Home Care Pulse, that this crisis is real. CEOs who fail to address it will limit the ability of their company to grow.

For more up to date information on what you can do to Conquer the Caregiver Recruiting Crisis, become a Member of the Home Care CEO Forum and join our monthly CEO Round Table video conferences to hear what other industry leading CEOs are doing.

We also have some spots available in our Strategic Growth Mastermind Group, our TOP 10% Mastermind Group, and our $15 Million Mastermind Group

 

 

Stephen Tweed
Stephen Tweed, CSP, began his journey as a business strategist in home health care in 1982. Today, Stephen is among the top thought leaders in Home Care strategy and management. He has worked with top 5% companies from across the US. He is a sought after speaker at from national and state association events.

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