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The wage war has begun. So, what can YOU do about it?

By the end of January, some three dozen US companies had announced new employee bonuses, hourly wage increases or other modifications in their compensation programs attributed to the 2018 tax cut. One might think that these announcements signaled a definitive shift in the long-stagnant US wage and salaries growth rate.  However, on their own, these headlines have no real impact on wages but should impact your strategic management priorities.  The real factors that will drive growth in wages are buried beneath the headlines and are even more powerful than these initial tax saving disbursements. 

Our low unemployment rate, the infusion of capital from the tax cut and the restriction of a key staffing strategy will conspire to raise wages consistently for the first time since 2010.  The key staffing strategy that will be restricted is immigration.  Although at the time of this writing there is no definite new legislation on immigration, there is much talk of change and we already see increased enforcement of current immigration laws.  This indicates a real change in how companies might leverage immigration to resolve short-term talent shortages when their growth plans are ready for implementation.  In fact, they could be hampering the development of those plans, but regardless, economic growth will be delivered in 2018 and so will wage increases.

So, how can you prepare to win a wage war? 

1. Stay competitive with your compensation plans.

Benchmark your compensation program and keep monitoring it.  Companies will be combatting wage growth to attract and retain employees that have been loyal through the years of wage stagnation.  Having great market data is great, but you must also use it proactively.  If your research indicates that current staff salaries are below the market, plan to correct this before hiring new team members to keep the current employees from leaving.

However, staying on par with wages alone will not be enough to win in today’s environment. 

2. Build strong and deep connections with your staff through your culture.

The advantages of building a strong company culture are not new, but it is not as mainstream as it could be.   I believe management at all levels needs to “take up arms” in building culture during this next economic cycle.  Building a strong culture does not have to be limited to a corporate initiative - any team leader can build a strong culture within their team to protect their employees from talent poaching.

Creating a Strong Culture - simplified

The foundations of culture are values, beliefs, and behaviors.

Values: those things that are most important to you. These values are born from deeply held beliefs and manifested by specific behaviors. Training teaches the practices that will result in the desired behaviors. These behaviors are included in performance metrics and reported on and rewarded.   It is a very deliberate management discipline and when executed consistently creates a strong unifying culture.

Let’s quickly illustrate this with a great company: HubSpot. HubSpot is inbound marketing and sales software that helps companies attract visitors, convert leads, and close customers. Their company culture is built around their Culture Code.

Values

HubSpot has 7 core values articulated in its Culture Code. Together this Culture Code strives to deliver on their goal: Creating A Lovable Company.

Beliefs

Each Culture Code (values statement) has a deeply held and personal story for why each of these values was selected and it is rooted in the founders and success of the company they have built. 

Behaviors

#3 of the HubSpot Culture Code is: We share openly and are remarkably transparent.  Behaviors that delivers on this are:

  • everyone has open access to anyone in the company,
  • there are no corner offices, and
  • even as a publically traded company that has restrictions on sharing information, they have officially made every employee a designated insider so they can legally share all of their financial informaton with their employees.

Learn more about The HubSpot Culture Code

 Given this simplified approach, any team can build a strong culture by defining its values, articulating the beliefs for these values, agreeing to behavior that would deliver on these values and then train, monitor and reward to strengthen this culture.

It may sound like an investment, but not as great of an investment as trying to replace a key position or two on a team.

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Post Tags: Strategic Management

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