When companies analyze their turnover rates, they will likely notice that minimum wage jobs have a higher turnover rate than higher paying positions.
There are several different reasons why minimum wage jobs regularly experience these higher-than-average turnover rates.
- Education – Many minimum wage employees are not in working positions where they have long-term dedicated interests. In some cases, employees in these positions may lack the education that is necessary to obtain a better paying job. Sometimes employees are continuing their education and only have a minimum wage job until they receive their degrees. To help overcome this turnover, employers can offer educational opportunities to help employees improve both their personal and professional skills. When companies invest in their employees, they feel more loyalty to businesses.
- Economic Conditions – The economy plays a significant contributing factor to minimum wage turnover. During exit interviews, one of the most cited reasons for leaving minimum wage jobs is seeking higher-paying employment. When the economy is healthy and ripe with opportunities, there tend to be more opportunities for good paying jobs. When the economy is poor and if businesses are experiencing cutbacks, layoffs, etc., more people are willing to take minimum wage jobs.
- Turnover – Companies will need to analyze the costs of paying workers minimum wage and having to train new employees for these positions, especially if businesses have high turnover rates. Companies need to determine if they can afford to pay their employees more than minimum wage. Secondly, to help absorb some of these costs, can any expenses be passed down to customers? Finally, if employers want to pay employees minimum wage, they need to determine if they can absorb higher turnover rates.
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