How Do You Budget for Rising Employee Wages Without Cutting Into Their Own Pay?

Question

Hey guys,&nbsp;
In our area of Canada everything is more expensive (Canadian inflation) wages seem to really be bumping up to around $50 / hour for an Electrician. Right now my guys are $40 + van + $5g bonus plan so let's call it $45 / hour. Which is what I pay myself.&nbsp;
We are busy... but it's also summer and summer is usually busy, this will die down I'm thinking. So I'm hiring at the moment but feel the pressure to pay more and then at the same time I'm thinking I also need to give myself a raise!&nbsp;All good things for the budget I'm about to make for this next fiscal year, but just curious if anyone else is feeling this same pressure?&nbsp;

homeownership · Answer

Could you set aside a small percentage of quarterly profit for a team bonus pool? Employees could qualify after 90 days, and longer-serving employees could receive a slightly larger share. I would include the office staff because their work also supports revenue .

Even a small quarterly pool could help employees feel included in the company’s success. If the individual payout is too small to be meaningful, the business could use it for a team lunch or another shared reward instead.

chuckhireexpert · Answer

Before I bump everyone's pay, I ask myself whether I could still afford it if work slowed down 20–30%. If the answer is no, I hold off.

I'd also make sure your pricing is keeping up. If you're charging the same rates you were a year or two ago while wages, insurance, fuel, and materials all went up, eventually you're paying for inflation out of your own pocket.

wiringbyron · Answer

We do have a really good quarterly and yearly bonus plan in place already.

wiringbyron · Answer

So right now it's insanely busy, so I do feel comfortable raising rates, but I have a feeling in the fall and winter it's gonna drastically slow back down again. We will see.

But yes, rate bump is definitely one part of the issue, for sure.

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How Do You Budget for Rising Employee Wages Without Cutting Into Their Own Pay?

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