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May 18 - We froze the salaries of 20 executives and it improved the lives of 500 employees


 


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Top 10 most slapped recently  4 weeks ago '19        #1
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JamesFranco 26 heat pts26
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May 18 - We froze the salaries of 20 executives and it improved the lives of 500 employees
 

 
We froze the salaries of 20 executives – and it improved the lives of 500 employees







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Five years ago, as a newly minted CEO of healthcare services company called CareCentrix, I had a complicated challenge.


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Our margins had declined and our revenue growth had stalled. My board of directors and my investors demanded improved performance: lower costs that would lead to more growth and more profit. At the same time, I was becoming increasingly worried about our team and our turnover numbers. We are a people business and in some divisions we were losing 30 to 40% of our teammates within a year.

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My HR staff suggested that we re-think our recruiting and training – which made sense – but I thought that we could do more. I thought we needed to reconsider how we supported and paid our team.

For our entry level jobs – where turnover was the highest – we paid the federal minimum wage of $7.25 an hour (or less than $16,000 per year).

Assuming nothing went wrong, and a*suming that our employees were living with another wage earner or working another part-time job, $7.25 hourly wage might be sufficient.

The reality is that for many of us, things do go wrong, and I had emails from my new teammates to prove it.

One was from a customer service representative – a young mother with a family, who had lost her apartment in a fire and did not have enough money for diapers. Another email soon followed – this employee had missed a few bills and was living out of her car with her child.

This drove me crazy: how did we get to the point where one of our employees had to apologetically ask for financial support so she and her family could put a roof over their heads?

A young mother did not have enough money for diapers. Another employee was living in her car with her child
While some of our elected officials congratulated us for creating jobs, I felt that we were failing some of our employees, and the communities we were based in. The more our executive team parsed through the requests for a*sistance, the more we all became uncomfortable with the mismatch between what we asked of our employees and what we provided to them in turn.

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Almost no one enters the infuriatingly complicated healthcare system by choice. It might be from an accident or a chronic illness, but nearly every person who needs healthcare starts from a position of vulnerability and some fear.

So, when we hire new employees, we ask that they inject their heart in every interaction – beyond just completing a task – because although it is what every patients deserves it’s not always what they receive from the system. How could we demand that our employees focus on the unmet needs of our patients, while their employer was not looking out for their basic needs ?

I took my concerns to my team. After many tough conversations, it became clear that we could not simply raise wages and hit our budget.

I came back with a challenge: what if we froze the wages of the senior team and invested the annual inflation adjustment allotted for us into raising the wages of our entry-level employees ?

I challenged the chief financial officer to see how deeply we would have to freeze wages in order to reach our goal of a base rate of $15 per hour.

The answer was that we did not have to go very deep. Over the last few decades executive salaries have skyrocketed. That translates into accelerated wage growth in the highest tiers of executives throughout American business, and it affects every company.

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What that meant for our company was that if we just froze the wages of our most senior team – less than 20 executives – we could radically increase the wages and improve the lives of nearly 500 of our teammates.

The conversation with our executives was straightforward. We were in the midst of a turnaround. We were demanding much from every corner of the company. Small financial sacrifices from those at the top could be life changing for those at the bottom of our wage scale. We needed to do it to build a real sense of Team CareCentrix. They agreed. With joy, we announced in January 2015 that our minimum base pay for employees would go up to $34,000, or the equivalent of $15 per hour.

Raising wages in the midst of a business turnaround was not easy. We needed our executive team to buy into a vision of business success where every employee had a fair shot at success. It worked.

Our business has tripled over the past five years. Our minimum wage is now approaching $16.50 per hour and last year we broadened profit sharing to all levels of the company.

I share my story at CareCentrix so that politicians and the public remember the role and responsibility of the business community in contributing to the success of the American Dream, and so that business leaders understand that an investment in the workforce is one of the best financial decisions to make.

Every business has its unique challenge, but the example of CareCentrix suggests that there is plenty wealth to go around – at the very least, to make sure that the employees we ask so much of can live a healthy and fulfilling life with the wages we pay.

In addition to serving as CEO of CareCentrix, John Driscoll is a member of the Patriotic Millionaires, a group of high-net worth business leaders and investors who are united in their concern about the destabilizing concentration of wealth and power in America
+24   

34 comments for "May 18 - We froze the salaries of 20 executives and it improved the lives of 500 employees"

 4 weeks ago '15        #2
Copykat 
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It seems like such a simple solution. People will give more effort for a job that they feel is worthwhile. Also, from a national perspective, I don’t understand why companies don’t realize that more money to employees will result in a larger consumer base. Americans like to spend. If our life needs are taken care of we don’t mind blowing the rest.
+38   

 4 weeks ago '05        #3
Fauby 21 heat pts21
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I always looked at business like this:

You pay an employee "minimum" wage, you will get minimum effort. You don't even have to pay them massive amounts either, even paying someone $2 above minimum wage, they will put in ALOT more effort and will promote your business more.

Better wages = better service = more customer interaction = more profitable.

Simple as that.
+42   

 4 weeks ago '17        #4
Ifeellikekobe 113 heat pts113
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But you will hurt those executive's feelings
+9   

 4 weeks ago '05        #5
Ron Swanson 382 heat pts382
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this could work at MANY companies but greed is much more typical than "fairness" and i unfortunately doubt we see that change any time soon.
+26   

 4 weeks ago '16        #6
North Face 42 heat pts42
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In for positivity.

Maga
-7   

 4 weeks ago '18        #7
Dehone 
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It's sad this discussion needs to be had. I would hope more companies take this approach
+9   

 4 weeks ago '16        #8
BlueGold 16 heat pts16
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 Fauby said
I always looked at business like this:

You pay an employee "minimum" wage, you will get minimum effort. You don't even have to pay them massive amounts either, even paying someone $2 above minimum wage, they will put in ALOT more effort and will promote your business more.

Better wages = better service = more customer interaction = more profitable.

Simple as that.
They greedy bro

They thinking about how they gonna buy that Jet next year and how they will keep it fueld

sh*t is sickening
+7   

 4 weeks ago '16        #9
@MR SMOOTH$ 9 heat pts
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Modern day slavery. Imagine if we didn’t have taxes as a minuscule deterrent
+7   

 4 weeks ago '05        #10
Fauby 21 heat pts21
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 BlueGold said
They greedy bro

They thinking about how they gonna buy that Jet next year and how they will keep it fueld

sh*t is sickening
But that's what I dont understand though, because they would save and make more money by paying people more. Think about it.

Pay people more you:

Save money on training new employees because current employees would want to stay

Increase profits because employees will put more into their work

Which turns into more profit because the employees are working/selling more.


They actually will make more money by this.


Edit: and another thing, depending on what your company is/sells, those employees that are making more money tend to spend money at their work location, so that increases their spending habits at work locations also.
+10   

 4 weeks ago '16        #11
BlueGold 16 heat pts16
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 Fauby said
But that's what I dont understand though, because they would save and make more money by paying people more. Think about it.

Pay people more you:

Save money on training new employees because current employees would want to stay

Increase profits because employees will put more into their work

Which turns into more profit because the employees are working/selling more.


They actually will make more money by this.
I know I with you right there brudda!

It’s these why peephole that don’t understand
+2   

 4 weeks ago '04        #12
jiggyfresh1 8 heat pts
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 Fauby said
But that's what I dont understand though, because they would save and make more money by paying people more. Think about it.

Pay people more you:

Save money on training new employees because current employees would want to stay

Increase profits because employees will put more into their work

Which turns into more profit because the employees are working/selling more.


They actually will make more money by this.


Edit: and another thing, depending on what your company is/sells, those employees that are making more money tend to spend money at their work location, so that increases their spending habits at work locations also.
That training sh*t is spot on . My old job ( health care cust serv ironically) had an audit one time and we found the cost to train a new hire for us was between 6 to 8000$ each .

We also had a 30 to 40% turnover rate and paid the incoming CSRs like 11$ an hour . Everybody talks in call centers .

Ppl was leaving for better paying jobs every day . Would come to work just to search jobs on the CPU. Management tried everything except increase pay .

Google the company Maximus , they get hella money
+7   

 4 weeks ago '09        #13
messy marv stan 5338 heat pts5338
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 @MR SMOOTH$ said
Modern day slavery. Imagine if we didn’t have taxes as a minuscule deterrent

theres no reason why the average ceo pay should be around 300 times what their average employee makes. no ceo or head executive needs to make $100 million when employees are struggling. and i think all ceo "retirement packages" should be limited to $5 million
+6   

 4 weeks ago '05        #14
Fauby 21 heat pts21
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 jiggyfresh1 said
That training sh*t is spot on . My old job ( health care cust serv ironically) had an audit one time and we found the cost to train a new hire for us was between 6 to 8000$ each .

We also had a 30 to 40% turnover rate and paid the incoming CSRs like 11$ an hour . Everybody talks in call centers .

Ppl was leaving for better paying jobs every day . Would come to work just to search jobs on the CPU. Management tried everything except increase pay .

Google the company Maximus , they get hella money
Yeah man, think of the turn over rates of places like fast food, grocery store, low level employment jobs.

Take McDonald's for an example, all the people they hire that they need to train. Most people cannot just walk in and ready first shift as McDonald's has a certain way of doing everything. Now add the salary or hourly pay for X amount of people to train those new workers and then the pay for having them mirror other employees before they can work on their own.

It's insane the cost of new hires, there's alot of people that are quite fine and enjoy working places like Walmart, home Depot etc, the only thing they leave is for more money.

Pay them a decent wage and those employees become life long employees that need minimal training. Which over the years they learn how to do their job more productively then new hires
+5   

 4 weeks ago '15        #15
PolygonMafia 4 heat pts
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Bumping payroll by 2.5%?! My god... how will we afford it?!

*clutches pearls*
+1   

 4 weeks ago '15        #16
40 acres 37 heat pts37
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We can't even get them n*ggas to pay normal taxes. You want them to lower their income good luck lol
+8   

 4 weeks ago '15        #17
JayJedi 6 heat pts
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 40 acres said
We can't even get them n*ggas to pay normal taxes. You want them to lower their income good luck lol
/thread
+3   

 4 weeks ago '16        #18
postemupndunkit 6 heat pts
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 Fauby said
Yeah man, think of the turn over rates of places like fast food, grocery store, low level employment jobs.

Take McDonald's for an example, all the people they hire that they need to train. Most people cannot just walk in and ready first shift as McDonald's has a certain way of doing everything. Now add the salary or hourly pay for X amount of people to train those new workers and then the pay for having them mirror other employees before they can work on their own.

It's insane the cost of new hires, there's alot of people that are quite fine and enjoy working places like Walmart, home Depot etc, the only thing they leave is for more money.

Pay them a decent wage and those employees become life long employees that need minimal training. Which over the years they learn how to do their job more productively then new hires
For sure.

I always said whenever I get on, I'm gonna own all the franchises in the hood I can and pay them more than minimum wage + give them benefits and scholarships

That's one way of giving people a helping hand and they are still working for it at the same time
+5   

 4 weeks ago '16        #19
North Face 42 heat pts42
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 @MR SMOOTH$ said
Modern day slavery. Imagine if we didn’t have taxes as a minuscule deterrent
No taxes in Florida

 4 weeks ago '19        #20
Gold Face 2 heat pts
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Every body in this thread pocket watching

Like a homeless dog looking for scraps

Stack your acorns and make a move if your not happy with your job

If you getting paid 10 bucks an hour to work drive thru. Your over paid

You guys are only making the corporations complete take over even easier

The average mom and pop shop can’t afford to raise your salary. So instead your begging corporations to do. Which they certainly can but adios competition from mom and pop stores permanently

This is the death blow



Last edited by Gold Face; 05-19-2019 at 10:11 AM..

 4 weeks ago '17        #21
Rule 336 118 heat pts118
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 North Face said
In for positivity.

Maga
f*g**t


Last edited by Rule 336; 05-19-2019 at 11:11 AM..
+2   

 4 weeks ago '17        #22
Nosbig 1 heat pts
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Yeah but those executives couldn’t upgrade their beach houses or upgrade their Ferrari
+1   

 4 weeks ago '05        #23
pnoi89 18 heat pts18
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 messy marv stan said
theres no reason why the average ceo pay should be around 300 times what their average employee makes. no ceo or head executive needs to make $100 million when employees are struggling. and i think all ceo "retirement packages" should be limited to $5 million
How should the entertainment industries handles things? The faces of the entertainment industry make 3,000x more than their counterparts on a given project! Let alone the majority shareholders. Should we cap all incomes to no more than $5 million a year?
+1   

 4 weeks ago '04        #24
qutaboi225 62 heat pts62
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What's crazy is their base.....which is largely poor and suffering, defends them making that much money. sh*ts like living in the matrix
+4   

 4 weeks ago '16        #25
Strong Side Iso 1 heat pts
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 Copykat said
People will give more effort for a job that they feel is worthwhile.
I don't really see this. A lot of people do not have a good work ethic.

If you have to pay the same person more for them to work harder, their work ethic is shot anyway. You should work hard with any job, regardless of pay.

If you pay hourly employees more, a LOT will come to work to be on the clock, not to work harder. There's always bullsh*t coming from management or supervisors, at work, with any job, any career and there's a lot of people that will break even with the bullsh*t and say, "Hey, I get paid by the hour anyway. They can kiss my a*s." Nobody is not gonna feel overworked just because they're getting paid more.

If someone is asked to do something that's "not in their jobs description" or someone else's job, they're not gonna want to do it just because they're getting paid more. There's a lot of people who feel too stressed, too overworked, complainers, bring issues from home or just plain lazy jack a*s people... to feel that any job is paying them enough. Bottom rung employees especially. No matter how much of a raise you give them.

I can't expect employees to be happy just because you'll pay them more but over work them or expect them to work themselves harder. I just can't see it. If you give people an inch, they'll take a mile. Not all, but a hell of a lot. Lot of folks will get too comfortable and entitled.

Just my experiences.

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