Staff Development, Compensation & Benefits for Low-Wage Workforce

Whether it is leaning in, flexible workplace options or staff development, it seems that the conversation is usually about the professional part of the workforce. Those who work in low-wage jobs are often left out of the conversation. These are the people working in retail, food service, warehouse and production. Those working in these jobs make up a large portion of the workforce, so it is imperative that we think about them when creating staff development programs, compensation structures and benefits.

Why Low-Wage Workers Matter

According to the Organisation for Economic Co-operation and Development (OCED), 25.3% of American workers are in low-wage jobs.1 The Bureau of Labor Statistics (BLS) states that in 2013, nearly two-thirds of workers in jobs that pay federal minimum wage or less are in the service industry.2 Although the service industry makes up for a large number of people in low-wage jobs, these workers also include those in warehouse, production, agriculture, customer service and a number of other jobs. These are the people we interact with daily when we go into restaurants and shop at stores. They are the ones who make sure the items we order online are boxed up and shipped to us.

While some employers tend to see this segment of the workforce as expendable, the reality is that many hours can be lost on training and hiring when turnover is high. The answer to how we better engage and develop our low-wage employees is a mix of compensation, benefits and staff development.

Compensation & Benefits

There is a lot of talk about the pros and cons of raising the minimum wage in the U.S. A number of states and cities have a higher minimum wage than the federal rate of $7.25, and President Obama encouraged Congress to raise minimum wage to $10.10. While pay is not the only factor in an employee’s job satisfaction, it is an important piece of how we recognize what employees do.

I once worked at a company with several hundred warehouse and production employees—many of whom made $8-9/hour (California’s minimum wage at the time was $8.00). In addition, increases, when they did happen, were typically no more than 1-2%. The owner’s belief was that if someone was unhappy with the low pay, they could just leave and be replaced by someone who was happy to have the job. Such a culture creates high turnover and low morale.

So, what does it look like when we put emphasis on ensuring competitive pay and benefits for low-wage workers? It means we do not simply settle for minimum wage as a way to set the range for jobs that are typically low wage. Evaluate what other similar employers are paying and set your own range at a competitive level. Remember that investing in employees is one of the most important things you can do for your business. Rather than looking at wages as a way to make cuts when money is tight, find other ways to save so your employees are top priority.

If raising wages is not a possibility, consider improving your benefits offerings. The Affordable Care Act (ACA) has opened up the possibility of insurance options for many workers who did not previously get insurance through their employers. Even if you are a small business that is not covered by the employer mandate, consider offering insurance. If you already offer insurance, lower the threshold for eligibility to make it possible for more employees to qualify.

Benefits can extend beyond insurance. Paid time off, employee discounts, wellness programs and staff appreciation events are all great ways to add to compensation and benefits. Creating a good benefits package for all employees is an excellent way to show that each member of your team is valuable.

Training and Staff Development

One key way to change the landscape for low-wage workers is to provide training and development opportunities to help them move up within your company. With the right training, your star cashier may grow to become your best graphic designer in a few years.

I think many of us underestimate the value of looking to our low-wage employees for difficult-to-fill openings. Offer regular classes on management, computer skills and other topics. Open them up to any employee who wants to attend. If a warehouse worker voluntarily signs up for a management class, consider other ways to develop the employee’s interest in leadership. When meeting with employees to check in, ask questions to see if there are skills and training they want, and seek out ways to meet these needs. Rather than seeing low-wage workers as expendable, look at them as employees to be developed.


1Mishel, Lawrence. “The United States Leads in Low-Wage Work and the Lowest Wages for Low-Wage Workers.” Working Economics. The Economic Policy Institute Blog, 4 September 2014. Web. 31 March 2015.

2U.S. Bureau of Labor Statistics. “Characteristics of Minimum Wage Workers, 2013.” BLS Reports, March 2014. Web. 31 March 2015.

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Stephanie Hammerwold

Stephanie Hammerwold, is the founder and director of Pacific Reentry Career Services, a Southern California nonprofit that helps formerly incarcerated women find and maintain employment. She also blogs on a variety of HR topics as the HR Hammer. When not volunteering for her nonprofit, Stephanie has a day job in HR at a tech startup in Irvine, CA.

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