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Payroll Sales Pro Issue #20--How Small Business Can Use a Higher Minimum Wage to Rethink Operations
May 30, 2016

May 30, 2016

Monday Morning Pick Me Up

Inspiration and Information to start your week right

"I can't change the direction of the wind, but I can adjust my sails to always reach my destination." --Jimmy Dean

Payroll Talking Points--How Small Business Can Use a Higher Minimum Wage to Rethink Operations

Last week we discussed the opportunity to help clients solve issues relating to the Department of Labor’s new Overtime Rule. Your current clients are talking about this issue, and many are upset about what the changes will mean for them.

They are also upset about how various new Minimum Wage proposals will affect their bottom line. We spoke with one small business owner, John G., who employs 16 workers at his Closet Systems company. John told us his profit margins are not what they used to be, and he is worried about keeping his business afloat if labor costs rise too much.

You can use this information to open up a conversation about payroll and the issues that are of concern to your clients. Below, we have reprinted an article from May 2nd in the Wall Street Journal by John Sullivan. Instead of worrying, Mr. Sullivan has ideas your clients may want to use as they assess their current business operations.

Talking to your clients about issues of importance to them will help establish you as a trusted partner and make them more likely to buy from you. If you’d like to provide your clients with a link to John Sullivan's article in a follow up email, use this link: http://blogs.wsj.com/experts/2016/05/02/how-small-business-can-use-a-higher-minimum-wage-to-rethink-operations/

How Small Business Can Use a Higher Minimum Wage to Rethink Operations

John Sullivan is a professor of management at San Francisco State University and a talent-management thought leader from Silicon Valley.

If you’re among employers facing a higher minimum wage, instead of agonizing over rising payroll costs, consider using the wage increase as an opportunity to rethink your operations, and to turn lemons into lemonade.

First, recognize that your new wage costs are likely to be even higher than expected. That’s because all of your hourly employees working levels above entry-level workers, will – for equity purposes – be expecting a proportional raise. Fortunately, if you use the right advanced people management tools, it’s relatively easy to improve productivity to match even a 10% increase in costs.

Raise the “productivity bar” in these areas:

Improve retention. Retention is the area with the highest ROI. Start by identifying the high-impact employees that you would regret losing. Then conduct a “stay interview” with each and let them know how important they are to the team. During this interview, ask them to list the factors that keep them working with you and any frustration factors. Spend time reinforcing the positive and minimizing the negative factors. Finally, add one or two excitement opportunities that would really energize them, like letting them pick their own short-term one-day-a-week job/project rotation.

Improve the productivity of current employees.

A great best approach for increasing productivity is eliminating barriers to employee productivity. Challenge your employees by asking them “What would enable you to produce 20% more?” Ask them to identify the barriers, rules, policies, approvals, etc. that keep them from reaching that higher goal. Work together to eliminate the easiest-to-remove barriers. Your top performers want to excel, so assign each “stretch goals” that require them to perform at a higher level or to learn new areas. Measuring and internally posting individual and team performance results also increases productivity, because it creates both widespread awareness of performance problems and healthy competition.

Reduce the percentage of weak performers.Rank your employees by their performance level. Rather than trying to “fix” weak employees, realize that the higher ROI comes from releasing them. If you can’t release them, reduce their hours or move them into lower-impact jobs.

Hire better performers. Whenever an opening occurs, ask your best-performing employees to make a referral of someone that is “better than they are.” Ask all employees to make referrals of the best employees that currently work at your competitors (your firm improves, theirs gets worse). Next, identify the sources where your best new hires came from, and look there again for additional high-quality hires. Finally, use LinkedIn to reconnect with your best former employees, ask them to return as “boomerang rehires” or to refer another star like themselves.

Improve processes. A process for sharing best practices is the fastest no-cost way to increase efficiency. Develop an internal sharing website that gives everyone access to “what works” and “what doesn’t work.”

Technology solutions. Examine software solutions that reduce overtime, improve scheduling and that increase onboarding effectiveness, that is, getting new hires up-to-speed faster. Finally, audit your competitors for software and hardware solutions that can permanently replace a layer of your now higher-cost employees.


All it takes to refer payroll is to obtain a payroll invoice from the client, then send it to us and we’ll take it from there. When the client signs up with payroll, you get paid a residual commission for the life of the client.

Remember, PayPros can typically save them 20-25% over what they are currently paying and they will get a dedicated customer service rep that really knows them and the ins and outs of their business.

Ask them for a current invoice, send it to us, and when it closes you get residual commission for the life of the client.

For more detailed payroll Talking Points tips and information, see Payroll Tips and Techniques


Think you’re ready to earn Residual Commission for the life of your clients as a Payroll Referral Rep? Contact us by calling (888) 693-4611 or filling out the form at Best Business Payroll--How to Make Residual Commission

We’ll be glad to answer any questions you may have and look forward to helping you become successful in any way we can.


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