Welcome to the New Year and we hope your business is off to a great start. As always changes – and their challenges — come with the New Year. This year, one factor going into your expenses will be minimum wage expenses, which are going up in many states.
In 2018, the federal minimum wage will remain at $7.25 per hour for non-tipped employees and $2.13 per hour for tipped employees, but many states are opting to increase the wage.
The following table, courtesy of Ogletree, summarizes the statewide minimum wage increases that have been announced for 2018, along with the related changes to the maximum tip credit permitted and minimum cash wage allowed for tipped employees:
Depending on what states you operate in, and which business lines you are in, these changes can certainly impact your business. Currently, 18 states have implemented increases for 2018.
As many staffing firms provide “front-line” and entry workers, you’ll need to be concerned about these hikes and how they can affect your profit.
Just as an example, let’s look at New York. In New York State, the minimum wage for fast-food workers outside New York City rose from $10.75 to $11.75 over the New Year’s weekend. It will hit $15 an hour by July 2021.
How do you adjust your business to cope with any hikes or extra work and processing that comes with it? We’ve got some tips for you.
Increase Your Fees if Necessary
OK, perhaps you took a gulp while reading this first tip. But ideally you have a good rapport with your customers and they understand the environment you are both operating in.
Even if your customer balks, the simple fact is that the increases are out there in black and white. It could be an opportunity to educate your client, and in fact bring you closer together.
You should remember, as well, that while your customers are rarely happy about a price hike, your competitors (and perhaps their vendors or service providers) are increasing prices as well.
A good tip is to keep track of competitor pricing trends and take care not to raise your own rates too high. This taints the process for everyone.
Automation/Outsourcing will Keep Your Costs Down
Technology can be your friend, especially when it comes to streamlining efficiency, time, and effort. A good ATS/CRM system will help you keep great workers in the pipeline and match candidates to customers with a minimum of headaches.
At Madison we’re very proud of our robust ATS/CRM system. We also offer a back-office suite of services that will help you manage any wage increases and regulations more effectively. Besides billing and collections, all done professionally and smoothly, we have our payroll processing, which includes:
-Multistate payroll processing
-Printed checks or direct deposit with online paystub
-In-house staff payroll
-Online payroll processing application
-Online timecard system
-Multistate new hire reporting
-PTO & sick pay tracking and reporting
-Workers’ compensation reporting
With Madison, you’ll be able to handle wage increases and tracking efficiently, and help ensure customer satisfaction.
Look at Funding Options to Help You with Wage Hikes
Even a savvy business owner can be surprised by unexpected wage hikes or unanticipated job trends. At Madison, we can get you over the hump by appropriate, flexible funding.
In this particular scenario, the minimum wage hikes, this can really help with the gap between paying and billing. Contact us today to see how a partnship can positively impact your business.