Rec CEO sets £40k minimum wage for all staff

Dan Price is the entrepreneurial businessman who decided to pay his staff a $70,000 (£56,700) minimum yearly wage – it earned him a book deal, as well as a company full of happy employees.

Inspired by the credit-firm boss, a recruiting firm CEO has now decided to follow suit and increase the pay of all her staff: from entry-level to management.

After hearing a speech by Price, Megan Driscoll, CEO of PharmaLogics Recruiting, increased the base salary of her recruiters from $37,000 (£29,900) to $50,000 (£40,000) – with on-top commissions inflating pay-packets to $70,000 a year.

The Boston-based biopharmaceutical recruiting firm has already experienced several positive effects, including: falling employee turnover and rising revenues – with an expected $15million (£12.1million) revenue this year, up from $6.7million (£5.4million).

On top of this, Driscoll brought in a trainer for her staff, twice a week as well as in-office yoga, staff-food and a gratefulness board. The latter of which is a way for staff to publicly display appreciation of each other’s efforts.

Speaking to Forbes, Driscoll said: “We set aside profit to pay for it. What happened is our profit margin stayed the same, but our revenues grew like 40%. So, the revenue growth paid for it. People ask, “What are the benefits?” There are probably direct benefits to top-line growth though it’s hard to say because we are in a growing economy and a high-growth industry. We have reduced turnover substantially. We had 60% turnover in 2015 and now we have 20% turnover.”

Whilst pay-packets are central to a potential employee’s decision in considering a role, Recruitment Grapevine have reported on pioneering employers who offer a swathe of other benefits – including free bikes.

Comments (1)
Wed, 8 Feb 2017 4:32pm GMT
Jon Spencer
Interesting! This will have positive effects: You can set the performance bar high, and then only recruit the best people. The issue of money will be off the table, so people can concentrate on performing well.

Watch out for the negatives: people will not want (or be able to) leave, yet a healthy turnover of staff is not a bad thing. Watch out for a 'closed shop' mentality developing around the jobs there.

Secondly, it will create a 'bubble' in the local employment market; rival firms will have to increase their rates to attract good people, and this might create a local pay 'arms race' (which might be unsustainable in the medium / long term). However, a good development, and I wish them well!
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