Higher Minimum Wages Will Not Guarantee Better Customer Service
There has been much controversy about raising the minimum wage. There are pros and cons that could be argued on either side. President-Elect Donald Trump is bringing a new fiscal attitude to Washington, D.C. You may or may not agree with him, but expect a change. His choice for labor secretary is Andrew Puzder, a restaurant executive who is outspoken about significantly raising the minimum wage. (As of this writing, Puzder is the choice, but he has not been confirmed.)
This article is not intended to voice an opinion about increasing the minimum wage. I won’t get into the political debate or merits of whether it should be raised or not. However, an interesting study by COLLOQUY caught my attention. They surveyed 1,500 consumers, asking if they would expect better customer service or a better overall experience if the minimum wage were raised to $15 an hour. By the way, the current federal minimum wage is less than half of that at $7.25 an hour.
The results indicated that nearly six out of 10 American consumers believe they would be justified in expecting better service with the higher wage. However, seven out of 10 doubt they will get it.
Here are some of the findings from the COLLOQUY study:
• 59% of all respondents said they are justified in expecting to receive better service and a better overall experience.
• 69% of all respondents said they would not receive better service or have a better overall experience.
•71% of men said they would not receive better service, versus 66% of women.
• 66% of young millennials, the 18-24 age group, said they are justified in expecting better service, while 59% in the same age group said they would not receive it.
• 60% of older millennials, age 25-34, said they are justified in expecting better service, while 69% said they would not receive it.
Everybody deserves to make a decent, fair wage. I won’t argue that. There are plenty of people who will argue that the current wage isn’t enough. In President Obama’s 2014 State of the Union Address, he talked about raising the minimum wage to $10.10, far from the $15 an hour in the COLLOQUY study, but still an increase of more than 40%. Supporters said that the increase would benefit the economy and result in no loss of jobs. In addition, employees would take more pride in their jobs and stay longer, thereby reducing turnover costs. The opposition claims that the increase could destroy businesses, causing massive layoffs or forcing companies to look for automation to replace employees they can’t afford to pay long-term.
Here is my take. Regardless of the findings in the COLLOQUY study, in the end, consumers don’t care what people are paid when it comes to good service. They just want the service they expect.
Undoubtedly, if a customer knows that employees are paid lower wages at a discount store compared to a higher end retailer, the expectations will be different. But, just raising the minimum wage won’t have much impact on those expectations. Customers will recognize that just because a business is forced to pay a little more for an employee doesn’t guarantee better service. Nor is there an expectation for a much higher level of service. And here is why.
No matter what you pay employees who are tasked with delivering a positive customer service experience, if you don’t hire the right people and properly train them, you can only hope that they will deliver a level of service that meets or exceeds the customer’s expectations. It’s just luck. Call it customer service roulette.
Furthermore, just paying someone more won’t increase their abilities or skills. It’s like, as the old saying goes, putting lipstick on a pig. Fundamental change takes more. Simply raising wages is only a cosmetic change – the “lipstick” in our analogy above. Employees may be happy to be earning more, but it’s still up to you to have a vision for your customer experience and the right people to deliver it. No matter the wage, the right people are still the right people, and training is essential.