This week’s business headlines have prominently featured Wagamama’s fine for paying some of its workers below minimum wage. The company, in a game attempt at reputation management, blamed the issue on a ‘misunderstanding’ about people buying their own jeans – which they have now ‘fixed’.
But that’s not the problem. Could the reason they got into trouble be their close adherence to paying people as little as possible? Yes, it’s legal. Yes, in the highly competitive food industry you have to keep costs low. But what’s the real cost?
Firstly, it’s the lack of a buffer. There’s no question in my mind that Wagamama didn’t mean to underpay people, but their seemingly unconnected request that people wear black jeans tipped the wage scales the wrong way. And this links into the second point – the lack of good-will that employees bring when they know they are being paid as little as is legally possible.
Why would anybody contribute anything beyond the minimum service when the company does exactly the same to them?
INVEST THE MINIMUM, GET THE MINIMUM
The minimum wage is there to protect people. When it’s treated as a maximum rather than a minimum, as a hurdle, by companies, the problems begin. Employees question every action they are asked to do and double-check any costs associated with their role. It’s transactional, and that doesn’t feel good (or end well).
Taking a look at the list of underpayers recently highlighted, what’s clear to me is the issue is going to become far bigger as more minimum-wage employees start to scrutinise every element of their employment. Why wouldn’t they?
As a final comment, Wagamama achieved a double own-goal with their stark sickness policy going viral. The ‘if you are sick you need to sort out your own cover’ policy is one doomed to a spectacular failure. Not only is it morally wrong, it will also end with an “I had to arrange cover from my intensive care bed” headline.
Don’t tackle absence issues with threats – you are simply giving the symptoms aggressive treatment. Tackle the cause… which, I would bet, for the likes of Wagamama is the company’s culture.