Is it good employer strategy to pay my employees just enough so that they can’t save money, so that they can never walk away from the job?
Like, there is a threshold where if they are able to save X per month, they will eventually use that against you and quit at an inopportune time?
And if that threshold falls below state mandated minimum wage, what steps can be taken to mitigate this?
No, maslows hierarchy of needs mandates a lack of savings equating with a lack of stability at lower tiers and hence your employees will fail to function at higher levels. So you need to pay more than minimum rates in every role, everywhere, if you want to actually have people and not worried as fuck drones.
Now, how much more depends on local factors - but here’s a quick rule: if they add value to your business pass on about 25% of that profit from that individual. Finding a profit for a person can be challening, this is why you get a HR person and accountants.
Wait so are employees lucky if they get 25% of the money they earn their employer beyond their cost to the employer?
That is, if I cost 100k including benefits and support staff costs and my work directly generates 200k profit over all costs, does that mean that the business should pass 50k to me and take the remaining 150k in order to follow the quick rule?
The money they earn is income, not pure profit. The business usually has other expenses that have to be covered. In that case 25% is usually not a bad deal.
Yup, welcome to capitalism!