To Improve Profitability, Increase Wages

By Len Christopher, Chief Operating Officer

Leadpoint works with dozens of recyclers and facilities across the country to manage the productivity of their workforce. We hear over and over that our customers want to save money wherever they can. The cost of labor – wages – is the single biggest expense for most companies so naturally our customers look there first. Cutting wages or reducing headcount is a frequent topic of conversation!

But here’s what we’ve found. Operations that increase the pay rate for recycling employees, whether to a mandated “living wage” or to adjust for changes in the cost of living, enable us to recruit and retain a higher caliber of employee.

Motivated employees stay on the job longer. That means on-boarding and retraining activities are reduced.

When employees believe they are being paid fairly, at a wage that’s competitive in their community, they work harder and are more productive on the job. We’ve seen that translate to faster picks, less contamination, less equipment down-time, and improved diversion rates.

In one case, we worked with a customer increase wages and in turn, to reduce their MRF workforce by 20 percent, cut the work week from six days to five, and actually improve the quality of their product.

It’s bold to think that raising pay will automatically improve profitability, or to believe that every MRF can expect a 20 percent cut in their labor force. And we agree.

What we do advocate, however, is exploring the topic in consultation with your Leadpoint representative. We can do an in-depth wage analysis for your market and determine what options make the best sense for you.

Making a workforce more productive and improving site performance is what we do best.

There are many ways to get there. Wage management is just one of them. Let’s discuss options for your site.