What Would Happen If You Paid Your Staff More?

Here's a question that I suspect will divide opinion amongst business owners.

What do you think would happen if you increased your team's pay by 10% tomorrow?

For many, the response will be immediate.

"We can't afford it."

"We already pay the minimum wage because that's all the business can sustain."

"Paying people more doesn't mean they'll suddenly work harder."

They're all perfectly reasonable arguments. Wages are one of the biggest costs in almost every fitness business, and increasing them without a guaranteed return feels like a huge risk. However, I wonder if we're asking ourselves the wrong question.

Rather than asking whether we can afford to pay people more, perhaps we should be asking whether we can afford not to.

One of the most famous examples of challenging conventional thinking came from Dan Price, CEO of Gravity Payments in the United States. Back in 2015, he announced that the minimum salary within his company would increase to $70,000 a year.

The reaction was exactly what you'd expect. Critics said it would destroy the business, profits would disappear and employees would inevitably take advantage of the situation.

Instead, the opposite appeared to happen.

Over the following few years, Gravity Payments reported that revenue tripled, its customer base doubled, profits increased significantly and staff retention improved dramatically. Employees were also buying homes at far higher rates than before, something many attributed to the improved financial security they now enjoyed.

Now, before anyone points it out, I'm not suggesting every gym owner should suddenly start paying everyone £70,000 a year.

What I am suggesting is that perhaps we underestimate the commercial value of making people feel genuinely valued.

Let's be honest. People go to work for many reasons. They want to enjoy what they do, work with good people and feel proud of the company they represent. However, the primary reason most people go to work is to earn money. It's what allows them to pay the mortgage, support their family and enjoy life outside of work.

So why are we surprised when a good employee leaves for another employer offering an extra pound an hour?

Perhaps we need to think differently.

Instead of promising future rewards if targets are achieved, what if we invested in our team first? What if we demonstrated trust by saying, "We believe in you enough to increase your earnings, and in return we'd like you to help us grow the business."

I'm not necessarily talking about a permanent pay rise. Personally, I quite like the idea of introducing a structured six-month performance bonus linked to clearly defined business objectives.

The important difference is that the investment comes first.

Psychologically, that's incredibly powerful. Instead of asking staff to prove themselves before they're rewarded, you're demonstrating that you value them from day one. In return, you're asking them to help build something bigger.

Let's look at some simple maths.

For a full-time employee on minimum wage, a 10% increase would cost approximately £260 per month once National Insurance and pension contributions are included. Obviously, every business is different, and if your total wage bill is £10,000 a month then you're looking at around a £1,000 monthly increase.

That sounds expensive until you compare it with the cost of replacing good people.

Recruitment isn't cheap. Training takes time. New starters are rarely as productive in their first few months, member experience often suffers and management spends countless hours interviewing, onboarding and supporting new employees.

Retention isn't just important for members.

It's equally important for staff.

What if that additional investment resulted in a happier team? What if staff became more engaged with members, sold more memberships, retained more clients and genuinely took greater pride in the business?

Would the investment suddenly seem worthwhile?

I think it probably would.

Of course, there will always be concerns about paying more to people who don't deserve it. That's a fair point, but I'd argue that if someone still isn't performing after you've invested in them, trained them and given them every opportunity to succeed, then you simply manage their performance as you normally would.

The bigger picture is that your best employees notice these things.

Great people want to work for employers who value them. When you create a culture where success is shared, high performers tend to raise the standards of everyone around them. Those who aren't prepared to contribute either improve or naturally move on.

That's exactly the kind of culture most businesses are trying to build.

I can already imagine HR professionals reading this and shaking their heads. I'm not saying this approach is suitable for every business, and I'm certainly not suggesting owners should put themselves under financial pressure they can't sustain.

What I am saying is that there may be another way of thinking about pay.

Imagine agreeing a six-month performance bonus linked to measurable business growth. If the business grows by 5%, perhaps the bonus continues for another six months. If growth reaches 15% or 20%, perhaps the team shares even more of the success they helped create.

Instead of wages simply being another overhead, they become an investment in the people responsible for driving your business forward.

It's undoubtedly a brave approach because the employer takes the first step. You're investing before asking for results, not the other way around. However, that's exactly what leaders do. They create belief first and performance often follows.

Would it work in every business?

Probably not.

Could it transform the right business with the right team?

I genuinely think it could.

So here's my question.

If you knew that investing an extra 10% in your team today could significantly improve morale, retention, sales and business performance over the next six months, would you be brave enough to try it?

I'd love to hear your thoughts because I suspect this is one of those ideas that people will either love... or completely disagree with.