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$15 Federal Minimum Wage Increase Outsourcing Can Help Businesses Cope


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Published Feb 04, 2021

How Outsourced BPO Can Help Offset a $15 Minimum Wage

The 2020 Presidential and Congressional elections have ushered in many ups and downs along the way. COVID-19 has left many businesses in its wake, but lawmakers have been racking their brains for ways to provide relief to the US economy.
With the recent shift in elected officials, new ideas have been brought to the table. One of the latest developments is talk of a $15 federal minimum wage being rolled out. The Fight for $15 has been making waves, but what is it and how might it affect your business?

What Is the Fight for $15?

The 116th Congress established a bill called Raise the Wage Act. This bill passed the House but failed to pass the Senate. Since that time, there has been a political movement called The Fight for $15 that kept this issue from fading from the public eye. The Raise the Wage Act of 2021 by the 117th Congress calls for a similar scheduled minimum wage increases that will gradually step up the federal minimum wage to $15 an hour.
As part of President Joe Biden’s proposed $1.9 trillion plan for economic relief, the package calls for a federal minimum wage of $15 an hour in addition to additional $1,400 stimulus checks. While business aid could be provided in this stimulus plan, the minimum wage hike has left many businesses wondering if they can maintain operations with the proposed additional payroll costs.

What Would a $15 Minimum Wage Mean for Employers?

After the Raise the Wage Act was passed by the U.S. House in July 2019 (but not so by the Senate), the Congressional Budget Office, an agency for nonpartisan analysis for the U.S. congress, analyzed what a minimum wage increase to $15 would mean for Americans.
The resulting CBO summary said, “Increasing [the federal minimum wage] would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall.” Even with a gradual increase over the span of five years, millions of workers would be projected to lose employment.
In an Inc. article, business owner, Norm Brodsky, states why a drastic increase in the federal minimum wage can be detrimental to businesses and employment. “The reason is simple math. Our restaurants will no longer be viable if labor costs rise above 35 percent of revenue. And no, we can’t just jack up prices and pass the additional cost along to customers. There are real limits to what people will pay.”
So, what would a $15 federal minimum wage mean for your business? This would negatively impact some businesses more than others. Ceteris paribus, an increase in federal minimum wage means that payroll goes up and your operating and net income goes down.
Despite US lawmakers mandating a minimum wage increase, they likely won’t provide advice on how to communicate to stakeholders why performance is suffering. Figuring out how to reconcile a minimum wage hike lands squarely on your shoulders, but that doesn’t mean resources aren’t available. AtPoint, a US-based company with nearshore operations offers a range of cost-saving outsourcing solutions.

Outsourcing Helps Alleviate Payroll Increases

If at least one segment of your business relies on administrative or customer service employees that are paid below $15/hr., the fight for $15 will impact your bottom line. However, outsourcing to a reliable third-party can provide much needed relief.
We get it – you need to keep customer service and technical support quality high so that your customers stay happy and customer lifetime value is retained. Outsourcing gives pause to many business owners due to concerns like those listed below.
  • Poor English
  • Lack of control
  • Unreliable utilities
  • Communication barriers due to cultural differences
  • Communication struggles due to time zone differences
However, there is a very clear difference in nearshore vs. offshore outsourcing that can positively benefit your business. In fact, the benefits of outsourcing customer service to nearshore BPO centers can effectively eliminate all the concerns listed above.
For example, AtPoint has 25+ years of business process services experience. Our nearshore operations centers are in Jamaica. This means cultural affinities are very similar to those in the US, and time zone differences are generally a non-factor.
With our Nearshore BPO solutions, maintaining control isn’t an issue. Your in-house management team provides granular guidance to our highly-trained agents through daily calls and contact. Not only are our agents provided 2-4 weeks of product-specific training, but they are dedicated to your account – no pooled agents that cause confusion or customer frustration.

AtPoint Provides Cost-Saving Payroll Alternatives for Your Business

A fully-loaded AtPoint agent costs anywhere from 1/3 to ½ that of a comparable domestic agent. If you’re looking for a way to maintain profitability and customer satisfaction in the face of a minimum wage increase, look no further. AtPoint is your one-stop shop for customer service outsourcing, technical support outsourcing, and much more.
Contact us online today to learn how your business can benefit.