Volt Lighting has raised its starting hourly compensation rate to double the state’s minimum wage. The model, in wages and employee expectations, can be a road map for other businesses.
The Great Resignation has rippled through the economy like a boulder being dropped into a bathtub. Its effects are numerous and wide ranging, from an increased reliance on automation to businesses curtailing hours of operation because of staffing shortages.
The departure of so many people from low-paying service industry jobs has also provided new momentum for living-wage advocates, who say Florida’s $10-an-hour minimum wage and the federal government’s even-paltrier $7.25/hour are grossly inadequate. Whether you believe the U.S. economy was always headed to a reckoning day over wages or that mass resignations are a byproduct of the coronavirus pandemic is beside the point: The Rubicon has been crossed, and there’s no going back.
One local company to get out in front of the living-wage debate is Tampa-based Volt Lighting, a maker and distributor of a wide range of outdoor lighting for residential and commercial use. In early February, the firm, which has more than 100 employees and operates distribution centers in Pennsylvania, Texas and Nevada, raised its minimum wage from $16 to $20 an hour.
At the time, founder and CEO Alan Brynjolfsson characterized the move not as an act of altruism, but a strategic and practical play.
“New employees are demanding more and more,” Brynjolfsson says. “So I said, ‘Let’s get in front of this and be proactive,’ because that’s our mantra … let’s raise wages now, so we can keep quality employees and attract new quality employees and be ahead of the curve. When employees are not distracted by making ends meet, they can focus on creating a better culture in the workplace and providing a better experience for customers."
‘If you have to charge more, then charge more. But deliver a good result.’ Alan Brynjolfsson, founder and CEO of Volt Lighting
Brynjolfsson, 54, has the luxury of running a company that grossed more than $100 million in revenue last year and is on pace for 40% sales growth in 2022. Not every business owner, of course, has coffers of that size. But here’s the rub: Volt, which Brynjolfsson founded in 2008, was paying above-average wages long before the Great Resignation and “living wage” became hot topics, and long before the firm became an industry leader.
“Back when the Florida minimum wage was $7.50 [per hour], we paid $14,” he says. “We’ve always paid almost double.”
The details of how Volt Lighting pulled off such a feat show that its model can be applied to other businesses.
BACKWARD TO FORWARD
Brynjolfsson, a serial entrepreneur who tried his hand at telemedicine and printing before his successful foray into the lighting industry, says there’s no trade secret as to how he’s been able to pay significantly higher wages. Rather, it’s a mindset he adopted from the beginning.
“Basically, I do everything backward compared to other entrepreneurs and business owners, who look at things and say, ‘I've got this problem, I've got that problem. How do I solve it?’ They’re thinking about themselves and their business. My philosophy has always been to deliver such an outstanding experience that our customers become our best advocates.”
He adds, “Think of yourself as a customer, and give them everything they would want. And the same with the employees.”
On a related topic, Brynjolfsson believes that today’s supply-chain and staffing challenges, while rampant, can be mitigated, at least from the customer’s perspective, with a similar approach. Customers don’t care about back-of-house issues and complications, so business should stop using supply chain and staffing woes as a crutch.
“They just need the product,” Brynjolfsson says. “So solve that problem. If you have to charge more, then charge more. But deliver a good result.”
A big part of the solution, he adds, is to treat employees well so they think of themselves as “intrapreneurs” who have a vested interest in the company’s success.
“You want employees to treat the customer really well,” he says. “How do you get them to do that? Take care of them, give them opportunities, great wages and benefits, and then they’ll love working here and will take care of your customers.”
WORK HARD FOR THE MONEY
However, to paraphrase an old saying, to whom much is given, much is expected. Brynjolfsson, says Scott Somers, Volt Lighting’s warehouse manager and one of its longest-tenured employees, has set a high bar for employee performance.
“There are people, unfortunately, who can’t make the cut,” says Somers, who joined the company in 2009. “We expect nothing but the best. Perfection can’t be achieved, but if we strive for it, we can be excellent.”
'Someone’s irresponsibility becomes someone else’s responsibility, so take pride in everything you do.' Scott Somers, Volt Lighting's warehouse manager
Because Volt ships so much of its product direct to consumers (there’s a separate brand, called AMP, for contractors) and it refuses to outsource even a single aspect of its distribution process, the customer service and warehouse staff, rather than Brynjolfsson, have essentially become the face of the company and its salesforce, according to the CEO.
“I need them to be able to make a great presentation to the customer,” Brynjolfsson says. “To do that, you have to elevate them above minimum wage. We have a certain standard of excellence that we want to make sure is done, and you can only do that if you’re doing it yourself. So we have no one else to blame.”
Volt Salaried workers such as Somers will also see a bump in pay in conjunction with the jump in minimum wage — as much as much as a 20% increase, depending on the size of their bonus.
“Having high-quality wages helps you get quality people,” Brynjolfsson says.
Are there risks and downsides to such a sudden surge in employee compensation? For some companies, maybe, but “I don’t see any constraint on profitability,” Brynjolfsson says. “It’s really just about us executing properly. The first couple of years, yes, you’re just trying to survive, but now that we’re as successful as we are, I can do whatever I want. But the most important thing is doing the right thing … having a great reputation, making money the right way and truly adding value and helping people.”
The proper execution philosophy covers the entire company. Somers, for example, who has nine warehouse staff members working under him, says he’ll make workers repackage products if a single sticker or section of tape on the box is crooked.
“It doesn’t matter what the cost of the box or the cost of the tape is,” he says. “Custom-printed tape is extremely expensive, but I don’t harp on that and say, ‘Hey, you’re costing the company money.’ My goal is, ‘What is the customer getting?’”
That difference in perspective is small but crucial. “Someone’s irresponsibility becomes someone else’s responsibility, so take pride in everything you do," Somers says. "Everybody’s role is important, but I tell my guys all the time, ‘You guys are the most important, because we’re on the front lines. The customer sees what you do, the way you put the fixtures in the box, the way you put our Volt signature tape on it.’”
The key to easing performance-related tensions, Somer says, is to put in place clear processes and procedures for all department operations. Then follow them to the letter.
“The only stress is caused when somebody tries to alter the process to fit their situation, instead of following the process,” he says. “If we follow the process, our day becomes easier.”
Somers says he speaks from experience regarding lack of adherence to processes.
“There were times in my life when I tried to change principles for my personal situation,” he says. “I’ve learned some incredible lessons here, and they weren’t always easy lessons — there was some humiliation involved. But working for Volt and Alan has made me a better man. It’s taught me to not look negatively on things, to not look negatively on people … people are awesome, and if you take care of them, they’ll take care of you.”