The two ideas can coexist. One should agree to meet one's financial obligations to one's employees if one agreed to pay them a living wage. Doing otherwise would be unethical. Profitability should come second to one's morality.
One should also consider the cost of constantly hiring new employees. Employees who are not fairly compensated will look elsewhere for employment. The employer would then have to expend resources to find another employee and train them to do the job. It would be unreasonable to expect a new employee to be as good at a job as someone who had prior experience with the company. If compensation does not improve in terms of salary, benefits, or both, the company will experience constant turnover, which will eat into the profits.
While one's morality should be of primary importance, there are also practical reasons to compensate employees with a living wage. Employees should be motivated to work and not encouraged to look elsewhere for higher wages.
A profitable business is one that succeeds in making some gains after deducting all the expenses required to run the business. Employees comprise one the most important components of a business. With this in mind, balancing profitability and keeping employees happy go hand in hand.
If a business becomes too focused on profitability, it can compromise business ethics and values by cutting the cost of production, underpaying staff, or overlooking customer satisfaction. This would naturally lead to internal and external conflicts. Internal conflicts would arise from unhappy staff if the business is suddenly unable to pay them a living wage. The unhappy staff could easily start sabotaging the business, which would affect the products and services offered, and the customers' willingness to remain loyal. Customers could in turn move their business elsewhere, or sue the business for offering unsatisfactory products or services.
To avoid any conflicts between profitability and paying staff a living wage, a good business will invest in a strategy and plan that balances these two components without affecting the quality of the products and services.
In the service industry, keeping this balance is even more critical as the staff serve as the face of the business. A happy and satisfied staff will treat the customers well, which leads to repeat business and increased profitability. A business that is committed to paying its staff well is likely to have invested in a holistic and balanced business strategy that weighs in all the aspects of a good business.
There is not a conflict between earning potential and paying employees. When examining the ethical implications of overhead, the moral choice should be determined prior to payment. The moral choice to pay employees an established salary overrides any contentions of earning potential conflict.
In simple terms, it would unethical to pay employees less than a "living wage." Therefore being as profitable as possible includes that wage as standard. It would not be possible to be more profitable, because it would violate a moral standard already established. This argument relies on the assumption the organization has established a moral standard of operation. When such a standard is set, then all decisions must conform to it, which eliminates conflict.
If an organization does not set a moral standard, then there cannot be a conflict because there is no standard for comparison. An organization that maximizes profit over worker pay has determined the moral implications do not factor into the decision-making process. Therefore, no conflict exists because the company has made its intentions plain.
Conflict will only arise when there is a disparity between what the organization has stated or agreed to do and its actions. If the company has made the moral choice to pay workers a "living wage" but is underpaying them to maximize profit, then the company is violating its moral obligation. Since the organization is in violation of a moral foundation, profits should be reduced to erase the conflict and everyone involved should be in agreement to make that happen.
https://business-ethics.com/2015/08/03/0830-its-not-easy-the-challenge-of-paying-employees-a-70000-minimum-salary/
https://www.jblearning.com/pagenotfound
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