Economic Security = Engaged Employees

There are six components we've identified of an effective workplace, including everything from work-life fit to a climate of respect. But there's one that often gets overlooked -- economic security.

You can try and create the best place to work, but if your employees can't make ends meet those efforts won't work as well as you'd like.

Today, President Obama is on a road trip to Michigan and at the top of his agenda is getting the word out about raising the minimum wage, from $7.25 to $10.10 an hour.

His administration is focused on the issue, said Tom Perez, the U.S. Department of Labor in a meeting at his office I attended Tuesday to discuss what can be done to help women and their families. (This is my Secretary Selfie to the right.)

"You often hear it can't be done, but it can be done," he said, adding, "the drum beat will continue. This is about raising people's wages." Given that the majority of minimum-wage earners are women, he pointed out, raising the minimum would go a long way in helping women.

It's unclear whether legislation raising the minimum wage on a national level any time soon, but Perez is hoping employers also take it upon themselves to boost pay.

So what's the business case for raising people's wages?

"If you're anxious and worried about whether or not you have enough money to pay rent, or child care, or bus fare, you're not going to pay as much attention to your job," maintained Ken Matos, director of research for Families and Work Institute.

A financially unstable workforce, he continued, "is a more unpredictable workforce, due to higher absenteeism and turnover. Economically insecure employees can be late to work not because they are irresponsible but because they can't afford to get reasonable child care or have their car fixed."

Economic insecurity can create an atmosphere where employees are frequently turning over in pursuit of relatively small wage increases to get a bit more financial confidence, he noted.

Research from the Institute found that economic security is the top factor when it comes to greater job satisfaction and the probability of retention.

For some organizations, the business strategy fully accounts for the relative costs of absenteeism, turnover and wages. These companies make conscious and well-informed choices about whether their bottom-line benefits more from paying higher wages or absorbing the absenteeism and turnover associated with low wages.

However, too many organizations don't actually track absenteeism and turnover costs. As a result they can become overly focused on reducing the very visible cost of wages while inflating absenteeism and turnover. They then look to their high turnover and absenteeism rates among low wage workers and assume that is a sign that those employees are simply less reliable and therefore deserve lower wages.

Too rarely does it occur to them that this stereotype of low-wage employees is partly because it's hard to be emotionally engaged with an employer and a job that don't pay enough to cover basic bills, like rent or food.