--First, if a company offers a higher, better wage than other companies, they will attract better employees. They will attract employees who are more experienced, who have more and better education and who, frankly, have better manners. These are no small things. The benefits of those, alone, to the company are great. The company gets that better employee, then may have to, likely, train them less because they already have both the knowledge and experience needed, so the company reduces costs and expenses already.
--Second, with a better, higher wage, the company can KEEP that better employee, those better employees. The cost savings here are, again, huge, and many. With keeping that employee, instead of having high turnover in the company, the company can cut the costs of advertising for new employees--no small thing---and the company can also reduce the costs of constantly training new employees since fewer people needed to do the work are going out the door. These are, again, huge costs cut and so, much more money can go to either growing business or straight to the bottom line, straight to profit and profits, the goal of all companies.
--Third, better, retained employees create a far better experience for the customers. With a better, more experienced, more educated, even more mature, more well-adjusted employee, one that is also retained, the experience for the customer is far more consistent and projects more and better just what, exactly, the company is about. This employee, these employees project the company culture and rules far better. There is far better and greater consistency for the customer and their experience with the customer. This ensures things are done right, the first time, and far more ensures that the customer will stay with the company but that they will also far more likely grow with the company and then that they will also help the company grow by seeing to it others come to the company. With their good and positive experience, they're far more likely to recommend the company to others. This helps to ensure growth, clearly.
These are just three quick but great reasons and examples of how a better paid employee creates a better company, a better company experience and so, finally, a more profitable company.
Companies that only look at the costs of employees and not the benefits, not looking at how a good employee, better paid, can actually help the company and help the company grow and help the company's profit and profits is a foolish, short-sighted company, for sure.
In employees, as with all products, the age old saying is also true here:
You get what you pay for.
And you pay for what you get.
Companies can't get or keep employees, good employees, if those employees can't afford, literally, to work there.