Saying you hire at fair wages is just another way of saying you’ve set them “as cheap as you can go,” Bruce Merrifield of Merrifield Consulting Group said, speaking at the distribution-focused Advanced Profit Improvement Conference last week.

In order for things to work out well in a business, you have to have great people. But in order to expect the most from employees and to get the most from them, you have to pay the most, Merrifield said.

That doesn't mean you should pay all your current employees more; not all of them will be willing or able to meet the higher expectations that come with higher pay. Instead, distributors can eliminate any “salary-sucking coasters” from their sales forces and use those dollars to increase incentives for those who remain, Merrifield says.

Merrifield said distributors who hire slowly and carefully, reward high performers generously and quickly terminate employees who are just coasting along will end up with the “fewer better folks” needed to run the business well.

Read more about hiring in distribution in the recent issue of MDM Premium: The Hiring Disconnect in Distribution.