Here’s a question that will divide business owners: what would happen if you increased your team’s pay by 10% tomorrow?

For many, the answer is instant. “We can’t afford it.” “We pay minimum wage because that’s what the business can sustain.” “Paying people more won’t make them work harder.”

All reasonable. Wages are one of the biggest costs in any fitness business, and raising them without a guaranteed return feels risky. But maybe we’re asking the wrong question. Rather than “can we afford to pay people more?”, perhaps it’s “can we afford not to?”

The Gravity Payments Example

One of the best-known examples of challenging conventional thinking came from Dan Price, CEO of Gravity Payments in the US. In 2015 he announced the minimum salary in his company would rise to $70,000 a year.

Critics said it would destroy the business. Instead, over the following years the company reported revenue tripling, its customer base doubling, profits rising significantly and staff retention improving dramatically. Employees were also buying homes at far higher rates, which many put down to their improved financial security.

I’m not suggesting gym owners start paying everyone £70,000. I am suggesting we underestimate the commercial value of making people feel genuinely valued.

Money Matters More Than We Admit

People go to work for many reasons: they want to enjoy it, work with good people and feel proud of their employer. But mainly, they go to earn money to pay the mortgage, support their family and enjoy life. So why are we surprised when a good employee leaves for an extra pound an hour?

Instead of promising rewards if targets are hit, what if we invested in the team first? What if we said, “We believe in you enough to increase your earnings, and in return we’d like you to help us grow the business”?

It doesn’t have to be a permanent pay rise. I like the idea of a structured six-month performance bonus linked to clearly defined business objectives. The key difference is that the investment comes first. Instead of asking staff to prove themselves before they’re rewarded, you show you value them from day one, and ask them to help build something bigger.

The Simple Maths

For a full-time employee on minimum wage, a 10% increase costs roughly £260 a month including National Insurance and pension. If your total wage bill is £10,000 a month, you’re looking at about £1,000 extra.

That sounds expensive until you compare it with replacing good people. Recruitment isn’t cheap. Training takes time. New starters are rarely fully productive for months, the member experience often suffers and managers lose hours interviewing and onboarding. Retention isn’t just important for members. It’s just as important for staff.

What if that investment created a happier team who engaged more with members, sold more memberships, retained more clients and took more pride in the business? Suddenly it looks worthwhile.

What About People Who Don’t Deserve It?

There will always be that concern. But if someone still isn’t performing after you’ve invested in them, trained them and given them every chance, you manage their performance as you normally would.

Your best people notice these things. Great people want to work for employers who value them. When success is shared, high performers raise everyone’s standards, and those who won’t contribute either improve or move on. That’s exactly the culture most businesses are trying to build.

Turning Wages Into an Investment

I can imagine HR professionals shaking their heads, and this won’t suit every business. Owners shouldn’t put themselves under pressure they can’t sustain. But there may be another way to think about pay.

Agree a six-month performance bonus linked to measurable growth. If the business grows 5%, the bonus continues for another six months. If growth hits 15% or 20%, the team shares even more of the success they helped create. Wages stop being just an overhead and become an investment in the people driving your business forward.

It’s brave, because the employer takes the first step. But that’s what leaders do. They create belief first, and performance often follows.

Would it work in every business? Probably not. Could it transform the right business with the right team? I think it could.

If investing an extra 10% in your team today could significantly improve morale, retention, sales and performance over the next six months, would you be brave enough to try it?

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Want help putting this into practice in your gym? Black Raccoon Consulting are gym and fitness business consultants with over 25 years’ industry experience in sales, marketing, member retention and operations. Book your free 45-minute business call or explore our services.

Ryan Charlesworth, Founder, Black Raccoon Consulting