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Paying People What They Are Worth - Episode 18 · Profit and Principle

0:00
SPEAKER_00: I want to read you a sentence from Scripture that most business owners have never heard in the context of how they pay their team.
0:09
SPEAKER_00: It's from the book of James, and it's not gentle.
0:12
SPEAKER_00: It says this Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts.
0:28
SPEAKER_00: The wages are crying out.
0:30
SPEAKER_00: Not the workers, but the wages themselves.
0:34
SPEAKER_00: The money that should have been paid and wasn't has its own voice before God.
0:40
SPEAKER_00: And the Lord of hosts, the God of angels' armies, the God of decisive power, has heard it.
0:48
SPEAKER_00: Now I'm not going to stand here and tell you that every business owner who has ever made a difficult compensation decision is guilty of fraud before God.
0:58
SPEAKER_00: The world is more complicated than that.
1:01
SPEAKER_00: And this episode is not a political speech about wages.
1:05
SPEAKER_00: But I am going to tell you that James is addressing something real and specific, and that's this: the business owner who has the ability to pay their people fairly and has chosen not to, who knows, on some level that the compensation is not right, and has made peace with that through a combination of market comparisons, margin justifications, and the quiet assumption that the employee doesn't know that they could be getting something better somewhere else.
1:38
SPEAKER_00: This episode is about that, about what Scripture says when it comes to the compensation question.
1:45
SPEAKER_00: And it turns out that Scripture has quite a lot to say, and it says it with unusual directness.
1:52
SPEAKER_00: I'm Daryl, and this is Profit and Principle.
1:55
SPEAKER_00: We're going to look at three different passages today and a two-part practice for leaders who want to know whether their compensation decisions are in the right place and what to do if they're not.
2:08
SPEAKER_00: So why does this matter in business?
2:11
SPEAKER_00: Let me make the business case first because for some leaders that's the case that will actually be heard.
2:19
SPEAKER_00: Compensation is the most direct communication your business makes to its people about what you think they are worth.
2:27
SPEAKER_00: Everything else you say about values, culture, how much you appreciate your team, it's all measured against the number on the paycheck.
2:37
SPEAKER_00: And if there's a gap between the words and the number, people feel it.
2:42
SPEAKER_00: They don't always say it, but they feel it.
2:45
SPEAKER_00: And that feeling accumulates.
2:48
SPEAKER_00: The business cost of underpaying talent has three recognizable phases.
2:54
SPEAKER_00: The first is invisible performance decline.
2:58
SPEAKER_00: The person who knows they are underpaid does not immediately resign.
3:03
SPEAKER_00: They recalibrate.
3:05
SPEAKER_00: They give the amount of effort that the compensation signals is expected of them.
3:10
SPEAKER_00: The discretionary performance, the extra mile, the creative solution, the initiative that nobody asks for, well, all those quietly stop.
3:22
SPEAKER_00: You don't see it as clearly as resignation, but it costs you as much.
3:27
SPEAKER_00: The second phase is the retention tax.
3:31
SPEAKER_00: Every time a key person leaves for better compensation somewhere else, you pay to recruit their replacement, to train them, to wait out the months before they are fully productive.
3:43
SPEAKER_00: Studies consistently put the total cost of replacing a skilled employee at somewhere between 50 and 200% of their annual salary, depending on the role.
3:54
SPEAKER_00: The business that underpays does not save money.
3:59
SPEAKER_00: It defers the cost and pays it back with interest in recruiting fees and lost institutional knowledge and the disruption that every departure produces.
4:10
SPEAKER_00: The third phase is the reputation effect.
4:13
SPEAKER_00: Word travels.
4:15
SPEAKER_00: The business that is known in its industry or region as a place that underpays employees becomes the place where people go when they can't get hired somewhere else.
4:25
SPEAKER_00: Over time, that shapes the quality of the candidate pool in ways that compound negatively for years.
4:33
SPEAKER_00: The compensation decisions you make today are building a reputation that will either attract or repel talent for the next decade.
4:42
SPEAKER_00: That's the business case.
4:44
SPEAKER_00: Now, here's the one Scripture adds.
4:47
SPEAKER_00: This is also a justice issue.
4:50
SPEAKER_00: And the justice dimension doesn't go away when the business case is inconvenient.
4:56
SPEAKER_00: So let's see what Scripture says.
4:58
SPEAKER_00: We're going to be in James chapter 5, verse 4.
5:01
SPEAKER_00: And we started out with this, let's repeat it again.
5:05
SPEAKER_00: Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts.
5:19
SPEAKER_00: James is writing into a community that included wealthy landowners who were exploiting their workers.
5:25
SPEAKER_00: They were withholding wages, delaying payment, and using the power differential between employer and laborer to pay less than was owed.
5:36
SPEAKER_00: His language is among the most confrontational in the New Testament.
5:42
SPEAKER_00: The phrase kept back by fraud, he's basically saying that you're robbing them, you're defrauding them, you're depriving something that belongs to them rightfully.
5:54
SPEAKER_00: James is not describing a benign cost management decision.
5:58
SPEAKER_00: He's describing theft.
6:00
SPEAKER_00: The worker did the work, the compensation is owed, and withholding it is not a financial strategy.
6:08
SPEAKER_00: It's taking what belongs to someone else.
6:11
SPEAKER_00: Now, what makes the passage extraordinary is the image James uses.
6:17
SPEAKER_00: The wages themselves are crying out.
6:21
SPEAKER_00: Now, the word he uses here for crying out, it's the same word used in the Psalms for the desperate cry of the afflicted calling on God.
6:31
SPEAKER_00: James is saying that the moral weight of unpaid wages creates its own voice before God, that the injustice is not invisible, it's not overlooked, it's not deferred for some later accounting.
6:45
SPEAKER_00: It's already been heard by the Lord of hosts, the God of decisive martialed power.
6:53
SPEAKER_00: For the business leader, the question this passage puts on the table is not, am I paying the minimum required by law, or am I paying market rate?
7:04
SPEAKER_00: The question is, are the wages that I am paying an accurate reflection of the value the person is producing, or am I withholding what rightfully belongs to them because I have the power to do so?
7:18
SPEAKER_00: Those are different questions.
7:20
SPEAKER_00: And God, James says, knows the difference.
7:24
SPEAKER_00: Now let's go back to the Old Testament and let's look at Leviticus chapter 19, verse 13.
7:30
SPEAKER_00: And it says this, you shall not oppress your neighbor or rob him.
7:34
SPEAKER_00: The wages of a hired worker shall not remain with you all night until the morning.
7:41
SPEAKER_00: This command appears in the Holiness Code of Leviticus, the same section that contains the command to use just weights and accurate measures, which we covered in episode nine.
7:53
SPEAKER_00: God is building a picture of what a just economic community looks like, and compensation is part of it.
8:01
SPEAKER_00: The specific instruction is striking in its immediacy.
8:05
SPEAKER_00: Wages shall not remain with you all night until the morning.
8:09
SPEAKER_00: In the ancient context, day laborers depended on daily payment to purchase food for their families that evening.
8:17
SPEAKER_00: To withhold payment until the next day was not a minor administrative inconvenience.
8:22
SPEAKER_00: It was a decision that couldn't mean someone went to bed hungry.
8:27
SPEAKER_00: The Hebrew word behind oppress is a word that carries a sense of squeezing, of applying pressure through power.
8:37
SPEAKER_00: The command is not merely pay our workers eventually, it's pay them promptly and fully, without using your position of power to delay or diminish what is owed.
8:50
SPEAKER_00: The application for the modern business leader is direct.
8:54
SPEAKER_00: Your team members have bills that arrive on schedule regardless of when you decide to process compensation.
9:02
SPEAKER_00: The business that consistently delays payroll, who holds back bonuses that have been earned, or defers salary adjustments while the leader takes distributions, is doing something that Leviticus names clearly.
9:17
SPEAKER_00: It is oppression through the use of economic power.
9:21
SPEAKER_00: Now that's a pretty strong statement, but this is exactly what Scripture says.
9:27
SPEAKER_00: Now let's take a look at 1 Timothy 5, 18.
9:31
SPEAKER_00: And Paul writes this for the scripture says, You shall not muzzle an ox when it treads out the grain, and the worker deserves his wages.
9:42
SPEAKER_00: Paul is writing to Timothy about the compensation of elders who lead well, but his argument rests on a principle he quotes as scripture, and he draws this from Deuteronomy chapter twenty five, verse four, and almost certainly from Jesus himself in Luke ten.
10:00
SPEAKER_00: The worker deserves his wages.
10:03
SPEAKER_00: The Greek word translated deserves means worthy.
10:08
SPEAKER_00: It corresponds to the value of something.
10:11
SPEAKER_00: It's the word used when something matches its counterpart, when the payment corresponds accurately to the work performed.
10:20
SPEAKER_00: The worker deserves the wages the way a gram of gold deserves to be called a gram of gold.
10:30
SPEAKER_00: It's not a favor, it's generosity.
10:34
SPEAKER_00: It's the accurate correspondence between labor rendered and compensation paid.
10:40
SPEAKER_00: The ox illustration Paul borrows from Deuteronomy makes the same point through the back door.
10:47
SPEAKER_00: An ox working the grain should be able to eat from what it produces, to share proportionately in the fruit of its labor.
10:55
SPEAKER_00: To muzzle it is to extract the work while denying the workers access to the value they created.
11:02
SPEAKER_00: Paul says, don't do that to people.
11:05
SPEAKER_00: The one who produces deserves to participate in what they produce.
11:10
SPEAKER_00: That word deserves is the word that most compensation conversations never use.
11:17
SPEAKER_00: We talk about what the market will bear, about what we can afford, about what keeps people in the range.
11:25
SPEAKER_00: Paul says, talk about what is deserved, because the deserved number is the number that corresponds to the actual value the person is contributing.
11:36
SPEAKER_00: And if there is a significant gap between that number and what you're paying, you have a problem that is not merely financial.
11:45
SPEAKER_00: I want to give you a scenario that I think most experienced business owners will recognize.
11:50
SPEAKER_00: Not the dramatic case of exploitation, but the quiet, normalized version that lives in a lot of healthy-looking businesses.
12:00
SPEAKER_00: A professional services firm, I'll call the founder Diane, well that firm had built something genuinely good over 12 years.
12:10
SPEAKER_00: Strong client relationships, a reputation for quality, and a team that had been together a long time.
12:17
SPEAKER_00: The team's longevity was something Diane pointed to with pride, but what she had not examined carefully was why people stayed.
12:26
SPEAKER_00: A consultant named Will had been with the firm for seven years.
12:30
SPEAKER_00: He was, by any honest assessment, the firm's best technical mind.
12:35
SPEAKER_00: He led the most complex engagements.
12:38
SPEAKER_00: He trained the junior staff.
12:41
SPEAKER_00: And also Will was the person that clients asked for by name.
12:45
SPEAKER_00: His salary had been adjusted modestly over the years.
12:49
SPEAKER_00: He was given cost of living increases, a few small merit bumps, but it had never been reset against what someone with his skills and track record commanded in the market.
13:03
SPEAKER_00: Because Diane had never done that analysis.
13:06
SPEAKER_00: And Will had never pushed because he valued the team and work and flexibility the firm offered.
13:13
SPEAKER_00: But one morning Will gave his notice.
13:15
SPEAKER_00: He had been recruited by a competitor and accepted an offer that was forty percent higher than what Diane was paying him.
13:23
SPEAKER_00: Diane was stunned.
13:25
SPEAKER_00: She made a counteroffer.
13:28
SPEAKER_00: Will graciously but clearly told her something that stayed with her.
13:32
SPEAKER_00: I'm not leaving because he offered more money.
13:35
SPEAKER_00: I'm leaving because when I saw that number, I realized what my work had been worth to you this whole time, and what you'd been willing to let me not know.
13:47
SPEAKER_00: The wage that had been kept back had found its voice.
13:50
SPEAKER_00: Diane lost not just Will but three clients who followed him and spent the next eighteen months trying to rebuild what she'd spent twelve years growing.
14:00
SPEAKER_00: The cost was not the 40% she hadn't paid.
14:03
SPEAKER_00: The cost was everything that came after.
14:07
SPEAKER_00: So what can you do?
14:09
SPEAKER_00: Well, I have two practices.
14:10
SPEAKER_00: One is diagnostic and one is corrective.
14:13
SPEAKER_00: So let's look at the diagnostic one.
14:16
SPEAKER_00: Do a genuine market compensation audit this week.
14:21
SPEAKER_00: The question that the word deserves asks is whether your compensation is in accurate correspondence to the value being produced.
14:32
SPEAKER_00: You cannot answer that question if you don't know what the market values.
14:36
SPEAKER_00: This week, commit to doing what Diane never did: a genuine current look at what your top performers could be earning at a competitive employer.
14:47
SPEAKER_00: This is not a complicated exercise.
14:50
SPEAKER_00: Use industry salary surveys, recruiting platform data, or simply call a recruiter and ask what your key roles are trading at in your market right now.
15:02
SPEAKER_00: And then study that gap honestly.
15:05
SPEAKER_00: Don't say things like what can I justify?
15:08
SPEAKER_00: Or what will keep them from leaving for another six months?
15:12
SPEAKER_00: Ask this question instead.
15:14
SPEAKER_00: Is what I'm paying in accurate correspondence to what this person is worth and what they are producing?
15:22
SPEAKER_00: If there is a meaningful gap, you already know it at some level.
15:26
SPEAKER_00: The audit just makes it visible and therefore actionable.
15:30
SPEAKER_00: Will's departure was not a surprise in retrospect.
15:34
SPEAKER_00: Diane had simply never forced herself to look.
15:38
SPEAKER_00: Now here's the other action step.
15:40
SPEAKER_00: Address one specific compensation gap before the end of this quarter.
15:45
SPEAKER_00: Naming the gap is the diagnostic.
15:48
SPEAKER_00: Doing something about it is the application.
15:51
SPEAKER_00: Here's what I want you to do this week.
15:54
SPEAKER_00: Identify one person on your team whose compensation is most out of alignment with their contribution and the market.
16:01
SPEAKER_00: That person who, if you're honest, is the biggest gap between what is deserved and what is actual, and commit to a plan to address it before the end of this quarter.
16:13
SPEAKER_00: Now, I'm not saying that you start the next budget cycle, not when cash flow improves, but this quarter.
16:20
SPEAKER_00: Because the command in Leviticus about wages not remaining overnight is making a point about urgency.
16:28
SPEAKER_00: The delay itself is a form of the problem.
16:31
SPEAKER_00: Every quarter you know the gap and do nothing about it is a quarter in which the withheld wages are accumulating their own voice.
16:40
SPEAKER_00: If the gap is genuinely too large to close in one move, be honest about that with the specific person.
16:48
SPEAKER_00: A transparent conversation about where you are, where the target is, and the specific timeline for getting there is far more valuable than a continued silence.
16:59
SPEAKER_00: What damages trust is not the gap itself, it's the sense that the leader knows and doesn't care enough to address it.
17:07
SPEAKER_00: So address it now in this quarter.
17:11
SPEAKER_00: Let me close by connecting this episode to the two that came just before it.
17:17
SPEAKER_00: In episode 17, we talked about generosity, about the open hand, the scattered seed, the business that gives more than it is required to give and builds a different kind of loyalty in return.
17:32
SPEAKER_00: Compensation is the most foundational expression of that generosity in your organization.
17:38
SPEAKER_00: You cannot be genuinely generous with clients and partners while systematically underpaying the team that makes all of it possible.
17:46
SPEAKER_00: The message that sends is not lost on anyone.
17:50
SPEAKER_00: In episode 16, we talked about debt, about the obligations that constrain decision making and narrow options.
17:59
SPEAKER_00: One of the most common reasons business owners give for delaying compensation adjustments is financial constraint.
18:05
SPEAKER_00: And sometimes that's real.
18:08
SPEAKER_00: But sometimes what looks like a financial constraint is actually a capital allocation decision.
18:15
SPEAKER_00: The business has resources, and those resources are being directed toward growth, reserves, or owner compensation rather than toward the people whose labor is generating them.
18:27
SPEAKER_00: That's a stewardship choice.
18:29
SPEAKER_00: And it deserves to be examined honestly against the standard of what is deserved.
18:37
SPEAKER_00: The business that pays its people what they're worth accurately, promptly, and without using a power differential to extract labor at a discount, it's not just being strategically smart.
18:49
SPEAKER_00: It's building the kind of organization that reflects the character of a God who himself is just, who hears the cry of the underpaid, and who takes pleasure in the leader who does not make him listen to it.
19:04
SPEAKER_00: Let me pray for you.
19:06
SPEAKER_00: Father, I pray for every business leader listening who carries the responsibility of setting compensation for the people in their care.
19:14
SPEAKER_00: Give them the courage to ask the honest question.
19:18
SPEAKER_00: Not what will the market let me pay them, but what is deserved.
19:24
SPEAKER_00: Show them where the gap is.
19:26
SPEAKER_00: Give them the will to close it and the wisdom to know how.
19:30
SPEAKER_00: Protect them from the drift of deferring what is just because the timing is never quite right.
19:37
SPEAKER_00: And let their businesses be places where people flourish, where the measure of compensation matches the measure of contribution, and where the wages that are paid have no need to cry out, because they have already been given.
19:50
SPEAKER_00: In Jesus' name, amen.
19:52
SPEAKER_00: Well, thank you for joining us this week.
19:54
SPEAKER_00: I hope you're finding this content valuable.
19:56
SPEAKER_00: And if so, if you'll please uh just leave us a rating and review wherever you listen to this podcast, I would greatly appreciate it.
20:03
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20:09
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20:12
SPEAKER_00: You can also read the latest blog article regarding this episode, and then finally, you can download a free one page PDF resource that is perfect for an individual or small group Bible study that pertains to this particular topic.
20:25
SPEAKER_00: So I hope you'll take advantage of those and hope you'll be back with us next week on Profit and Principle.