Latest / The SmallBizChat with Melinda Emerson / Compensation and Your Small Business

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Compensation and Your Small Business · The SmallBizChat with Melinda Emerson

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  3, 2, 1, 0, ignition.
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  Lift off.
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  Ending small business failure.
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  Welcome to the small biz chat podcast with the number 1 small business spurt, Melinda Emerson.
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  Melinda's goal is to end small business failure, and she'll give you the information
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  you to succeed and live the life you dream of.
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  Now here's your host, the small biz chat lady herself, Melinda Emerson.
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  Everybody.
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  This is Melinda Emerson.
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  This is Melinda Emerson.
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  Welcome to another episode of the small Bishop podcast.
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  Today's a little podcast.
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  Is all about compensation, you know, as a small business owner, we don't think about
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  compensation, but I don't know about you.
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  But late last year, one of my best employees got poached by a major corporation, and they
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  threw so much money at her that I the only thing I could say to her was was go with god.
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  I love you dearly.
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  But I could not possibly compete.
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  And it made me think that some of you out there may be going through the same kind of things if
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  you have employees.
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  So I really kinda wanna talk a little bit today about just, like, compensation trends and stuff
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  we need to be on the lookout for so that we could try to keep our employees because you
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  guys know you have got to get to the point where you've got some other people thinking
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  about how your business makes money other than you.
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  If are going to stay in business.
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  So I recently, moderated, you know, for ink magazine on this, and it made me think You know
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  what?
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  I think everybody might need to pay closer attention to some of this stuff.
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  So because really, compensation planning is, like, critical.
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  In a regular labor market, but especially now as we're experiencing, like, so many
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  fundamental changes in workforce trend, And there's, like, an accelerated shift to hybrid
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  workforce.
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  Right?
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  44% of workers are now saying they want a hybrid model.
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  Like, if you don't wanna work from home, they are leaving.
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  And we know forty thousand people decided to leave their corporate jobs last week in, excuse
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  me, last year.
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  And many of them have come to the dark side of entrepreneurship, and I hope that lord hope
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  they bought my book become your own boss in 12 months since I designed it just for them to
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  make that transition from having a job to starting a business, but For those of us that
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  are trying to keep our employees, I think it's really important that we really understand what
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  workers want, and they want a hybrid model They want flexibility, and they want equitable pay.
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  And I think that we, as small business owners, sometimes I think We pay what we think we can
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  afford, and we don't necessarily go and check what the going rate is for that job.
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  And I think that if you wanna stay competitive, number 1, you've gotta engage your workers in
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  what it is they want.
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  Right?
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  We've gotta find out what our employees love language is so that we can meet it.
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  But we also just really need to understand you know, what the market is paying.
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  And so there's obviously, you're not gonna compete with a fortune 500 company but you
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  better have some kind of, you know, rewards or benefits or, you know, profit sharing, health
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  care, something, you've gotta figure out something that you're gonna be offering, to
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  stay competitive.
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  And so I think that you know, clearly, the the trend we've seen is people, you know, wanna
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  work from home.
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  People want flexibility, and people, you know, wanna be paid well.
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  And I think even frontline workers that, you know, used to be, you know, only eligible for a
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  minimum wait.
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  I mean, minimum wage in America is now $14, fifteen an hour.
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  And so you've gotta decide, are you gonna be above that?
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  Are you gonna pay $18 an hour for frontline workers?
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  You know, all those things are things you've gotta think about.
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  But I think it's worth thinking about because you've gotta try to keep your employees.
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  And nowadays, a core employee has been with you 2 years.
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  And you don't wanna lose any core employees because sometimes it takes 3 to 6 months for
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  somebody to actually learn your job.
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  So the last thing you want is somebody to be out here looking for another job because
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  they're dissatisfied, but you wanna make sure that you are offering something that might not
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  be corporate, but at least is competitive.
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  So, you know, you've gotta you've gotta think about that, but I also think in addition to,
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  you know, allowing people to do remote work, I think some of us gotta think about things like
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  you know, summer Fridays and letting people work, you know, 4:10 hour days so they can be
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  awful on Fridays and things like that.
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  I think you know, if people do really good work, maybe give project based bonuses, right,
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  instead of giving a bonus that's gonna tie you, you know, into a financial commitment long
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  term, maybe you do, you know, I'm I'm a big believer in Amazon gift card.
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  Right?
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  I love to surprise my team with, $200, $250 Amazon gift cards when we work really, really
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  hard and get something done.
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  And so I definitely, think that some of those kinds of things are really good if you kinda
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  wanna position yourself to be competitive and just make people feel appreciated.
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  I mean, I think a lot of it is you know, making people be seen acknowledging, you know, team
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  members in front of the rest of the team That kind of stuff is really important because you
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  wanna make sure that you're supporting them and that you're speaking their love language.
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  Right?
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  So just like you would think about with your sweeties, lovely, just is is is it acts of
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  service?
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  Is it gifts?
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  Is it, you know, some people want recognition?
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  Some people want time off.
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  Some people want more responsibility.
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  You know, I think some people want a closer parking spot.
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  Right?
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  You know, it's a wintertime.
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  I I'm located in the northeast.
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  When it's snowing, if you still have people coming to an office, you know, a premium office
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  space or or a premium parking space really could be really good compensation for someone.
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  So I think it's about talking to your employees, surveying your employees and making
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  it a psychological safe environment for people to give you their feedback because we all know
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  People do not leave jobs.
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  They lead people.
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  And culture eats strategy for breakfast every single So if your culture is bad, if there's a
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  bunch of back biting, if people are overly competitive, you know, or every time you have a
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  staff meeting, you're, you know, you're pressing grumpy and you go around the the room
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  and, you know, where are you with your projects?
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  Where are you with your projects?
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  Like, that kind of stuff.
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  People people don't have to take that.
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  And I really think that, in today's environment, you know, in aft after kind of I
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  don't wanna say surviving the pandemic because, like, it seems like it won't go away, but I
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  think the pandemic made a lot of people assess their work and the value of their work versus
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  their life.
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  And I think that, you know, people are just not willing to overwork anymore.
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  And they're certainly not willing to do it without being extremely well compensated.
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  So I think that as small business owners, a lot of us have cultures work hauls, right?
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  We have cultures of, you know, 10, 12 hour a day.
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  And I think we've gotta think about how we can manage our schedules better so people don't
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  have to work like that.
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  Or, you know, what can we do to compensate people But know that your compensation is like
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  part of your culture.
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  So, I think that the other thing you wanna figure out is how you can be more transparent.
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  With how you're compensating or what your compensation strategy is.
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  And I think that's really, really important.
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  You definitely want to be able to compensate your highest performing, employees, but you
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  don't wanna do that to the detriment of your long term employees.
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  You know, you kinda wanna make sure that, let's say, if you're giving a 2% increase maybe you
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  keep your high performer or 4% or 5% increase, but you don't wanna make it that, like, the
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  existing workers get nothing in this superstar employees getting, like, all the perks because
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  then you just create crabs in a battle, barrel, and then people won't work together as a team.
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  And I think at the end of the day, it's got to be about teamwork.
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  Right?
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  What do we say teamwork makes the dream work?
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  And so we wanna make sure that we are supporting employees the best way we possibly
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  can.
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  And that starts with good communication.
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  That starts with you know, psychological safety and allowing people to come to you and share
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  what's on their mind.
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  Now you don't obviously wanna, you know, entertain every grievance, but you do wanna pay
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  attention to it and then do a survey to see if other people feel that way.
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  Or if you have a small enough team, I mean, the average small business owner in America has
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  four people.
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  You know, I have seven people on my team.
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  So you kinda have to reach around and make sure that everybody is, you know, not everybody
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  talks up in a meeting.
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  So maybe you call that person and have a one on one conversation if everybody's working
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  remotely, but Just make sure you get everybody's input.
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  You know, there's always a dominant player who wants to make sure everybody knows what they
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  think.
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  But then there's other people that are more introverted who aren't gonna speak So talk to
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  your team and maybe do things even in a remote environment where you guys can bond.
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  Like, maybe you buy some books and mail them to everybody on the team.
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  And you guys have, an afternoon where you talk about the book a month later or something like
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  that.
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  But, you know, surprise them with a great book.
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  You know, don't make it feel like homework.
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  Make it feel fun.
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  And that's something that you can do.
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  Or maybe say once a year, they can invest in 1 course, you know, to upskill themselves.
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  There's all kinds of things you can do to support your team, but I think you guys, we
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  have got to start focusing on our people because people help you grow your business.
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  You cannot grow your business with only your 2 hands.
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  As a matter of fact, as a business owner, you wanna get the point where you are doing
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  strategy and planning and the execution is being done by other people.
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  If you're still involved in execution in your business, then you gotta look at how you're
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  running your business.
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  You should not be involved in execution.
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  You should be involved in direction.
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  Strategy, you know, strategic meetings with new potential clients or, you know, choosing
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  existing clients to keep your contracts and things like that.
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  You don't wanna be doing, you know, work or be work.
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  But if you don't take care of your worker bees, you will be doing work or be work.
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  So I just wanna encourage everybody to just pay attention to, the compensation trends out
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  there, you know, at least every 6 months.
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  Look at what's going on in the marketplace.
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  You don't wanna get surprised by one of your star employees getting poached, and it's
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  because you didn't pay enough attention to your employees to make sure that you were meeting
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  their needs, even if it wasn't with money, is there something else you can do to meet their
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  needs?
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  And so I just wanna give you guys that cautionary tale because like I said, At the
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  beginning of this story, my number one salesperson got poached by a major corporation
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  in December.
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  And that hurt.
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  Now the great thing is is that she helped me hire someone else to replace her before she
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  left, which is awesome, but that just saves to you what our relationship is and how well we
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  got along.
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  She didn't wanna leave me in a merge, but this was a great opportunity.
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  And I was happy for her but you don't want people to be able to pick off your best
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  employees that you've poured into and that you've trained and that you have a well oil
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  machine in your business.
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  So pay attention to compensation.
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  Pay attention to the other things you can do other than money to support your employees And
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  then work on your leadership and your communication style because the more you can
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  manage your employees' expectations, the more they won't gossip or wonder or whisper about
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  what's going on.
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  Just tell them.
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  Be transparent as transparent as you can.
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  About your revenues and what they get paid.
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  And that way, everybody will know what's going on, and they'll be more bought in.
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  So with that, I will just encourage you to get your compensation strategy together.
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  I'm one of the Emerson's small business lady, and you've been listening to the small fish
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  podcast.
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  Thank you.
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  Thanks for listening to the Small Biz chat podcast with Melinda Emerson.
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  Subscribe to this podcast wherever you listen to podcasts and join us next Wednesday for more
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  fantastic information and interviews.
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  You can find more sources and small business success strategies by visiting Melinda's
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  website succeed as your own boss.com.
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  Thanks again for listening, and we'll see you next week.