Jon Kidwell is a leadership and business coach who helps leaders in mission-driven organizations succeed. This is the final installment of the six-part series devoted to helping you lead, build, care for, and navigate impending issues that will impact the future of your team and your organization. Below, we discuss what not to neglect when addressing the wage crisis.
“That’s nice. I have to deal with the reality that is.”
This is from a leader who is currently paying team members half the average rate of others in their field. They want so badly to pay their team, and themselves, better. This same leader shared they need to earn or raise more money to merely make payroll. Today, if this leader raised the team’s wages it would be irresponsible, quickly leave each of them unemployed and bring an end to their mission-driven service.
That’s a difficult and frightening place to be. And it doesn’t mean we’re all in that place. You may be contemplating increasing salaries, struggling to recruit because you haven’t changed the hourly pay rate while others have. Maybe you’re avoiding it, have already done it, or raised the team’s pay and are wrestling with the increased and unsaid expectations. Wherever you are, we hope this article is helpful.
Not only is it not fixed, but the value of money is also declining – quickly. The U.S. inflation rate went above 7% in February. A 40-year high. If this pace continues, what costs $10 today will cost $20 in 10 years or less. That means a salary of $35,000 would need to be $70,000 to merely keep pace with inflation. That doesn’t even begin to address if $35,000 is a reasonable and fair salary for a full-time exempt leader.
This crisis isn’t as easy as increasing the minimum wage or making a one-time cost of living adjustment. It requires a long-term plan to address what’s happening now and how to keep pace with what the future holds. Don’t choose to neglect the wage crisis, a choice that will forever negatively impact your mission, team and the community you serve.
If you’re fighting to cover payroll you have a more pressing crisis. Work through it, you can do it! Then, come back to this one. Even if you’re not in crisis mode, it doesn’t mean you flip the switch for next week’s payroll. How terrible would it be to do that only to realize you don’t have enough to fund it indefinitely or while you grow to cover the cost? Instead, gather information, examine the market, build a plan, and then proceed with confidence.
While raising prices and cutting costs are options to fund a pay increase, they’re not your only options. There is a powerful case for paying fair wages. And unlike a business, you have the opportunity to raise donations or receive grants to support it. Beyond that, if your organization has a foundation, you could have the foundation invest money over a specified number of years into the team’s salaries and development until it is wholly sustainable and the organization can fund the wages itself.
There are so many variables that impact what might be considered a fair and reasonable wage. Don’t get distracted by the noise or the “you should.” Just because one place pays over $15/hr doesn’t mean you have to. The cost of living in one city versus another varies greatly. However, it is valuable to pay attention to what other employers are paying for similar work. Then, decide where you want to fall in terms of what you pay – low, medium or high end of the spectrum. And remember, oftentimes you get what you pay for.
We’ve all had a job description that listed “things.” Rarely do we have something that describes the results we are responsible for. This helps determine the value a job returns to an organization. Often, our fundraisers have this type of pay structure. They are responsible for raising five or 10 times their income, sometimes more. How might this mentality and structure be used to help scope jobs when it comes to the safety of children, the number of people served, the amount of revenue they are responsible to earn and steward for the organization?
The salary may be what initially draws someone in, or keeps them around, but it’s not the only way to compensate and show appreciation. Above all of the “amenities” we could list, building a healthy culture and sticking to your values will provide a return that money cannot buy. After that and as you decide on wages, find ways to give people what they need, want and what aligns with your culture and values. A great place to start may be “What do we preach or promote for others we are not yet doing for ourselves and our team?”
This isn’t merely a shameless plug to go back and read the other five articles in “The Neglected Community” series. It is a warning about addressing pay or increasing salaries without also building a unified team, getting clear on the expectations and results, and focusing on excellent mission-driven service. While raising the pay for valued and performing team members will only increase their drive and passion, if we raise the pay for underperforming team members without addressing the issues, we not only incentivize them to stay, but it is demoralizing to the rest of the team. If all that is done is changing someone’s hourly rate sooner than later, this crisis – or another internal crisis – will flare up because of underlying issues.
In a mission-driven organization, money has one purpose: to further the mission. We do that by reinvesting in the mission itself, its people, our strategy(ies) and the services we provide. Where do you see the greatest return on investment to further the mission? The reality is that it costs more today than it did yesterday to run the organization. Neglecting this fact won’t solve anything, or serve the mission. But addressing it head-on, openly and honestly with your mission-driven team just might.
To conclude the series, it’s been a challenging few years. It’s likely not over and not the last crisis. However, this one – the internal crisis you face with the team you lead – you can influence. You can change its course, its impact and the outcome. Each of us, every member of your team, needs five things: community, clarity, dignity, security and authority. Focus on addressing these things and serving them well through them. When you do your team will continue to follow where you lead – to serve communities well.
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