This Is Woman's Work with Nicole Kalil - 162 / Compensation Myths with Kelli Thompson

Episode Date: November 1, 2023

We’re going to talk about some of the big compensation myths that might be holding YOU back and share some alternative approaches. I’ve invited Kelli Thompson back to the show, as she shares my passion for confidence, and is focused specifically on how confidence impacts your paycheck. She has coached and trained hundreds of women to trust themselves, lead, and create a career they love. She is the founder of the Clarity & Confidence Women’s Leadership Program, a Stevie Award winner for Women in Business—Coach of the Year, and the author of Closing The Confidence Gap: Boost Your Peace, Your Potential & Your Paycheck. Determining your compensation almost ALWAYS involves more than just one perspective. It’s a discussion, a negotiation, an agreement.  But ADVOCATING for what you believe you’re worth just takes YOU. Like what you heard? Please rate and review by clicking here.  Join Nicole’s pod (to get all the inside scoops, free stuff, and the occasional rant), click here Connect with Kelli and Resources: Website: www.kelliraethompson.com  Book: closingtheconfidencegap.com/book

Thank you so much for joining us. When your compensation is representative of the value you provide, when you feel recognized and rewarded for your hard work, well, that's pretty freaking awesome. And far too many of us are not experiencing that feeling. Make no mistake, the wage gap and equitable compensation is a complex topic that can't be solved in just one way or from just one perspective. Let me put it to you like this. The vast majority of the employees that I talk to think they should be making more money than they do. And yet, so many of the business owners or leaders that I talk to are frustrated with underperformers or employees who lack initiative or things falling through the cracks, not to

mention managing all of the expenses related to running their business or their division. And they believe that they're paying some of their employees far too much, which brings me to what I believe is a big part of the problem and maybe our greatest opportunity. It's this. We're looking at our compensation from just one lens, and that's ours. Employees think they should be getting paid for being a great employee, but they don't define being a great employee the same way their employers do, and often don't see the big picture or don't think the same way that business owners do. And employers think their employees should perform better, but aren't doing

a very good job of defining expectations or sharing how employees can earn increased compensation or having a process that forces them to evaluate compensation in a fair and consistent way. So this episode is for both the employee and the employer and really everyone in between. We're going to talk about some of these big compensation myths that are holding you back and share some alternative approaches and perspectives. I've invited Kelly Thompson back to the show as she shares my passion for confidence and is focused specifically on how confidence impacts your paycheck. Kelly is a women's leadership coach and speaker who helps women advance to the rooms where

decisions are being made. She has coached and trained hundreds of women to trust themselves, to lead, and to create the career they love. She's the founder of the Clarity and Confidence Women's Leadership Program and a Stevie Award winner for Women in Business Coach of the Year. And last but certainly not least, she's the author of Closing the Confidence Gap, Boost Your Peace, Your Potential, and Your Paycheck. Kelly, welcome back to the show. I'm super excited to talk about compensation and money because it's such a big thing for

all of us, but especially women. Yeah, me too. You know, one of the things I wrote about in my book was, you know, when I was little growing up, I wanted to be a meteorologist. I wanted to be the weather girl on the TV from like the time I was five. I could tell you about all the cloud formations and all of it. I went to college and my major was meteorology. And then I realized, oh, you have to work the six and 10 o'clock news every night. I'm like, I don't want to do that. So I went into banking and then ultimately HR and recruiting. And then I was leading people and I was spending my whole time talking and negotiating about money. And I kind of just made this connection that I went from like this career choice, which is the safest thing to talk

about, which is the weather to this career choice choice where I talk about one of the hardest things there is to talk about, and that's money. And as I wrote in my book, I'm like, for women, I want to make talking about money as easy as talking about the weather. So I hope that's really what we can just have a conversation about today. So I'm excited. I love that so much. And I know from personal experience, going from employee to employer to entrepreneur, some of these beliefs or fears have followed me through all of it. And I think it's worth a conversation. of the myths that you share in your book, I want to start with one that I see very often when I speak to employees and still experience to this day. And it's this belief of if I do a great job, if I knock it out of the park, someone will recognize it. Whoever's paying me will recognize it and they'll come along and offer me more money without me ever having to bring it up. So there's this myth out there that it's rude to ask or rude to talk about money.

Let's talk about that. Yeah. Let's unpack that from the individual perspective. And then I'm going to talk about it from the employer perspective. So, you know, I think one of the things, especially as women is we sometimes are brought up with different money messages than men. So while it might be very normal for the males in your family to talk about the bills, to talk about money, to talk about income, to talk about providing, you know, when it comes to women, especially of my generation, and I think we have to set context that in my mother's generation, she couldn't even borrow money in her own name until she was married in 1976. So this is new, relatively new. And so I think just some of the money messages we got were, it's not polite to talk about money. You shouldn't talk about what people make. It's rude to ask.

Or the ever-present message that women always get, Nicole, you should just be grateful. And we should just kind of accept that as is. And so I think sometimes then that leads into this behavior of, if I just work hard enough, and if I overwork, and if I do all the things, then I just hope that people will notice me and things will happen. But what I can actually tell you from an employer standpoint is that doesn't actually happen. You know, managers are busy. Managers are doing other things. I'm going to give you a big clue. Managers are thinking about their own salaries. Managers are trying to manage a team of 20 people. Managers are so thrilled that you're doing the work and that you must be happy because you're not asking. You know, the same thing that leaders had to think about, and I had to think about as an HR person and a managing leader, is, you know what, when annual review time came, if you were a good employee doing the work, great, I would give you your standard 3% to 4% raise. You know, and the organization oftentimes had many rules about how much we could bump

someone's salary. I know in many organizations, you're only supposed to give between three and 5% at review time, or there's some very unwritten rules. I know in my own organizations and other organizations that we can't give internal employees a raise larger than 15%. So there's all these other things. And so, you know, I think as an employee, we really have to take ownership that, you know, it is our job to advocate for our needs because our manager probably isn't thinking about it. What they're thinking about is everything else that they have to manage. And when performance review time comes, yeah, then they're going to look and say, okay, well, did Nicole exceed expectations? Great. We'll give her 5%. And so, you know, I think, you know, we could wish that our manager was always thinking about it, but I'm always of the belief that as an employee, we need to take ownership of our own career. Well, and I also think too, if we think about the person who is making the decision or paying

the employee, if you're not making any noise, there is that assumption that you're happy. And if they can get away with paying you less, why wouldn't they? I mean, I know it's the right thing to do part of it, but you're right. They have a bazillion other things. There's business expenses.

There's all these things that contribute. And if you're not asking or mentioning anything about it, there could be a little bit of like almost a relief of, oh God, at least I don't have to come up with that money or I don't have to find that in the budget if it's not being brought up. Yeah. And, you know, I think it's just one of those things. People aren't thinking about you as much as you think they are. They're just not thinking about it. So, you know, if you want, if you believe that you have like your role has expanded and maybe you've taken on another team or another department and, you know, objectively looking

at it, you're like, gosh, I'm really just not being compensated for the work that I want. You know, that's when we need to go out and do a little research. There's, you know, with all the pay transparency laws, there's so much opportunity to go out to see what is being paid in your market, in your location. So if you're like me and you're in Nebraska, you're not going to go look at salaries in Silicon Valley. Okay. Two different costs of living. Right. But being smart about it. And I do have a free salary guide on my website that folks can take a look at, but, you know, doing your research and, you know, finding that number and really crafting that ask can be helpful and empowering because yeah, your leader's just not thinking of it. And I know you were saying something about bringing these into entrepreneurship and I mean,

amen, I'm an entrepreneur. And some of these long held lack of confidence messages have, have followed me. I mean, even now I have to quote out my pricing and someone might offer me a pay. Here's our budget. And I still have that message of, oh, that budget is less than my rate. Oh, is it rude to present? You know, we still have to advocate. It's still important that I'm researching what other people in my market are charging so that I'm always kind of staying with, you know, whatever the market rate is. And it's just as important whether you're an employee or you're running your own business. Couldn't agree more.

I also, when you were talking, it hit me how important that negotiation for your initial compensation is. So if you think about the idea that there is a cap, you can only go as much as 15% or people are thinking is it three to 5%. Well, where you're starting is going to play a big part. Also, as we often do as women, we take on increased responsibilities

or we say yes to the projects or the things. How important that starting point is too. Are we asking, does this come with increased compensation or this is going to be an increased workload? How does that factor in with my compensation? Because when we're not having those conversations on the onset, we're putting ourselves a step back from those increases. Yes? Yeah, absolutely. Okay. You know, one of the things that another myth, this is kind of touching on is the whole, you know, let's say I'm changing jobs. And if the offer, or maybe you're even moving jobs within your company and the whole myth is, well, if the offer is more than what I

currently make, I should just say yes. And the answer is no, for two reasons. And I would look at the employee and the employer, you know, first, you know, have you as an, as an employee applying, you know, have you done the market research to make sure that you're being paid fairly? And from the employer's perspective, something that you should know that, you know, quite frankly, I was guilty of as an HR person without even knowing the anchoring bias that I was in, is many states have made it illegal for you to put your previous salary on a job application. And the reason is, is because traditionally women and people of color have been underpaid. So what happens is, is let's say that I'm an employer, which I have been, and I've been an HR person, which I have

been, and we're formulating an offer. And we're saying, oh gosh, okay, when Nicole was making 85 in her last job, you know what? Our pay range is, you know, let's say 75 to 100. But you know, since she was making 80, I bet we could get her for 90, even though maybe we were prepared to pay someone else closer to 100 or what truly is happening in the market is closer to 100 because we have this very unconscious anchoring bias that like, oh, she was only earning 85 or 80. So even if we just give her 85, she's going to be excited and she's going to say yes. And so I think it's just really important for you to go in with your data.

What is the role? What is the market paying? What are my research points? What am I bringing to this role? And I'm so glad that more states are now not allowing that. That way we don't create more anchored offers based on arbitrarily low salaries, because perhaps you were a woman or a person of color who traditionally makes anywhere from 60 to 80% less than a white man. And so that's just another thing to pay attention to. And sometimes I get questions like, well, what if they ask for my salary and I know I've been underpaid? I always tell folks, you know what? Don't lie. It just never sets up anything good. I'm like, be honest, do it in alignment with your values. And when the salary conversation comes, just say, I recognize that perhaps I'm being underpaid in my previous role.

And so the salary that I'm looking for based on my research and my contributions is going to be X, Y, Z dollars. Yeah, I like that. I recognize that I'm being underpaid. It's one of the reasons I'm leaving, right? It's one of the reasons I'm leaving, right? It's one of the reasons I'm looking. And I also think on the hiring side, and I'm with you, I've made this mistake in the past, and I wish I could go back to my younger self and smack myself upside the head. But from the hiring side, go in knowing what the salary range is. And if you find a candidate that you like that is maybe lower on the experience or

education or skillset, then you compensate them on the lower end of that scale. Or if you find somebody who meets all of the qualifications, you're going to pay them on the highest end of that scale. But it's a scale that is based on the role, the responsibilities, your budget, and all of that. Because I agree, I think far too often people go into the hiring phase with the loosest idea of what they're looking for, what they're willing to pay, and it all gets based on who they meet and what they were getting paid prior to coming along. Absolutely. I mean, even as somebody who's an entrepreneur now and a business owner, I've hired help. And one of the first things, maybe this was just my HR brain, was when I was looking to hire that help, I kind of just did a little market research.

What does this help cost, right? What is the range that I should be prepared to pay? And based on this range, what I'm seeing in the market, who tends to get the upper end of this range? Who tends to get the lower end of this range? Well, what skills do I need and where does that put them in the range? And so I think as employers and you know what, I've worked for small like startups and it is so important that even if you are a leader in a small company to reach out for compensation resources. There are so many consulting firms out there, local human resource organizations that can help you make sure that you are pay banding that role fairly. Now, if you're in a large company, my hunch is you probably have some pretty established metrics. Your HR person has compensation bands and ranges and they've done it all. But just know that just because you work for a small company doesn't mean there isn't resources out there for you so that you know, kind of negotiating your rates.

And when somebody comes in with a lower budget, I think about it as a speaker. I know what my rates are as a speaker. And sometimes somebody will come in with a lower budget. But it's not an automatic no, because there are other ways to be compensated. And there are other factors to consider when coming up with a compensation arrangement. So for example, if somebody has a lower budget and they're willing to have me do a virtual speaking engagement, that is a no brainer. I can be much more flexible because I'm not having to leave my family. I'm not having to get on a plane and take so many

hours out of work and so forth and so on. So the myth is that this is all about your rate, whether it's your rate or your salary or your compensation, whatever you want to call it, that it's all about the money you're getting paid. There are other ways to be compensated. Let's talk a little bit about that. Yeah, absolutely. So let's start with the employee and then I'll come back to the whole entrepreneur thing. So I love what you're saying about that. What I tell employees is, you know what? Yes, salary matters. However, for some folks, there are things that are more important salary than salary than we can talk about. And, you know, I've been in that position where I've, you know, maybe done a lateral or even taken a few step back by a few thousand dollars because there

were other things that outweighed it. And those things are this one in some organizations, depending on your level, you can negotiate vacation, you know, and for some people that is really important in some organizations. And again, you're going to need to know and understand the culture. You can negotiate a hybrid or flexible work environment. For some people that I know, they say, I will take a $10,000 pay cut if they let me work from home three days a week, because that is so valuable to them. You know, another thing that I really encourage all of my clients to negotiate and ask for is learning reimbursement.

So if you're going to take this job and maybe the salary isn't what you thought it was going to be, ask for a coach, ask for tuition reimbursement, ask for like learning and development funds. They're going to help improve you and your leadership skills, whether it's access to a conference, a coach, maybe a learning and development course that you've really wanted to take, or maybe you want to get your MBA or some other advanced degree, like, you know, vacation, flexibility, some benefits, but like learning and development reimbursement is like another thing that you can really negotiate. And I think for those of you who are business owners, you're right. Sometimes when folks can't meet my budget, I kind of have a criteria matrix on if it's a, no, they can't meet my budget. And it's somebody that I'm not willing to lower my budget for

because the potential or the alignment just isn't correct. But if it's somebody I really want to work with, and I'm thinking of an organization in my mind, and the people that I'm talking to are like ideal future clients, there's other ways we can make that up. And they have made it up. I say, okay, I'll make a discount in my budget, but you need me to allow me to sell books on site. Or I'm happy to take a discount in the budget, but you need to take pictures of me speaking, promote it on social media, do some follow-up things in your newsletter. And so, you know, I think that there's just so

many other things that we can negotiate that may not be dollars in the bank in the short term, but can help us accumulate dollars, more dollars in the bank in the long term. Yeah. On the entrepreneurship side, I have a five factor thing. So when I'm talking to somebody, then if they meet all five of the factors, it's like automatic. Yes. Let's go. Right. If they make four out of the five, it's still a yes. If it's three out of five, it really needs to be, if it's a two or a one, it's a no. Even if the one is they can pay my full rate, but they don't meet any of the other four factors, it would still be a no for me. And I've just learned

this through experience. There's some things that are just not worth the money. Hard lessons. Right. Which also brings me back to another, and I don't know if it's a form of compensation, but something to factor in. I would take less money to be with a great leader or in a great culture. There are some jobs that I look at or some people that you could work with that I'm like, you could not pay me enough. The answer would just be a hard no. So that's, I think, something else to consider. Yeah, it's alignment. When I was in corporate and even as an entrepreneur, the number one thing was, is this job aligned to my values? Because one of the things that I know absolutely be true is no amount of money is worth misery.

And I've been there and I've had too many clients there who come because they have the golden handcuffs. They're stuck. They're making a ton of money because they took the job for the salary or the title, but they hate the work. They're burned out. They're exhausted. They have no creativity left.

And to your point, even running my own business, I thought, oh, I'll be free of that. No people offer you to do stuff and you see what they're going to offer you. And you're like, wow, maybe. And then you're like, nope, because I always ask myself, will I resent the work once I say yes. And if the answer is yes, it's never, it's never worth the money. So really making sure it's in alignment to your values. I can't advocate for that enough. I've done that twice in my career where I've walked away from multiple six-figure contracts, not because they were bad or awful, but because I knew I wasn't meant to be there anymore. It was draining me more than it was energizing me. It was keeping me from what I really wanted to be doing.

It was a big risk and one worth taking. Okay. Let's talk about another myth. And it typically presents itself like, I don't make enough to cover my bills or my spouse or roommate just lost their job or childcare costs are going up and I need my employer to pay me more. It's some version of my employer should understand what's going on in my life and therefore pay me something. So the myth is that our life situation should be discussed in order to get increased compensation or the number that you want. Yeah.

And this really stems from, I remember being in human resources and we had an individual negotiating their salary with us. And one of his reasons for wanting a certain number was, well, I want my wife to stay home. That's great. That is a worthy goal to have your wife stay home. I love that those are family values for you. Unfortunately, employers cannot be in the business of family budgeting. That's just not the business that we're in. Like we are in the business of hiring great talent and paying that talent in alignment with what the market is paying that talent.

And it is your job to manage your finances and do the things that you have to do so that you can have the lifestyle that you want. Now I get it. We have folks who have illnesses, who have really extenuating circumstances, who haven't come from wealth, and all you know, and all of those things. And it's like, yes, I think you have to balance, you know, as I did as a recruiter to be empathetic

towards those circumstances. But as an employer, we just have some guidelines and responsibilities that we have to work within. And if we took in account everybody's circumstances, what would actually happen is there would be a lot of pay inequity. And I've seen this happen, especially, I don't hear it happen as much anymore, but I was talking to one of my HR colleagues just a few weeks ago about early in our careers about how, you know, oh, we should pay this, you know, white male COO more because he's got five kids and his wife stays home.

Now, 20 years ago, that might have been an okay conversation. But my point is, if we allowed that to be the driving force in which we establish compensation, the compensation inequity would probably rise because there are still more men in the workplace who are working, who have wives and families that stay home. And it would just plop up that argument more that we should continue to pay men more than women. And so I'm like, I know it sounds good, but the math just doesn't add up in the end. No, I'm with you. I think we can care about when people have life events. We can be a sounding board. We can talk about flexibility and optionality opportunities. But at the end of the day, your compensation should be based on your role. And if you want your spouse to be able to stay at home or you have a child care bill

that's coming or like that doesn't change your role. Your role is your role and your compensation should be based on that. You can care without adjusting compensation. I'm so glad that you put that myth in there because I've seen that in so many different versions. Okay. The last mistake, just for sake of time that I wanted to run through or myth, but I see it as a mistake is this. My employer should decide whether or not they want to hire me before we discuss compensation versus that this is a mutual decision conversation and compensation is an integral part of that decision.

So the myth is we shouldn't talk about money or benefits until the end of the selection or hiring or promoting process. Yes, False. And I'm going to give you three practices I did as today as an entrepreneur, as an employee and as employer. So here's the thing. I don't love wasting time. I am all about failing fast. So today in my business as an entrepreneur, when I get a inquiry, speaking inquiry, thank you so much for reaching out to me. Here is my rate. Because if they aren't even in the ballpark of my rate, I don't even like, let's not spend 30 minutes on the phone. It wastes my time. It wastes your time. Maybe I can refer you to somebody who is in this rate, but it's always a response of thank you. Here's the program. Here's my rate.

And here's the link to get on the call. And it weeds out every time they're like, oh, we had $500 and you've charged $5,000. Like there's just no way we're gonna get in the middle here. So that is just a great way, honestly, to save everybody's time. Cause they don't wanna get on a call with me and get all excited and realize they can't afford me.

Like that's just takes away the dignity. You know, as an employer, as somebody who is an HR person, I always in the screening call would say, this is the range for the position. And I'm going to send you a PDF of our benefits package. Because again, we had time to fill metrics.

My team's time was valuable. And I did not want my recruiters spending their time talking to people that we were so far out of the ballpark. Like now we're just wasting time bringing people in for interviews or wasting managers time. And so as a job seeker, I always really encourage my clients and something that I got better at along the way was talking about salary from day one. Can you tell me more about what the range is for this position? Is there a place on your website where I can review

your benefits? Because you know what, if you're working with an organization that responds well to that question, that's good news. Probably means there's a culture of transparency. You know, they're probably, you know, that's a good ding, ding, ding, that they probably work in alignment with your values. To be honest, you know, a lot of people don't want to hear this, but if you say, can you tell me about the pay range for this position? And can you point me to where your benefits are? And they get weird or they don't want to send it to you. I would really slow down and do a gut check because why, why the need for so much secrecy when that's such just a thing that we can talk about upfront just to not waste anybody's time so that we can only move forward with folks that, you know, that we're all working

in the same budget playing field. So that's something I've come full circle on over the years. I used to be in the camp of like, you don't ask that up front. This is, you know, determining whether or not there's even a potential fit before we get into all of that. And now I'm like, oh gosh. But I think the key that you said is range and typical benefits package. I think it's important to have the understanding that there is room to negotiate. There's room to have conversation.

There's flexibility and that this isn't a like offer or a guarantee. It's a starting point from which we can have discussions from. Yes. Yes, absolutely. Because again, I'm just big on let's just not waste anybody's time. Yeah. You know, because how frustrating is it that you go on three interviews and you spent like I am talking with somebody who is looking for a job like interviewing and job searching. It is a full time job. It is exhausting. It's requiring you to be on. So if we're not even in the ballpark, let's not waste anybody's time. It's not good for anyone. Yeah. No, I think that's so good. So we're out of time, but I want to send people to your website, kellyraethompson.com.

You mentioned that you have a resource. What was that again? Because I want to make sure people- Yeah. It was a free salary negotiation download. So if you just go to my website, there's just a little button that says free and there's all my free stuff and you'll find it right there. And if I can just leave people with just one thing, here is what I want them to know. It kind of ties back to my story about, I want to make money. Talking about money is easy. It's talking about the weather. You know, when I was in HR, when I was first having money conversation is conversations. It was like, Ooh, Oh my gosh. Like this is all big. It's kind of like when I was a bank teller and I first saw all of like the a hundred dollar bills in my drawer,

I was like, Ooh, you know, but after a while they're just paper. And you know, when I was an HR person, all these salary conversations were just another conversation. So here's what I want you to know from an HR person's perspective, talking about money is like talking about the weather. We expect you to negotiate. With every offer that I made, I would call and expect you to negotiate. So don't let us down. We can talk about it. I'm so glad you said that, Kelly. Thank you so much. And I wanted to encourage our listeners to get their hands on your book, Closing the Confidence Gap. Again, because of our shared love of confidence,

but also because I do think confidence and compensation are very closely aligned and I love how you wove those together. So thank you for your time today. Thank you for your great work. Listeners, definitely get your hands on her book, Closing the Confidence Gap. Thank you so much, Kelly. Thank you. All right. I'm going to keep my closing remarks brief and

remind you that determining what you make almost always involves more than just one person or one perspective. It's a discussion, a negotiation, an agreement. But advocating for what you believe you're worth only takes you. And you better believe that that is woman's work.