At the September meeting of the Women in Family Business Peer Group, we discussed compensation. Every company has to work through the complications of compensation at various points in development. However, in family business, there can be even more to consider.
Compensation in Family Business
From the perspective of a current owner, it can be hard to know how much to pay employees, especially when they’re family members. It is hard to place a number on the value of the people we care about. We discussed the issues that can arise when favoritism is reflected in salary choice, especially when they’re working at the same level as other non-family employees. There can also be favoritism within the family and arguments over ‘fairness’. Equal sometimes is not fair, and sometimes fair is not equal.
From the perspective of a non-owner family member, getting what’s deserved can be difficult in a family dynamic. So often, for women in business, we do not push for what any man would automatically expect. For younger generations, there is the difficult dynamic of not being treated and compensated as you should be when you’re still being viewed like a child. Breaking the wall between parent/child and moving to employer/employee is vital. However, how much more work is a next-gen doing regardless of job title, and how should that affect compensation? Full role can determine pay, not exclusively title.
Salary Negotiation
When negotiating compensation, we discussed how important it is to be specific. When meeting new possible employees, knowing precisely what you’re looking for and how much a candidate is worth based on expectations is essential. Be specific with everyone. Ask the crucial questions, not only of them but of the company. Is a class on a topic adequate experience? What does a company value, and how much is a good and consistent employee worth?
When engaging in salary negotiation, we agreed it’s important to remember that not everyone will be right for your company. When looking at a prospective employee, knowing what you want might not mean the best applicant on paper. Do you want to mold the perfect candidate for a lower starting salary, or would you rather focus on quick quality for a higher salary? These are the questions that need to be asked before going into recruitment.
Non-Family Recruitment
In family business, there is a stigma of lower pay standards in exchange for feeling part of the family. This is not always true, but it can be. In order to maintain good quality workers for a slightly lower price, it’s a matter of providing employees with intangible benefits. The family-owned business has the advantage of knowing and caring about family. Offering options like flexibility counters lower pay capabilities and shows your employees that you care about them and their families. These intangibles are powerful employee grabbers because people love the little things.
If you are interested in the Women in Family Business Peer Group, please join us at our monthly meetings. Contact Amy at adotts@familybusinesscenter if you have any questions about this group.
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