The $100K Receptionist

"The $100K Receptionist!"

My Job Here is Done™ Transcript (for general use only – machine-generated and it may not be accurate.) 

Dave (00:01) So Kelli and I went on a business trip to visit a new client, post-COVID, and we couldn't resist finally going to the beach for the first time in years.

Kelli (00:09) Yay. And by the way, thanks COVID for screwing up everything for the beach's number one fan, and that would be me!

Dave (00:17) Yeah, and I'm about number 10,000 on the beach fan list, which is fine. I brought my laptop, a chair and an umbrella, and I just chilled.

Dave (00:27) Next to us was a guy and a gal who were pretty upset. I really couldn't hear exactly what they were talking about at first, but it was about one of them recently getting let go from a company they were with for almost 20 years.

Kelli (00:41) Somehow Mr. Personality here

Dave (00:43) that's me!

Kelli (00:44) yeah... ended up sitting with them. And when I came back from basking in the beautiful blue ocean, I joined the conversation. The one who lost the job - I'm not going to say if it was the guy or the gal, because that's really not important - said, how am I going to replace the great pay I lost?

Dave (01:03) I asked, what did you do last? And they said, "I was the company's receptionist for the last 20 years."

Dave (01:10) Kelli, always the positive, optimistic cheerleader, then says, "hey, there are plenty of opportunities out there for you, especially Post COVID. You should be able to find something right now."

Kelli (01:21) I asked, was it a big company? And they said, yes, it grew fast over the last ten years. So I said, do you mind me asking what you were being paid? And they said, a little over 100.

Dave (01:34) A little over 100 what? I asked, a little over $100,000 a year.

Kelli (01:41) Whaaaaaaaat?

INTRO (01:43) Hi, I'm Dave, and I've been starting and running businesses all my life. And I'm Kelli, working for the man like a dog for decades. And you, are YOU the driven career professional, clawing your way up the ladder of success, maybe running your own business? The next 20 minutes or so is just for you.

Chuck Fresh (02:02) Welcome to My Job Here is Done.

Dave (02:07) Hey, welcome and thanks a lot for taking a break to give us about 20 minutes of your time today. I'm Dave.

Kelli (02:12) And I'm Kelli, and we talk about career success and entrepreneurial business growth on this podcast. Subscribe or follow us on your favorite app. We don't want you to miss any new episodes.

Dave (02:23) And you can interact with Kelli and I personally at our website MyJobHereIsDone.com and on social media at myjobpodcast.

Kelli (02:32) And yes, I want to make 100K as a receptionist. I was a receptionist back in the day. I think I made $6 an hour, max.

Dave (02:40) Max. Yeah, right. This story about the 100K receptionist today has myriad fails and problems associated with it. And although this may seem like an odd occurrence, maybe even a once-in-a-lifetime situation, it is not.

Kelli (02:54) This may also sound like it's the one about the out of whack pay, and it is sort of, but it's more about how pay inconsistencies can happen in the first place.

Dave (03:04) And although it doesn't happen often to the extent of our story today about the $100,000 receptionist, we bet it is creeping around at your business. And this is one problem that leadership can correct pretty easily

Kelli (03:17) Before we dive in, the two people we met on the beach, Archie and April, were both very nice people. Yeah. One of them worked as an electrical engineer, in and out of various jobs over the last 20 or so years and moving up the ladder of success.

Dave (03:33) and the other, who was actually making the most income for the family at that point, was a front-line receptionist working for the same company for about 20 years.

Dave (03:42) Curious to know how a role like that could make 100K? We asked if the duties for the receptionists were unique, or was this like Apple or Ford or some unique thing like that, and they answered, no, it was literally a normal receptionist job, and they were making 100 grand a year.

Kelli (04:00) I chatted with them for an hour or so, and both had saved enough money to not be an immediate crisis over the lost income, but they did need to replace it eventually.

Kelli (04:10) The story was this person started with the company early on as the first receptionist. They didn't have any other work skills, as it was their first real job, but they had a degree in political science, which they had zero interest in.

Dave (04:24) I hate hearing that.

Kelli (04:25) I know.

Dave (04:26) If you're going to waste four years in college...

Kelli (04:28) Careful, careful, bucky.

Dave (04:30) I mean, if you're going to put your life on hold for four years while you go to college, please at least consider a degree that you can use no matter what you end up doing.

Kelli (04:41) He isn't anti-college. I promise.

Dave (04:43) I promise too

Kelli (04:44) You can hear our ideas on adult education if you listen to our episode: "If you don't go to college, you'll never get paid well ...Poppycock."

Dave (04:53) Well, thanks for sticking up for me, mom. Can I continue now?

Kelli (04:56) Yes, please do.

Dave (04:58) Anyway, as the company's receptionist, this person started off in that position at a normal pay scale when they first started. But over the years, as the company grew, leadership rewarded the loyal employees with some nice increases.

Dave (05:10) And leadership thought, well, we need to be fair and equal to everyone, so they automatically gave all employees a 5% merit increase each year. Everybody was happy.

Kelli (05:21) And in this person's case, these salary increases that are so often given out in an attempt to show some level of appreciation resulted in 20 years of compounding salary, to the point where this person was now making 100 grand a year

Dave (05:36) ...As a receptionist. And I don't say that to 'diss' receptionists or anybody. I say it to illustrate the problem we're going to talk about today, and some ways for you to consider to nip this in the bud if it's happening at your business or company

Kelli (05:53) We think automatic merit increases or even yearly salary increases just because employees in general are doing a good job, are hurting you as a business, in misappropriated payroll costs, stunting your growth, and doing your employees no favors.

Dave (06:08) If you're in a leadership position, I ask you to take a moment and reflect on your teams or your whole employee population, if you happen to be the ruler of the castle.

Dave (06:18) Ask yourself these questions: Have you given a pay increase to an employee just because you had not done so in a while? for no other reason?

Dave (06:27) Have you looked at payroll expense or budget and said, I absolutely need to add 3 to 5% to this budget for next year so I can do across-the-board merit increases? Remember, we're talking merit increases here, not necessarily cost of living.

Dave (06:43) Or have you ever said to yourself, this employee is making too much money and this one is not making enough money?

Kelli (06:51) If you answered yes to any of these questions, and I think you know you have, we suggest you reconsider the way you pay your people, because you just admitted that your pay system is based on either old common practices of automatic pay increases or that you may have lost control of the fairness factor in your pay system.

Dave (07:11) and as a result, you're missing an opportunity to help your company and your people grow.

Kelli (07:16) Let's go back to Archie and April for a moment. I asked them, did they do anything over the years you were there to improve your future, like learn new skills or find a way to advance in the company past the receptionist level? The answer was no. They were comfortable with that job, and as they said, hey, it's not like I wasn't being paid well

Dave (07:37) until you're not.

Dave (07:39) I asked if they had a reason why they were let go, and they said the reason was cost-cutting. I bet it was. Someone finally realized that the receptionist job, no matter how well it was being done, was not worth or justifiable at $100,000 a year for our new beach friends.

Dave (07:58) Sadly, they will never replace that job with a new job that will pay that type of money. And worse, they have no alternative skills. This is bad all around, because I can also guarantee the owner who trusted them for 20 years did not want to lose that loyal employee who also had extensive tribal knowledge. Now that person's gone.

Kelli (08:22) Yeah, and that's too bad.

Dave (08:24) Okay. I hear you saying in the background because I can hear the Internet buzzing.... the Internet is in my head all the time. I hear you saying $100,000 a year receptionist is a long shot and an exaggeration for effect. Fine. Forget about the role. The math here is simple, and that's what I want you to apply. As you think about this, if a person starts a job at $40,000 a year and you give an automatic 5% per year raise, they'll be making $106,000 in 20 years. So yes, it could happen.

Dave (08:58) The point here is that you don't want that to happen. It's runaway pay and it's hurting everyone. Yes, everyone. Even the employees.

Kelli (09:07) The story of April and Archie illustrates a problem employers have with common compensation systems.

Kelli (09:14) Most compensation stages work like this: Get the new employee at the least possible cost. If there's a pay band established for the job, the unsung goal is to bring new people in at the bottom of that band as often as you can.

Dave (09:28) Yes, you're right. And the next stage is what we call the first bump. That's the point where the new employees now pass, let's say, a probationary period, or who has passed certain certifications required for continued employment, and they're now considered fully oriented. This often coincides with a bump in pay or benefits.

Kelli (09:49) From there, the norm is usually programmed yearly raises based on some external factors, like company profits, national cost of living increases, inflation, or something else that one single employee or role cannot control or influence.

Dave (10:04) The mantra sung is this when the whole company wins, you win.

Dave (10:11) That's okay to do, but look closely at the majority of the employees that you have that can't influence a change. For instance, if goals are based on sales and the sales team blew it, there is absolutely no way the receptionist could have intervened to save the day, no matter how hard they worked.

Dave (10:30) So the company didn't win because of the sales team and everybody suffers. Not good for morale, and it's a great way to silo people and create animosities.

Kelli (10:41) And I could tell you firsthand, these programmed pay increases are often viewed by employees as both expected and counted on.

Dave (10:49) You bet.

Kelli (10:49) And when something goes wrong and the automatic yearly increase isn't so automatic this year, employee satisfaction levels plummet.

Dave (10:57) Yeah. These programmatic comp plans, to me, also send a message that if you just make it through the year, slip under the radar, and do your job, the company is going to reward you for doing that forever and ever and ever...

Kelli (11:13) I've lived in this world just like your employees are living it, and I can speak on their behalf.

Kelli (11:18) Employees know one thing well about your business, and that's how much they get compensated. They know the dates they can expect programmed raises. They know about how much they can expect based on last year and talking to others, and they count on consistency here.

Kelli (11:34) But they often don't know what drives those increases, other than the old saying if the company does well, you will get a raise.

Dave (11:41) and programmed compensation leaves out the high achievers, rewards low performers, and favors an "everybody-gets-a-trophy" once-a-year sense.

Dave (11:52) This situation can be slowly making $100,000 receptionists in your organization, and it's not good for business or for the employees.

Kelli (12:02) So what's a better alternative? And how can you, as leadership, make a change that works for everyone? Yes, everyone. With the sole exception of the total losers who should go away anyway.

Dave (12:15) Out the door.

Kelli (12:17) There are ways to make this work for everyone.

Dave (12:19) Let's look at an idea that you can modify to work in your particular business environment. We call it Role-Based Compensation with Incentives.

Kelli (12:30) Role-Based Compensation with Incentives is an easy-to-understand and implement program that does away with the majority of automatic raises, replacing them with achievement-based compensation, professional growth challenges, and advancement opportunities.

Dave (12:44) Here is the gist of the program, we'll dig in a little deeper in a moment.

Dave (12:48) Role-based Compensation with Incentives creates a clear list of all of the roles and responsibilities in your particular business model associated with the titles that go along with those roles.

Kelli (13:00) It also clearly and very visibly provides the minimum and maximum compensation range for a particular role.

Dave (13:08) and visually may actually include - and should - your public job postings. So you let people know what the expected salary range is, which a lot of businesses just don't do these days.

Kelli (13:19) My pet peeve, number one.

Dave (13:21) Absolutely.

Kelli (13:22) So, as an example, you may have a business that employs technicians to perform maintenance on a product. Let's use industrial heating and air conditioning as an example.

Dave (13:32) And in that business, you have three levels or roles of technicians

Dave (13:37) the entry-level role of apprentice technician, the role of master technician, and the top role of an expert technician.

Dave (13:45) In the role of apprentice, you list the qualifications needed to achieve consideration for that role. And, for example, you set the minimum salary of, say, 30K per year and the maximum salary of 40K per year. If you stay an apprentice, you will never make more than $40K per year in this role.

Dave (14:07) To make more money, you need to grow along with the company into new roles if you want to. So hopefully you're ambitious, and if you're ambitious, that's probably why you're listening to this podcast, right?

Dave (14:22) So, to qualify to be a Master Technician, you have to complete, say, two years of service or have two years of experience elsewhere. You have to acquire certain advanced certifications and there has to be an opening available that is recommended by a manager for the position. The salary range for the Master Technician is 40K to 50K per year. As long as you stay a Master Technician, you're not going to make any more than that.

Kelli (14:50) Use similar criteria for the expert technician as you think this through. If you're an apprentice and you do your job well, but you have no ambition to get those needed certifications or achieve any other needed goals for advancement, you accept the fact that you'll max out someday at the top of your salary band, and then you get no further pay increase.

Kelli (15:10) You and the company can go along happy as a clam. You have no ambition to change, you're happy where you are and that's great.

Dave (15:18) I still don't know how clams are happy.

Kelli (15:24) I don't know. They're probably not happy when they're steaming. I would say unhappy at that point.

Dave (15:31) So that's how you prevent the $100,000 secretary from happening. You've got these pay ranges that are bounded, right?

Dave (15:38) So if you start an employee at 30K as an apprentice, and as leadership, you did away with all yearly automatic merit raises, how does that team member in the apprentice role increase their salary as they stay with the company? Potentially to the top of the pay range, which in that roll is 40K?

Kelli (15:57) Good question. Here's where the "with incentives" part of role-based compensation with incentives comes into play.

Kelli (16:05) We already know the role-based compensation range, in this case that's 30 to 40 km, so that's our budget.

Kelli (16:12) We work within that budget to increase our team members' pay through individual performance incentives such as achieving great customer satisfaction scores, taking on extra project work that may be available, or achieving impressive results in team goals or challenges.

Dave (16:29) Employee incentive programs also drive bonuses like our Keys to Success program can provide, which accretes to pay bumps within the role range. If you work to encourage employee productivity and base the rewards on salary bumps and bonuses up to the maximum of the roles range, you are setting clear expectations to everyone and everything from the budget process to cash flow predictions to business oscillations. The pros and cons of that going up and down to the employee's expectations, everybody starts to win.

Kelli (17:04) With incentives, as in role-based compensation, with incentives, also means providing the incentive to the employee to grow up and out of their current position. You literally help them get unstuck.

Kelli (17:17) We asked our beach friends this question... If your boss would have come to you and said listen, as a receptionist you'll only make up to this amount of money, but we'd like to see you grow with us, would you have been interested in hearing more?

Dave (17:29) I remember their faces, it's almost like "huh?" And then the answer was of course almost like duh. Who wouldn't?

Kelli (17:39) They would have loved to hear there was training available and shadowing programs that allowed them to learn new complementary skills so they could move from receptionist role to say an executive assistant role, which has a higher salary range and more responsibilities.

Dave (17:53) Hey, as business leaders we often forget about people because they just do their jobs and that's kind of what we're hoping, right? And when we forget about them, we figure if they need something, they'll come and ask.

Dave (18:06) That's a wrong assumption. The vast majority of people want to be led and encouraged and we forget that too often and when we forget it, we orphan good team members who then look outside of the Organization for Advancement Opportunities. And then we wonder why they left. It should actually be no surprise. In retrospect.

Kelli (18:27) The message we'd like to share here is that as leadership, we need to create and foster an environment in our own business that promotes internal growth. We invest a lot in employees, and it takes time for that investment to pay off. We want our receptionists to become secretaries or executive assistants, and we want them to ascend the career ladder in our business, NOT at the competition.

Dave (18:50) Right? And we want our apprentice techs to advance to master and expert levels and make more money in a fair and useful fashion, where they grow with the business, love the business, and rise to the challenges of the business.

Kelli (19:04) You can set this in motion with a foundation centered around role based compensation with incentives, as we just outlined. Sure, there are more steps to this, and it takes some planning, but think about it. It's fair, predictable, and people oriented.

Dave (19:19) And yes, sorry, beach friends. With a program like this in place in the business, you won't be making bank just because you stayed good at your exact same job forever and ever.

Dave (19:29) And as it turns out, one of our beach friends are likely going from $100,000 a year in salary back down to around 40K at a new job.

Dave (19:39) And the company needlessly lost a dedicated and valuable 20-year employee, all because they didn't get take or have the opportunity to grow and expand their talents in the business.

Dave (19:53) And that was a total waste, in our opinion.

Kelli (19:58) Thanks very much for listening today. We hope you enjoyed our story about the $100,000 receptionist. More and more people listen each week just because of you spreading the word about our My Job Here Is Done podcast. So thank you very much for telling a friend about us.

Dave (20:14) And please tell your friend that they can follow our podcast anywhere and everywhere podcasts are available using their favorite app or at our website. My Job Here is Done.com.

Chuck Fresh (20:28) I'm the announcer guy, and I sound as good as the story you just listened to. My Job Here is Done as a podcast production of 2PointOh LLC. Thank you and your awesome ears for listening. Want to get involved? Have your own special story to share? Tell us all about it and you might get some airtime, just like me. Browse over to Myjobhereisdone.com, squish that all together into one word and look for the My Story link. Until next time ... My Job Here is Done.