Are You Paying Your Employees Too Much? | Ep 29

Build with Leila Hormozi

Leila Hormozi

Education, Entrepreneurship, Management, How To, Business

5 • 867 Ratings

🗓️ 18 April 2023

⏱️ 13 minutes

🔗️ Recording | iTunes | RSS

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Summary

“Other people in your business are not responsible for obeying the feeling of guilt that you have.” Today, Leila (@LeilaHormozi) shares with us how companies often make the mistake of compensating employees inappropriately based on personal beliefs about money, which can lead to overpaying and setting improper expectations. She also suggests developing a pay methodology based on fair market value and avoiding paying people more incorrectly, which can set them up for failure in the long run.

Welcome to Build where we talk about the lessons I have learned in scaling big businesses, gaining millions in sales, and helping our portfolio companies do the same. Buckle up, because we’re creating an unshakeable business.

Timestamps:

(2:45) - Entitlement develops with pay & overpaying sets up failure

(5:21) - Pay should not be tied to emotions

(6:30) - False belief #1: more profit equals more pay

(8:12) - False belief #2: sudden increase equals raise

(10:06) - False belief #3: more money equals better people

(11:12) - Make a pay methodology to avoid guilt

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Transcript

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0:00.0	just because you have a large influx of money, should you spend it on everything?
0:03.6	Should you act as if it will never end?
0:05.9	And a lot of people may say, well, that's not thinking abundantly if I don't want to pay people
0:09.6	more.
0:10.0	And I'm like, this isn't about abundance.
0:11.6	This is about what is fair market value for their services.
0:18.8	How do you create an unshakable business?
0:21.3	I cross $100 million in net worth by the age of 28.
0:24.4	Now I'm growing Acquisition.com into a billion dollar portfolio.
0:27.6	In this podcast, I share the lessons I've learned in scaling big businesses and helping
0:31.2	our portfolio companies do the same.
0:33.3	Buckle up and let's build.
0:37.2	What is up today?
0:38.1	What I want to talk about is one of the most painful mistakes that I see companies,
0:42.1	and I have also made on the way to $10, $30, $50, $100 million.
0:46.5	So that mistake is how you compensate your employees.
0:51.5	And I actually feel really passionate about this subject because it is one that I
0:56.5	atrociously messed up. And I have seen over and over again that people tend to overlook this and
1:03.1	not understand the importance of it in the beginning. And I wish I had known sooner. And right now,
1:07.9	actually, with one of our portfolio companies, they are learning it the hard way.
1:11.7	You know, we came in and the setup that they had with a lot of their employees, they're realizing
1:16.2	now does not make sense and is creating behaviors in their employees that they do not want.
	...

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