At Vanderbloemen Search, Everyone Blogs. Everyone? Everyone.

[Music] hello everyone welcome to the 21 hats podcast I'm Lauren Feldman your host every week I sit down with three business owners to talk about the challenges they're facing it's the kind of conversation you don't often hear in public our panelists address difficult topics like why their business isn't making as much money as they think it should why their digital marketing isn't working or why exactly they hired their brother-in-law owning a business can be a lonely and isolating Pursuit but at least you'll know that you're not the only one facing these issues got a question you'd like us to address send it to us and follow us on Twitter at21 hats or on our website 21h hats.com welcome to episode two of the 21 hats podcast let's meet our 21 hats podcast team for this week uh back with us again are Karen Clark Cole who is CEO of blinkux a digital research and design firm based in Seattle William Vander blumin who is CEO of Vander blumin a search firm that's based in Houston and specializes in working with churches and other faith-based organizations and with us for the first time is Jay goz who has several businesses in Chicago including the largest picture framing shop in the country artist frame service and a popular home store called Jason home Jay let's start with you tell us a little B about your businesses how big are they uh how many employees how much revenue I have there's basically uh four companies I have framing I've got the home store I sell wholesale frames National to frame shops and of an art business 115 people uh approaching $20 million started 41 years ago basically out of the trunk of my car selling to artists during you know art fairs that's where the name came from and have grown it organically through you know all these years some years we grew at 30% in the beginning and then it went to 2010 and then in 2008 it dropped 30% so if you do the math I've I've I've grown at about 10% year for the last 41 years so let me ask you the question that I asked everyone last week are you making as much money as you think you should be making at the moment no but I'm going to fix it uh I I have a problem with inventory and knowing what my cost of good sold are we sell a lot of products so I actually don't know exactly how much money we make until we take inventory and I'm I'm in a weird business I'm also manufacturing you know framing is manufactur Ing and it's all Customs so it's it's very difficult to keep a Hands-On every day as how much money you actually made so you might think you're doing fine and then you get inventory at the end of the year and oops you're off $200,000 so why is it hard for you to know how much money you're making every day because because if I was selling te television sets every time I sold a television set I could take out of inventory $914 32 when you're framing pictures you're estimating how much time and lay and and and material is going to go into the jobs and when you're doing millions of dollars it's easy for oops the molding the quality is a little off than it used to be or um you know one of your guys retired and the guy that took over is a little slower it it's it's not you can't look at how many widgets you produced every day because it's all Customs so it's very hard you can you're basically estimating what you're making every week but until you take inventory and I don't have a system that I know exactly what the inventory is every day there's an adjustment at the end the period And I take inventory twice a year this is an issue you've been dealing with for for 41 years yeah and the other problem I have is I'm my business is way too big to use the canned software that's available out there right now for picture frame shops but I'm way too small because I already tried this to go write my own software so I'm can software to to do what for from point of sale through production so I'm using the same computer system I've had since 1986 does that mean you're staring at a screen that only prints green letters right now basically like I said I'm I'm working on converting out of it but there's only two other guys in the country anywhere near my size and I'm probably going to go to one of their softwares I'm waiting to see how theirs flush out what do you need as a picture frame shop and software that someone else doing you know another retail business you know you go buy something in a r retail store buyer code click done here we got to measure the art we have to figure out how many feet of molding it's going to take we've got to it's custom is it regular what kind of glass is it there's there's literally a thousand different choices to make or 5,000 different choices and it it needs to calculate the cost it needs to figure out how long is this going to take and how much and and and then it's got to go into a production you know I'm framing you know uh hundreds of pictures a week so it's not like the little frame shop where the person can just you know keep it on a pad of paper so I and it works Karen you're our software expert any thoughts for Jay uh well um software creates efficiency and efficiency creates more money generally so I'm a big fan of having really efficient software that's easy to use that anybody can use and gets you what you need so if it's doing that then I wouldn't change a thing but if it's not then needs to be changed do you think there's a solution out there uh for Jay or is this something that definitely is he right this has to be customized yeah I don't know it would be hard for me to say because we'd have to look exactly at what the specific scenarios are you know use cases for the different people interacting with it but most honestly most big Enterprise systems they can't possibly be perfect for every company so you really need to customize here's the reality if I decided to oh Jay you're big enough you should just go write your own system Not only would I be spending hundreds of thousands of dollars to write this who's going to be the one internally that's going to oversee this whole thing it's like a major undertaking and while I'm way bigger than than most frame shops I'm also not a $50 million company and I'm just kind of caught in between and the fact is what I have is working well enough until what I'm going to go to is one of my other friends in the business they've got like 12 stores each of them and they're already doing it and they're adapting existing software so I'm just going to take that one over but doing it from scratch would just be uh a nightmare yeah that's always my advice if you can do use what somebody else has done you should do that so good idea to take over your friends yeah yeah Jay let's go back to the uh original question uh actually like everyone else on this podcast you expressed some disappointment in your uh recent profit numbers um I think you said that the the the issue at hand is inventory no that's just one of them one of the issues is is the real estate taxes in Chicago just took a huge hit this year so all of a sudden that's right out of the bottom line and then they've been raising the minimum wage in Chicago a dollar every year for the last five years and I'm not complaining about it cuz people need to make more and it was ridiculously cheap before but that adds money and then they just decided you've got to pay five sick days to everybody okay so every time you turn around there's another 50,00,000 20,000 and it adds up and I probably should have uh raised my prices quicker and I didn't and um so that's just one issue the inventory problem is in the last 20 years the quality of of the materials we're buying everything from matboard to molding to Glass the quality is not the same and it's taken longer to give a good quality product because there's more scrap so it's like a moving Target and uh I've made the adjustments I need to make it will be fine it's not I've been through this you know 10 times um what are your annual revenues uh approaching $20 million but that's for all the businesses I'm way bigger I'm my frame shop is literally 20 times the size of the average frame shop in the United States so it it gives me buying power part of the reason it's so much bigger is I've got good people here that hang around and they know what they're doing and that cost more and you know you can't you can go to one of these stores that do the does these 50% off sale things and you're going to be dealing with someone making 13 bucks an hour and they're going to have very little idea what they're doing and it's there's a good chance it's not going to turn out like you think so I'm paying more and it's a more professional level and you know it costs more so I have to constantly make adjustments to uh what we're what we're charging and right now my prices are pretty comp they're very competitive I I might be a little more than some places but in most businesses you go to buy the premium product you pay twice the price well I'm not even close to that I maybe I'm 10% more are you thinking about raising them absolutely I I have no choice I mean where's it and then I got the tariffs to deal with uh we import some stuff from China the biggest thing at the moment well there's lots of big things but this health insurance thing is a big problem every year you take another hit for 10% okay well all right we'll deal with it well you do that for three four five years in a row it's the health insurance thing is a huge issue and I'll tell you where the hole is so when they come up with these mandates with raising minimum wage I you know I I pay for health insurance there's a big difference between forcing someone to pay someone more money who doesn't give any benefits and someone who does give benefits and that's not factored in so I'm I'm certainly not saying I want to pay for one minimum wage but it has pushed up the wages which is okay but but I do pay benefits on top of that and many companies don't pay benefits so are you talking about companies that you compete with yeah that I'm competing with yeah I mean we're still dealing with some of these people are still in 1963 they're paying cash to their employees and not you know I I do you know with the frame shows I do I do speaking there all the time I ask people what are your gross revenues half the people in the audience don't even know what they gross last year I mean it's like it's like a they got the cigar box with the cash in it and they're paying for their kid shoes out of it I mean they don't even keep track of you know what their sales are and who knows if they're paying taxes I mean that's that's It's a Small industry when you say you're paying benefits what does that mean I pay for over 50% of the health insurance and the family you know they have to they have you know they they kick in more but even just paying for the individual it's it's just getting more and more expensive every year let's move on to another topic now uh I want to talk about marketing and I'd love to hear from each of you something that's uh that's working something that's not working for you it it seems like the you know the the playing field changes so often uh what works one day doesn't necessarily work the next day Karen let's start with you what what's working or not working for you in your marketing for us it's the biggest problem is resources because we are a you know we build time at our company and so a marketing department are non-billable and so for us to make it a priority in terms of how we spend our profits on marketing it's a little bit of a Catch 22 we need to do it but at the same time it's really hard for us to justify too many overhead positions in the company so you know our biggest constraint is just is just resources so people um but what what we largely do is it's it's web based so it's SEO sem that's where we spend the most of our money in marketing um and that's really so it's all about content so on our it's about driving content to our website so that people find us uh that's that's the biggest thing and that works really well for us we we come up quickly in web searches which is really important who's your uh Target who are you trying to reach it varies um product owners um all the way up to the SE Suite um sometimes a CMO um sometimes our clients come from the technology side of a company um but but largely they're they're product people type of people they're sometimes in the Innovation space and we span all verticals you're in the uh the tech industry you I talk to business owners all the time who are not who are are just uh at Loose Ends over the SEO issue you know trying to figure it out trying to figure out who to trust yeah you wanna you want to hire a really reputable firm and there's plenty of them out there how do you know how do you find the right one get references you talk to people who have worked with them who have had really good results because it is constantly changing it's possible you have one or two people who are just that's all they do is they you know they understand Google they understand how it's changing they understand what's happening today and tomorrow um but the best thing is to hire a specialty firm that that's all they do and they're very good at it Karen not to interrupt but uh you know a cheaper alternative that we found is just have a really weird last name that works great well my name is a little bit weird but they're not searching on me that's the problem so they're searching on user experience they're searching on usability service design digital transformation all that kind of stuff so we have to show up there well I bring it up because it's what I bang my head against is how much we have to continually accelerate the amount of money we're spending with Google or with Facebook for SEO results I've told this story before but we I I think I bought 300 domain names from GoDaddy I think I have lifetime Platinum Status with them forever me too me too yeah and I mean it was kind of ridiculous and then I hired an SEO firm and said okay here's the one thing we're not going to do we're not going to name the firm after me because I don't want to be the limiting factor they came back and did all their magic and said well here's the thing good news bad news good news we found the right domain name bad news um it's your last name and I'm like what and they said well your last name is so screwed up that you can misspell it into Google a hundred different ways and it'll lead you there so so we went with that and it worked given that Advantage what are you spending money on what what is the challenge that you face improving your SEO two things come to mind I'm sure there're more than that my marketing person could tell you a longer list but one uh we're non- Geographic so you know where with Facebook ads particularly you can do Geographic targeting we're all over the world and uh so that makes it a little tough secondly you know the word for people that we generally place so we work with all kinds of Christian organizations whether they're schools or relief organizations or even for profit businesses but the backbone of the business is churches hire us to help find their Pastor well not everybody calls it a pastor so you go to the other words and it's like Minister well minister is also a political term for minister of defense and the minister of you know they're just so Broad and Scattered that uh being able to hit Top you know top search result it it just gets more and more expensive William when you talk about these key words are you talking about words that you use in your content to make sure that you show up in SEO or are you talking about keywords that you use in pay-per-click advertising to uh to buy ads content so so we're not buying a ton of ads we'll buy a few but most of ours if I heard Karen right it's content for her as well and content used to be you know my friend and client uh Dave Ramsey you know the the don't have credit cards guy uh he used to be if you Googled the word debt he was the number one result and it was back in the day where you could just put debt all the way across the footer of every web page and the spiders would pick up the word debt and it's not that easy now and now now the spiders are actually reading the content you write to see if they think it's thoughtful enough to hit a result and I think well and not only that not only that there um Google will will hit you if you don't have a good user experience meaning if you click on something and it doesn't take you to content that's relevant to the word that you clicked on and that the the navigation related to that if they're not connected to what your Search terms are they'll give you a negative rating so this is where you you know helps us in terms of user experience work and you better make sure that your site is authentic to what you're saying it's doing content length has changed too hadn't it Karen it used to be 100 words was the right length now it's like 6 to 800 one of the problems with payperclick is that there's always going to be some idiot that's spending a zillion dollars a month that gets the price up there and if they could if they understood that it wasn't working they would stop doing it but they can't because the attribution is so difficult from this stuff I mean I'm in an industry there's some there's a chain of stores that has over a thousand stores so they bought the paperclick do they have any clue if it's working and my answer is I don't think so but they're a multi-billion doll company so what do they care so all it did is it jacked up the the paperclip costs and I don't think it's going to work for anybody at this point that is so good Jay and it sometimes competitors think that growth is the goal rather than actually doing something that's profitable so we're just going to get the paperclick paperclick paperclick but it does it actually loses money and never right but this case a company does a billion dollars a year are they goingon to notice I know other businesses you look at they a lot of these companies we're dealing with now do nothing but lose money and that's the furniture business you know Wayfair is having an impact they're doing like8 billion dollar a year doing nothing but losing money but it's it's it makes it a difficult environment for everybody else the increase in the price uh of keywords uh has been going on for I I don't know at least five six seven years and that's part of the reason that people have uh turned to content marketing uh the way uh you guys do Karen and and William William you take a really unusual approach uh to producing a lot of content why did you are you still requiring all of your employees to uh uh to to blog we are uh when we started in uh 8 which would have been right when Twitter hit the scene uh was shortly after Facebook was no longer just college campuses and and then I fell into blogging and I guess the number one rule for blogging is consistency is it right and I just didn't have time to do it all the time so when I hired somebody I said hey go listen to this podcast to this great Pastor break it down make a listening guide turn it into a you know a blog post and here's how you post I think we were using Wordpress at the time it was you know pretty primitive and he did and it worked and so then the next person we said well why don't you do that and then we put it just kind of snowballed where we we actually put a writing quot on everyone that joined the firm everyone everyone uh and it might be like the receptionist yes I poor poor Administrative Assistant wrote uh an article and you you write on what you know so she's like how do you be a good Administrative Assistant well that actually would work cuz no one trains you how to do that in a church unfortunately she titled the article and we weren't doing a lot of quality control then um the view from the back seat and that just didn't play real well with with church people so we had to pull that one down but could you just change the name exactly so uh you know we've stubbed our toe quite a bit over the years but we have found that uh it's changed till we hire there have been people that would have been very good at a job but they aren't willing to or able to put together content and that just doesn't work for us but content is King for us how how much content are you producing oh gosh well so it's it's changed now so we we the definition of content has changed to produce an infographic produce uh blog post produce a podcast produce manage our Instagram for this long so it's you're a publisher yeah it's multifaceted content believe that any content is better than none and even if it's bad no who's overing this that quality it's it's almost all of our marketing work we do very little marketing outside of that we don't buy any print ads we don't do trade shows we don't you know all the all the normal things that a Services industry would do we just don't do we do cont we don't do any of those either see I do all those things and I can tell you what's changed in I I do trade shows in the framing industry I've been print ads for years I've done TV for years radio and what's happened is people that grew up in a normal business before the computer they're used to writing a check for the magazine they used to writing a check all of a sudden a lot of the stuff has turned into to salaries for internal people and they didn't make the change in their head so they're still budgeting 4% for advertising but they really should be budgeting 1% and then 3% should go to some people that work for you that are doing this stuff so my question to you William is who's overseeing all this stuff all the social media media do you have a marketing person that you making six figures that's overseeing this whole thing I do I do and they're not doing a whole lot of marketing outside of that but but I'll tell you Jay this is not prescriptive for everybody it's just worked for us and it is not because William had some grand plan I totally fell into this so so in our world there is uh a very wide gap between what you're taught in seminary and what you have to actually know to run an organization there no business classes there no there's not even how to run a staff meeting you come you exit I I have a master's from Princeton I know nothing about organizational development from them I can tell you about St Augustine that's really great but but it did no so so like so so we would put out things like this sounds so simple but how do you fire a volunteer well every pastor's like oh my gosh no one's ever T I don't know how to fire so where our normal when we would do a a a blog post or a email and send it out and see what the click-through rate was you know this is the these are old stats but we were you know uh sold on uh a software company called HubSpot that we use for our inbound marketing and when they made their pitch to us they said you know usually you write a post or you put it out in email and the clickthrough rate is going to be about 1% which is similar to if you've ever done direct mail that's kind of what you look for right that would be great yeah so they said we can take you to 3% so we're like okay fine so then they got into our numbers and studied and we're writing these blog posts out of a fraternity house I'm glad Osan never came over because it was bad um and we were getting a 37% clickthrough rate and they came back and said you should be charging money for this and we're like no no no no no it's fine we're just writing out of the Overflow of what we're learning anyway and it it created a loyal tribe and that was before you you had Seth Goen writing about these things and we didn't even know we were doing it but there's such a gap in our industry between what you're taught and trained and what you actually have to know to do the job that we had a a very fertile ground for easy blog posts that would be exceedingly helpful and I don't know for listeners you know maybe you identify the Gap where where is the knowledge Gap and how do you step in with it I can tell you the reason the 21 hats exist is because I'm telling you if you get a business degree even today not 30 40 years ago do you think they're teaching kids in college oh here's how you fire somebody do you think there's a class on that do you think there's a class on hiring right everyone should go to art school instead because in art school they teach you critical thinking which is all you really need I've got a lot of artists working for me I can tell you that that it's a whole another experience Karen you do you rely on content marketing as well H how do you approach it uh similar we have a lot of people in the company writing and so we have everyone has their own blog channel essentially and they can write um on topics that are you know related to their job related to the world as they see it from you know being a blink employee the quality insurance is there we have an editor and you know we sort of check it if it's something that's related to the culture of the company or the growth or the vision then I always check it but otherwise they're it's pretty open and free and uh and it creates you know our goal is always to to teach and provide you know not free advice but free learnings like here's how we do it here's what we learned and you know hopefully somebody can benefit from that so here's the question if you had 30 salespeople every every month you have a sales report you know who the winners are and you know who the people that aren't selling do you have any metric to know what your Roi is on the all these people doing this content because I have to believe some of them are gifted and great and are driving business and others are talking to themselves do you know which is which yeah we know whose whose posts are more successful for sure yep well in our software Jay tracks every motion every movement you make on our website once we have your IP address and assuming you're using one or two IP addresses between a phone and a tablet or a tablet and a laptop uh we can tell where you've been and so we're scoring articles to see when people read this article what's the next step they take and if it's moving them down the funnel towards sale then it's a higher scoring article and you bet we're watching that what software is that William is that HubSpot it's HubSpot we've had a very good experience with them I I think there are cheaper alternatives this is going to surprise a lot of people only one per of businesses that start ever end up with 100 employees only 1% in America that's what the number is and I believe that to be true so most of the people listening right now do not have hundreds of employees they've got 10 they've got five 20 whatever it is how does a smaller business that's doing $2 million a year $5 million how do they navigate this without that sixf figureure marketing person that works for them and do do either of you have an answer for that because I certainly don't I I'll tell you now the world has changed in the 11 years we've been doing this but when we started I didn't have any six figure anybody in fact we weren't we maybe we were making 200,000 gross Topline a year and we hired HubSpot which is you know it's a scaled disservice sort of deal how large is your email list and so if you're small it's fine and their whole premise and not to turn this into a commercial botom but the whole premise of inbound marketing is to allow the little guy to compete on the same field as the big guy and I think that's where the quality of content coupled with the right software can can help somebody on any scale budget uh compete at the same level as a Coca-Cola or or you know one of the larger companies I have a hard time believing that I have a hard time believing that someone can compete with a Coca-Cola that's got 40 people working in their digital Department that's a little hard for me to get my arms around well if they're trying to make a soda then maybe you're right but I'm saying smaller businesses which tend to be Niche uh can compete with the they don't have to hire a bunch of marketing people if they do good content and have uh the right software I don't know Karen you're the software person tell me tell me well I mean all I can say is that the how the world has changed and that everybody uses the web to find what they need so it's not um there aren't a whole bunch of channels you need to focus on it's one and you know it's a Google is a verb I mean that that's what you need to focus on so it's it's a lot more streamlined and a lot more um clear and specific in terms of user behavor behavior for what we know you know if somebody wants to know uh I'm sure even for you Jay that where should I get my picture framed they'll do a web search okay I need to challenge what you just said you just said quote unquote everyone uses the web and you only need one place to advertise and that is absolutely not true I mean it's largely true it's a lot true but the fact is if you're in a retail business it still matters having a storefront where you got to be and you can't just rely on the web to do that or any or nobody would have a decent spot anymore they would all take spaces in industrial parks and just use the web to drive their business to it we have a beautiful office for that very same reason so they come here there's a real physical experience but how we in our business get them get po 95% of all of our new leads and then we have referrals and we have repeat clients everything new comes through the web period for your business I'm just saying that I'm sure that's true for you I'm saying that doesn't work for all businesses What I Hear Karen saying is you don't have to think about radio TV print and and and there's one front door to every business now and it's the internet and I would totally agree with Karen on that oh my God that is so you are both in your your your Niche businesses and you think so are you Jay no I'm not I've got three different businesses that that that go everywhere from retail to direct s so I have I have a wider view of the world so are you saying that your customers find you because they walk down the Street and they happen to see you of course absolutely you don't think most retail do a search and then go walk into your office after they found the address and how what time you're open I actually have statistics because think about it I have to get their name and number so it's an unusual retail business I actually have every single customer they walk in I can immediately see whether they were here or not and I can ask them oh you're not in our computer where did you hear about us and I can tell you it falls into it falls into four buckets it's either there a repeat customer to referral referral is way bigger than anything else way bigger um driveby in the web and I will tell or in advertising and I will tell you there's no question that the web has gotten more and more popular and is actually probably bigger than the dry by now but it's still up in the game but but you can't take's no I'm not arguing that I'm just this I'm just saying speaking in in in absolutes that it's the only thing you you said exactly what I said which is we get our c customers from referral repeat clients and the web and we don't get Drive buys I'll give you that we get no drive my point there's people that are in the retail business I would tell someone going into business first and foremost especially in picture framing get a location that people can see your store because everyone doesn't do picture framing regularly and you regularly need to be you need to be seen you can't these people that think they're going to quote unquote save money by getting some off Street usually go broke because a good storefront pays for itself so it's not 100% but I'm not arguing the web is a critical Major Force these days but it hasn't it hasn't taken everything else out you'll notice that that Amazon is on TV Amazon's on radio I mean radio's not dead it's hurt but it's not dead print ad there's still plenty of print adverti it's not all gone it's not like everything now is just the web can you do those other things and not be on the web it would be stupid to I mean yeah I I would you certainly could but it wouldn't be smart no I do think you do need the web presence to to go with it and I wouldn't argue if you said the web has probably let's use the word probably turn into one of the major a major way of getting people into your business but in a retail setting um retail still needs a good location and it's still worth paying for the good location totally agree with you Jay I just know that when I have a need like recently framing pictures I just yelped picture frame training places and I live around four of them I know where they all are so I yelped it and I looked at reviews and I kind of did a little Google search and I read about it I did price comparisons before I got there so you know 10 years ago I would have walked in and said please educate me on frames now I think probably customers are walking in pretty dang educated and it's all through internet some except this always reminds me of when McGovern lost against Nixon and the famous writer Pauline I think Keel said I can't believe that mcover lost everyone I know voted for him you're in the computer you're you're both heavily using computers so just because the fact that you use the computer and you always yel everyone before you go doesn't mean that everyone else is because they're not don't you think this might say something about the age of your audience because I think that the younger the audience the the more clearly correct William is I I'm interrupting here because I would say average customer age I got all of y'all beat I'm working with churches like we are not a young market like so you know my my normal buyer is older and will often times mail in their contract snail mail and want me to return a snail mail sign signed copy and then we say how'd you find out about it say oh Google search no one's I'm not arguing that I'm just suggesting Google search does not turn into 100% of people that go shopping for anything are going to Google search in some businesses it's probably if close my guess is in Clos the retail storefront in the mall or on the street is still getting most their business and people walking by or referrals I don't think they're Googling close but in some businesses like yours it might be 100% from the web in other businesses maybe it's 20% but it's not all you know it's all over the place and I have the numbers for my own business I can tell you I get far more business from referrals than I get from the web though I will tell you for the first time in 41 years the web now is bringing in more business in the driveby that doesn't mean I shouldn't have a good location though because you know they work together but nobody's arguing about your location that you you have to have a place for them to go I mean you we spend majority of our monthly nut is spent on our rent here you we have a beautiful office it's very important but you're not paying extra to be on a Major Street to be visible to the public I assume not the no right that's what I'm talking about the incremental difference between paying $20 a foot to have a ni office that looks good like you know to paying $42 a foot because it's worth being out there is is it's advertising and I could show someone easily it's let's say you have a a 2,000 foot store if you pay $12 a foot more it's $24,000 a year in rent that's nothing in advertising dollars so like that is the cheapest form of advertising you could ever do when you're in a retail business pay more money for rent and get more bodies walking by and people frequently go for the cheaper rent because they think they're nuts lower and it's it's a it's a bad way to save money I want to hit a couple of news items um before we have to go um one is there's been a lot of stories lately one municipality after another has passed uh a uh a law requiring that employers not ask job candidates about their salary history and the the purpose of this obviously it's it's well- intended it's it's meant to uh to make sure that men and women are treated fairly um in the way they are paid but it does create a dilemma for employees or it can and I'm curious how each of you uh have handled this has it been an issue for any of you Lauren what do you think the Dilemma is oh I can tell you you're looking for a graphic designer and you've got a candidate and you don't know whether this person is Junior and making uh $42,000 a year or whether are real experienced and make $83,000 a year and frequently what someone was making at their last job gives you a pretty good indication of like if someone's making $83,000 they're probably going to have a skill set more than someone who's making 40 so it just makes it a little more difficult to try to assess a candidate because you don't know what someone else value at to their last job it should be irrelevant that what somebody pays somebody and is can be entirely different than what you pay why can't you write a very clear job description interview the person for their skills make a clear judgment as to whether they can complete the skills and do the job and then pay them what you're willing to pay for that level of skill for instance they could bring you a great portfolio but somebody else could have done half of it you have no way of knowing it so it's not well you have lots of ways of knowing it you do reference checks you look you have the oh certainly I'm not listen I'm not saying the law is horrible I'm not saying that there wasn't a reason for it I'm just saying it does take away one one one more way of trying to evaluate a candidate or to figure out gee if I pay them X dollars are they going to be uh happy because they were you know maybe they're out of work at the moment and they're taking a pay cut I I usually would be hesitant to to pay someone a lot less than they were making at their last job that would be won't that come out if you offer them if you offer them a salary that's lower than they've been making absolutely not they're desperate they need to find a job they just turned 54 they're worried about getting a job so they're going to take this until they can find something better because they got to pay their mortgage they're not going to say anything they're just going to take the job so what we do is we have very clear requirements as to what's what's in the job description and we take out anything that's not a requirement so that we're not limiting who's applying for the job for one um and then we give them the salary range in the first call so when we have our first screening call we let them know what the range is for this position so they're well aware of what we're offering and we don't ask them what they're making before because what somebody else is willing to pay somebody a it's none of our our business and B it might be entirely different than our values of what we think we should be paying our people we do a lot of research in the market before we post a position to make sure that we are within the range that's industry standard for the skills that we're requiring but I think it's it's absolutely mostly none of our business what they're making before and if somebody is coming in and they are able to do the skills that's required for a job and the pay is way more or less in some cases that's up to them to decide and they deserve to make more money if they're doing a different job most importantly it's perpetuating pay inequality which is the major problem I'm conflicted on this I I I try and get my head because we deal with it arguably more than either of the other two of you I me we deal with it every day what we're trying to assess candidates and whether they fit in markets and then you want to get into crazy pay scales glass door doesn't work for churches because churches have all these nonh compensations and it's it's very complex so what's a non-cash compensation um they're going to lease a car for you uh the kids get to go to the church school for free benefit it's arguably the most complex uh variance of types of compensation I've ever seen and it's so I'm I'm conflicted on the one hand completely agree with Karen the the inequity and pay around gender and age is ridiculous and it needs to be addressed on the other hand all this time that you're spending interviewing candidates who might not want to be a part of your job at all or you might rule them out based on what they're being you're wasting time which is wasting money which is wasting value for the company yeah but you don't need to ask them what they made before why don't you just ask them what they want to make in this role just change the question zip recruiters zip recruiter does that it says that's what we use we use zip recruiter and you put in there this job what are you looking for and they tell us so we know whether we should pursue it or not right yeah so you know there's having done over 10,000 face-to-face interviews one thing I've found is you ask somebody what they're getting paid okay it would be nice to know so you can trim things down but on the other hand all they're doing is self-reporting there's no way to know whether it's right or not well that's not true I've had cases where I I've heard of people doing it that they ask for a W2 I mean there are you can't ask them can't do that I do know people have done that but the point is you could also call the reference and say she said she was making $622,000 ises that sound right no I hear you J I guess what I'm saying is you know I'm always looking for ways to do triage and interviewing you need to take your time interviewing but you don't need to waste your time so if you've got a a $60,000 Pastor position and you're talking to somebody who's currently making a hundred and barely making it work financially yeah I guess for the ministry or whatever they can drop a 40% pay cut but probably not so why are we wasting our time so on the one hand the efficiency of being able to find things out on the other hand Karen I agree with you there are other ways to figure that out um and and I don't think the pay inequity should be uh the only motivation for not asking it with glass door and everything else that's out there you should be able to figure out are you paying fairly or not William are you subject to these laws at the moment in depends on what state what what about for you for your company we're in Texas no regulations right it's dependent on where the person is working that you're asking so if I'm interviewing Karen and she's in Seattle I cannot ask right even if she's coming to work here if you can ask do you ask William absolutely why wouldn't you just ask what they what they need to make or what they want to make I have a I have a different agenda than 99% of all people Mak asking that question I'm gathering data on what everybody's getting paid in a sector where there is no gathered data so anytime I can get data I want wa wait I have to tell you something that's that's you know I do the same thing I want to know what the average frame Shop's paying someone so that you're not the only that's try to figure out what so so so here's here's what I think we can reframe this excuse my pun a I assume no all of us will agree this this should help the pay inequity thing and it's an important problem okay no problem okay I I don't have any argument with that I'm just adding it certainly is can be helpful to know what they were making and I'll put up with it because I have no choice the law for my work is a bit of a pain in the butt but I think given what I see and and this isn't even gender or age inequity this is I work largely with nonprofits and their goal is to spend as little money as possible so if I can find out that Lauren's only pulling 75 a year where I was going to pay a 100 I can knock it down to 79 and he feels great I hate that that's ridiculous we we got to stop in a moment but I want to come back to Karen uh after all this back and forth let's I'd like to hear your thoughts on you know can you can you sum up this conversation for us what just the convers ation about uh pay equity and and asking this question what what's your salary history what what what do you take from this conversation oh I think I think it's unnecessary and I think again I can see the difference in that we have there's a lot of data out uh in the in the marketplace about what people in my industry make or what the averages are the trouble is we have all of the big Tech firms who blow it all up right I mean we're we're Amazon Microsoft you know you name it they're all our backyard at Facebook there and they blow up the average salary so what we do is we talk about in that early interview this is the range this is the expectation for the job and then we let them say well that's in my range or out of my range and right away we we go no further or we carry on depending on what they say but I think it's extremely important if we're going to um make a change in Pay Equity to to stop right now asking what people made before it's the number one thing that that shows in the research that makes a difference so we just have to do it let's leave it there we hit a lot of great topics I have a feeling we're going to come back to to all of these uh thank you guys for your time today appreciate it thanks for listening everybody this episode was produced by Jess thubron founder of blank word Productions remember if you liked what you heard tell your friends tell your enemies subscribe like us and best of all connect with us follow us on Twitter at 21h hats and visit us at 21h hats.com let us know what questions or issues you'd like to hear our panel of fearless business owners address see you next time [Music]