The 3 Pay Rise Mistakes I've Made as a Practice Owner

When Fair Work recently announced upcoming wage increases, I noticed something interesting.

There seemed to be two common responses. Some practice owners went very quiet, while others felt relatively unaffected because they already pay above award wages.

As I sat with it, I realised there was a bigger conversation to be had.

In this episode, I'm sharing three of the biggest mistakes I've made over my 20 years as a practice owner when it comes to pay rises, remuneration, and leading a team.

These aren't payroll mistakes or compliance issues. They're leadership lessons I've learned, sometimes the hard way, about balancing care for my team with care for the health of the business.

In this episode, I talk about:

• Why I used to think a pay rise was the only way to recognise and reward someone
• What I've learned about the difference between recognition and remuneration
• How avoiding difficult conversations can create more stress for everyone involved
• The importance of understanding the numbers before making people decisions
• How pay rises impact far more than just wages
• Finding the balance between leading with heart and leading with sustainability
• Why being a good employer doesn't mean saying yes to everything

One of the biggest lessons I've learned is that good intentions don't pay wages. Healthy businesses pay wages.

This episode is an invitation to step back, look at the bigger picture, and think about how you're approaching pay rises, recognition, leadership and business sustainability in your own practice.

Questions to Reflect On

As you're listening, I encourage you to think about:

• If money is only one part of the equation, what other opportunities for growth and recognition can you offer your team?
• Is there a conversation you're avoiding because you're worried about disappointing someone?
• Are you making people decisions with both your heart and your numbers?
• If you say yes to a pay rise, what might you need to say no to elsewhere in the business?

Connect with Me

If you'd like more support navigating the challenges of practice ownership, I'd love to welcome you into our community.

You can learn more about The Connection Co and the Allied Health Connection membership at:

The Connection Co

Because building a good allied health practice isn't about choosing between smart and heart. It's about bringing both together

Mentioned in this episode:

Pay Rises without Panic [Free Webinar for Allied Health Practice Owners]

A calm, free practical session for allied health practice owners navigating the recent 4.75% wage increase and wanting to make pay decisions they can confidently stand behind. 29 June | 12pm AEST | Live via Zoom Save your seat here: https://theconnectionco.com.au/pay-rises-without-panic-free-webinar/

Foreign.

Welcome to My Good Allied Health Practice, the podcast for allied health business owners who are looking to bring smart and heart together on their journey.

On the podcast, I'll cover things about being vulnerable and brave, pivoting failures, good wins, things that work, things that don't work, and I'll talk with other practice owners who are doing good in their journeys.

I'm Amy Geach, practice owner and mum, and I'm here because I believe in you.

So let's go forward on this journey together.

Welcome back to My Good Allied Health Practice.

It's great to be back.

This is season two and we are right at the start of season two.

And I didn't actually plan today to record an episode about pay rises, but recently Fair Work have announced quite a significant increase in the Health Professionals and Support Services award over the next couple of years.

And on top of that, we've also got the normal increase to minimum wage coming up shortly in a few weeks at the time of recording this.

And I wanted to just start conversations around it because with this announcement, I've only really kind of seen two ways people are showing up around this topic.

The first way is just a general quietness.

People are not really saying much and my worry is that people are carrying a little bit of quiet worry in themselves and we know what that's like.

We know the burden that can bring to our mindset and our ability to confidently lead our teams forward.

So as well as this quietness, I've also seen people, or heard people refer to the fact that they're already paying above award wages, so they'll be fine.

And yes, a lot may be fine.

Absolutely.

I pay above award wages and so hopefully I'm going to be fine too, but I think it's still worthy of a conversation.

And so I'm here today for the quietness those sitting in that quiet space.

And I'm also here today for for those who might be dismissing is not the word, not dismissing it because they're already paying above award wages, but maybe not giving it the holistic approach it needs.

So I'm here for both of you because I want to make this a louder topic.

I want us to be talking about this more because what we're paying our teams just has so, so much intertwined emotion and strategy behind it all because we've got to get it right for the business, but we've got to get it right for our teams as well.

And creating that balance can be tricky.

So I think we need to be talking about pay rises more so that's why here I am today.

I'm talking about it because I thought there'd be more chitter chatter after fair work, made these big announcements and there's not.

And look, it may be because there's so much else going on at the moment and people are just so busy and everything's feeling, you know, tight and there's a lot of pressure.

Maybe we just don't have the brain capacity to go there right now.

So let me kind of break it down a little bit for you, because what I want to do today is talk about three pay rise mistakes that I have made as a business owner.

Now, when I say mistakes, I'm not talking about payroll errors or legal mistakes or anything like that.

I take payroll really seriously in my practice and I always have.

Before I put my very first staff member on, I took myself off to night classes at TAFE to do my cert for in Human resources because I wanted to get it right.

So.

And that was, you know, way back in the day, 20 years ago, I went and did that, and because there wasn't any education around about what to do and how to employ people and how to get it right.

So I want to talk about mistakes today.

But as I said, they're not.

They're not payroll errors, they're leadership mistakes.

And the things that I've had to learn, sometimes the hard way, about how we balance caring for our team, which is really important for me, but also with caring for the health of our business.

And probably earlier on in my practice, I didn't have that balance right.

I was tipped more towards caring for the team and it did jeopardise the health of the business over time.

So I want to talk about things a little bit today, and if you're like me, you didn't come into Allied health practice ownership because you're really passionate about remuneration frameworks or wage structures.

I know you probably became a practice owner because you wanted to help people, you wanted to create opportunities, you wanted to build a workplace where people can enjoy coming to work and do meaningful things.

And sometimes that makes conversations about money surprisingly emotional.

So today, let's get into it and I'm going to share my three pay rise mistakes I've had over the years and what they've taught me.

So mistake number one was when I thought that a pay rise was the only way to recognise someone.

So back in the day, I had this simple view of recognition.

It was pretty simple and it was based on what I had been exposed to in my career as well, and it was around the fact that if somebody was doing a good job, they deserved a pay rise.

If somebody was growing their role, they deserved a pay rise.

If somebody was working hard and that, you know, they came on board and had that really good work ethic, they deserved a pay rise.

And whilst there is definitely some truth in that, what I didn't understand back at that time was that recognition and remuneration are not exactly the same thing.

And I remember wanting my team to feel valued.

I wanted them to know I appreciated them, I wanted them to stay with me, and I wanted them to enjoy working in the team and working in my practice.

And often my brain would jump straight to money as that solution.

And what I've learned over time is that pay is only one way people experience value at work.

Because during my time as a practice owner, I've seen team members absolutely flourish when they were given mentoring opportunities.

I've seen people's faces light up because they were trusted with a project.

I've seen people grow and develop because we gave them leadership, responsibilities or flexibility or an education opportunity or just simply more autonomy in their role.

So some of the most meaningful moments in my own career, when I reflect back, weren't linked to a pay rise at all, which is really interesting.

They were linked to situations where somebody might have been believing in me, somebody was investing their time in me or giving me an opportunity to grow and learn.

Now, please don't misunderstand me here, because pay does matter.

People need to be paid fairly and appropriately for the work that they do.

But I think one of the traps I fell into was believing that if I couldn't offer more money, I had nothing else to offer.

I really was just looking past all the other value that we were providing in the workplace, and it just simply wasn't true.

There was definitely more on the table in terms of value that I could offer.

And I think as employers, we have many different ways to recogn contribution and growth.

And so one of the questions I'd encourage you to think about is this.

If money was only one piece of the puzzle, what other ways could someone grow inside your practice?

Okay, let's move on to mistake number two, which is avoiding difficult conversations because I didn't want to disappoint people.

This one feels a little uncomfortable to admit, but I'm suspecting many people listening will recognize this in themselves as well.

For long time, I wanted everybody to be happy, and I took that very seriously.

And I put a lot of responsibility and pressure on myself to try and keep ensuring that was happening.

I really wanted my team to feel supported.

I wanted my team to like working with me.

And because of that, there were times when I delayed conversations that I should have had much earlier, and they weren't because I didn't care.

But.

But I understand in hindsight that is how it probably came across.

But actually it was the opposite.

I cared so much that I didn't want somebody to feel disappointed.

And maybe you've experienced this too.

It could be that a team member asks about a pay rise and maybe you weren't expecting it, or maybe a promotion or additional hours or a change in their role.

And you know you need to have that conversation, but there's something in you that pulls you away from it and you put it off because you're not quite sure what to say.

So you wait and then you wait a little longer.

And while you're waiting, your anxiety or your worry about it grows.

And then the person that's asked you or approached you, their anxiety grows too.

And what I've learned is that avoiding these conversations rarely makes it any easier.

Usually it just means two people spend longer worrying about something.

Now, I'm definitely a big believer in you need to give yourself space for the answer.

So you don't need to immediately have a response, but you need to put a time frame on your response for yourself.

And I think what I've learned from this is one of the biggest lessons is that kindness and agreement are not the same thing.

You can value somebody really deeply and still say no, and that's okay.

You can appreciate somebody enormously.

I have so much appreciation for my team and sometimes I still have to say not yet.

And you can care about someone and still make a decision that protects the longer term health of your business.

That's a really important decision to make as a leader.

And getting that balance right that I was talking about right at the start, the balance between caring for your people and the balance between caring for the health of your business.

And I think that is one of the hardest parts of leadership and being a practice owner with a team.

And often it's not because we don't know what to do, but it's because we know someone might feel disappointed.

Yet having that honest, respectful conversation is far kinder than avoiding it or putting it off.

And I think one of the biggest moments I used to put it off was when somebody was asking for a promotion or, you know, they had a vision for where they wanted their role to go, and maybe the business just wasn't there.

Yet.

And it was a conversation back in the day.

I was just so delayed in getting to it because I was trying to work out how to make it work so they weren't disappointed when really I was actually disappointing them anyway by not being proactive about that conversation.

So I think if there is one question I would leave you with here, it's this.

What conversations are you currently putting off because you're worried about disappointing somebody?

And if there are those conversations there, I want you to put your leadership hat on and take a step forward and plan when that conversation is going to take place.

Okay.

My mistake number three is making people decisions without fully understanding the numbers.

Now, this is probably one of the biggest lessons that I have learned.

Earlier in my business journey, I often approached people decisions like pay rises from the heart.

Now that's not a bad thing.

I actually think leading with heart is one of the strengths many allied health business owners bring to the business world.

And I love it and I think we should lean into it.

And it's one of the reasons I practice and teach smart with heart business ownership.

But the problem happens when we lead only with the heart and we don't bring the numbers along with us for the ride.

And over time, I've realized that every pay rise, every single one, sits inside a much bigger picture.

It sits inside your profit margin, it sits inside your pricing, it sits inside productivity and capacity, and it sits inside your future plans for growth.

And if we don't understand those things, we often make decisions when with incomplete information, like doing an assessment with a client and only focusing on one small part and not looking at it holistically.

One of the phrases I come back to often is that good intentions don't pay wages.

Healthy businesses pay wages.

If we want to continue creating employment opportunities and supporting our teams and investing in professional development, which I know a lot of you do, it's a really important, fundamental thing to try and provide and it's not in the award.

But I know a lot of practices aim to provide that and continue serving our communities.

The business itself needs to be healthy.

And what can happen over time when you're making decisions from the heart to keep supporting your team members with additional pay rises.

The first one can be okay, the second one can be okay.

Maybe somebody else asks for a pay rise, that one's okay.

Next thing you know that kind of has a bit of creep and that can creep along and you'll find yourself then starting to feel the pinch.

Right?

Because not only have you got the hourly rate going up, but You've got their superannuation going up.

The tax obligation that you need to pay to the ATO is suddenly higher as well.

Maybe the professional development has gone up as well.

So things are starting to pinch.

And if you haven't adjusted the income coming into the practice to accommodate for pay rises as you go, it can definitely impact the business.

And then over time your ability to create great employment opportunities and support your team the way you, you dreamt of starts to decline.

And it's not a great feeling.

I went into my practice and started up and when I first put employees on, I was like, I'm going to be a great employer.

I am going to be a great employer.

That's, that's my goal.

I want this to be such a great place to work.

I always, you know, going to focus on happiness and, and I tried so hard to do that.

And we did some amazing stuff.

We have done some amazing stuff and I'm really proud of it.

But as the pay rises go on, if I'm not looking at the numbers with that, what happens is I kind of stitch myself up and I'm not able to do all the other things, all the other non payroll things that add value to a workplace because everything's feeling tight and compressed.

So that is why bringing the numbers along with you is so important.

And it doesn't mean becoming cold or saying no all the time or being profit obsessed.

It just simply means understanding the reality of the situation that we are working within now.

When somebody asks for a pay rise, I definitely now will look at the bigger picture than what I did years ago.

I looking at what is their contribution, what growth have they demonstrated?

What does a business currently need?

And what does a business currently have capacity for?

Right, that's really important.

What does it have capacity for right now?

And if you can't afford it, you can't afford it.

And then what are the future plans?

I also want you thinking about how sustainable a decision is not just today, but in six months or 12 months from now.

Because ultimately a pay rise isn't really a payroll decision.

It's a business decision and it's a leadership decision.

And one of the questions that I will often ask myself now because I've learned that if I'm not adjusting things to afford the pay rises, then other stuff's got to give.

And I touched on that just before.

So the other things I want to put in place to make the, to make my practice great to work at, I don't want them to suffer either.

So if I'M putting pays up and I'm not adjusting any income coming into the practice to accommodate that.

The question I have to ask myself is what am I prepared to say no to?

So if I'm saying yes to a pay rise, what am I going to say no to?

Because something has to give, right?

If you've got the same amount of money coming into the practice and you're giving a pay rise, something else somewhere in the practice has to give.

So I will often ask that question to myself.

If I'm not adjusting the income, what else am I saying no to if I say yes to this pay rise?

So these are the things I've been reflecting on since Fair Work have announced the pay increases.

And I think pay rises are rarely just about pay rises.

They're about our teams wanting recognition.

They're about growth, they're about communication, they're about leadership, and they're about understanding your numbers really well.

And they're about finding that sometimes tricky balance between caring for our people and caring for the sustainability of the business.

Like it just comes to the forefront.

It's one of those areas that really highlights that balance.

I really want to reassure you that being a good employer doesn't mean you have to say yes to everything.

It means making thoughtful decisions that allow both your people and your practice to thrive.

Because those two need to go hand in hand.

And sometimes that decision is yes, and sometimes the decision is no, and sometimes the decision is not yet.

And all of those three can be really good acts of leadership.

Now, if the recent Fair Work announcement has had you sitting quiet or worrying, or maybe you've overlooked it a little bit and you need to dive in and have a look at your numbers and have a look at the balance that you might have in your practice right now.

Take this opportunity just to have a mull over it.

Even just for the next 10 minutes.

Just take a little quiet moment to think about how things are feeling right now in your practice around this area.

I've loved being back for the start of season two.

I hope that you have found that helpful and can't wait for you to join me for my next episode.

Thanks so much.

Thank you for being here.

I am incredibly grateful.

If you have a friend that would find this helpful, please go ahead and share it with them too.

You can learn more about me and how to be part of my Allied Health Connection community [email protected].