November 9, 2022

“Brew Unto Others” A Discussion on The Living Wage vs. The Passion Tax

Community Conversations Takeaways

Yards Brewing Company

By: Kathy Wagner and Gabe Buckley

The issue seems to be universal—not just one industry, one area, one job classification; it manifests itself differently, with union organizers engaging staff, groups of disgruntled employees making demands, inflation compounding on the Great Resignation, and more. Inequity in wages is challenging and frustrating for leaders who sincerely want to compensate their team equitably, as well as workers who struggle to make ends meet, buy a house, or pay their rent.

In general, the broadest takeaway is that compensation decisions need to consider many factors that are highly specific to local markets. These include local labor market dynamics, organizational structure and funding sources, local living wage considerations, and even specific dynamics unique to your staff. The specific takeaways below summarize the topics covered in the webinar, but we recognize that your organization faces a unique set of circumstances.

Check out the takeaways below, then see the final section for a quick look at how we work with an organization to help develop compensation strategies. We’d like to thank our panelists Mike Weilbacher, Executive Director, Schuylkill Center for Environmental Education; Maylon White, Division Director, North Carolina Aquariums; Tom Kehoe, Founder and President, Yards Brewing Company; and Kara Newport, CEO Filoli for sharing their challenges and insights.

What we heard about the issue:

  • Not surprisingly, COVID took a toll: employees dealt with “mask rage” from guests, increased workloads due to furloughs and the “Great Resignation” (or “Great Negotiation” as some in the room dubbed it). The “Great Resignation” may have been extended or exacerbated by inflation, which continues to set records.
  • Maylon and Kara described the cost-of-living challenge in their locations; Maylon, with the North Carolina Aquariums’ teams spread out over four sites on the coast (who doesn’t want to live at the beach!?) and Kara, for her team at Filoli in California’s Bay Area, with its staggeringly high cost of living. Maylon’s efforts at increasing salaries are hindered by his governance structure—Aquarium employees are state employees, and salaries are determined by the legislature. Kara’s turning point for this issue was Filoli’s goal of “attracting and retaining a talented team”: their 2019 attrition rate of 50% made it clear that drastic action was needed.
  • Mike shared his “most challenging summer ever” at his Environmental Education center, with camp counselors quitting after one week, fallout from “the Great Resignation” of full-time staff, and a challenging business model (the Center and its grounds and trails are free, with fees for events and programs), and noted that a staff and board team have gathered to talk over staffing issues and seek solutions.
  • Based in Philadelphia, Tom’s Yards Brewing Company had people on their packaging line and brewers who loved their work and wanted to stay with the company but couldn’t afford to work there. Members of a union told employees they could solve their problems, but Tom saw a different approach: he invited his team “inside the business” and conducted individual personal interviews—not performance reviews, but conversations about their goals and what would make their jobs better. He quickly found out that his young team was really interested in the company and wanted to learn more.
  • Salary equity is inextricably interwoven with social equity; low wages and layoffs often affect entry level employees who tend to be more diverse.

Some possible solutions:

  • Transparency in communication helps; giving Yards employees a deeper understanding of the company, including their financials, helped them understand more and realize that they weren’t being taken advantage of. At the Schuylkill Center, Mike is involving all employees in developing their team’s budget from the ground up, giving everyone insights into the budgeting challenges.
  • Personal conversations with individual employees at Yards helped leadership learn more about the individual’s goals and how the company could make their jobs better.
  • Compensation assessments can be a useful tool, but consider what your benchmarks are—within your field only, market-driven, or a regional scan that includes all types of businesses? As one of her board members remarked to Kara, “If you are only benchmarking with like organizations, aren’t you tacitly agreeing to underpay your staff?” (For the record, when Canopy conducts a compensation analysis, we look at benchmarks inside your industry and outside your industry—see final section.)
  • Consider using a living wage calculator as your base as opposed to minimum wage. (In Filoli’s region, minimum was was $18/hour; “a living wage” was $28/hour.)
  • Don’t undervalue what you provide: review your pricing structure to gain revenue to invest in your people. And while you’re increasing prices, develop strategies to increase access for all such as discounts with EBT cards, dynamic pricing, and more.
  • Remote work can be considered a benefit for some employees’ compensation plans, though there are complex considerations when offering remote or hybrid positions.
  • “Brew unto others” is more than a company motto or a tagline, it’s a way of life for Yards employees. They believe in “working hard, having a good time, and giving back” which is reflected in their worklife and community engagement.
  • Try doing “stay interviews”—ask your people why they work there and what keeps them there; look at who’s leaving and ask why.
  • Sometimes the investment is huge, but the payoffs are too: Kara’s plan meant a $2 million investment over two years—permanent change and permanent risk—but with a drop in attrition from 50% in 2019 to 8% in 2022.

How we can help:

As we saw in the webinar, no one has all the answers—including Canopy! What we do have is a broad base of industry-specific experience, access to data and analysis tools, and the time to conduct a proper analysis. In other words, we focus on the tedium of gathering and processing the data so you can focus on the bigger picture.

Looking at all of the above problems and solutions, one thing is clear—every organization needs a strategy that is specific to their unique industry, market, and organization. Some organizations simply need to re-align wages with local wage increases, while others need to completely re-evaluate their business model to stave off attrition and build a stable employee base.

Whatever your needs, Canopy can craft a custom plan to help you get the data you need to make an informed decision. If you’re looking to get very granular, region- and industry-specific data, we can even help craft, distribute, and analyze a compensation survey of benchmark organizations. We can also help plan staffing needs, build projection models of future wage strategies, and facilitate integrated Strategic, Master, and Business planning for organizations of all sizes that are building a comprehensive strategy for the future.

View the full webinar recording.

Photo of Tom Kehoe, President and Founder of Yards Brewing Company, courtesy of PhillyVoice.

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