By Peter Lyle DeHaan, PhD
Long ago, perhaps in graduate school, I read a management guru who advocated that a company’s highest-paid employee should ethically make no more than seven times the lowest-paid employee. Of course, I can’t find that source now, but I remember it well.
For a telephone answering service, the two people at opposite ends of the wage scale are the owner/president/CEO and an entry-level operator. With the federal minimum wage in the United States currently at $7.25 per hour – and yes, there are sadly some answering services that still pay minimum wage – that projects to a top annual salary of around $105,000 a year. Of course, it doesn’t need to be that high, but it can be.
How close does your answering service come to meeting this paradigm of no more than a seven-fold wage differential? Maybe it’s time to re-examine pay rates: decrease yours, increase theirs, or do both.
While I’ve met TAS owners who barely scraped by, some effectively making less than minimum wage for their endless hours of work, I think those players have all left the industry, either due to the sale of their business or its closure. Left are the viable players, the serious business people who run great organizations and enjoy success. Many of them work diligently to maximize their paycheck, while at the same time remaining convinced they must pay their front-line staff as little as possible. “It’s the economics of the industry,” they say.
I don’t agree.
What happens when the minimum wage goes up? Some states and cities already have, and answering services in those areas has adjusted to a higher starting wage. With talk of $12 to $15 dollars an hour, the low-paying answering services will be forced to make changes, too, or go out of business.
Get ahead of what is bound to come. Start increasing what you pay your answering service operators. But here’s a hint: Don’t pay more for the same caliber of employee. Pay more and expect more. Everyone wins.
Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of TAS Trader, covering the telephone answering service industry. Check out his book How to Start a Telephone Answering Service.