On this episode, we speak with expert on salaries and discuss how small businesses can compete for employees by offering more than just money. Also, an experienced CEO and coach to Fortune 500 companies joins us and discusses guiding individuals and teams to success.

Episode Transcript

Intro:

Welcome to the Practical Tax podcast, with tax attorney Steve Moskowitz. The Practical Tax podcast is brought to you by Moskowitz, LLP, a tax law firm.

Disclaimer:

The information contained in this podcast is based upon information available as of date of recording and will not be updated for changes in law regulation. Any information is not to be considered tax advice or legal advice and does not form an attorney/client relationship. Further, this podcast may be construed as attorney advertising. You should see professional consultation for your individual tax and legal situation.

Chip Franklin:

All right, welcome to another edition of Practical Tax with Tax Attorney Steve Moskowitz. Steve, this is funny. I have a good friend of mine I do a podcast for. He's a former major leaguer and he hates the idea of everybody knowing the salaries that major leaguers make. In fact, there's one story about this kid, Lindor, who now plays for the Mets from Cleveland. And he wanted to make 340 million guaranteed, because it was a million more than another major leaguer he didn't like. And we were just talking about-

Steve Moskowitz:

Who could live on 339?

Chip Franklin:

I know. But in an office place, having salaries and talking about salaries around other people, it doesn't make for a very good, I mean, I'm sure you wouldn't want people going around and comparing salaries in the office.

Steve Moskowitz:

It's something that's very personal. And there's all different motivations and people do different things and do different work. And sometimes somebody may have a difference of opinion as to what their work is worth as opposed to a coworker, as opposed to the company. And again, we were talking about the divorce area. This is a volatile area.

Chip Franklin:

It's very volatile. Well, that brings us to our next guest. And Andi Monet, she's an expert in this area. And she's been talking about salaries and she joins us here on Practical Tax. Andi, hi. Thanks for being here.

Andi Monet:

Thank you. Happy whatever day of the week it is today, gentlemen.

Steve Moskowitz:

It's Friday.

Andi Monet:

Friday.

Chip Franklin:

It's always Friday if you have the right attitude. That's my thought. I wanted to talk to you and Steve and I wanted to can kind of go down the road of salaries as it applies to small businesses trying to recruit top employees and top administrators to come and work for them. It's kind of like I talked about with the sports. In baseball, you have the New York Yankees, the Boston Red Sox and the Los Angeles Dodgers. And since there's no real cap, they can get the best players. So the other teams have to battle and show a different reason. What are some of the alternative things that small businesses can do to attract people when they can't match these humongous salaries?

Steve Moskowitz:

Well, first thing I would think of is, what state are you located in? Because if you're in a non-tax state, that can save you a lot of money. California, you're giving away 13.3% of your income, where if you're in Texas, or Florida, or State of Washington, or Nevada, or a number of other places, then the answer is your state income tax is in that state, zero.

Andi Monet:

And that's a really good point, because I lived in California. I was born in California, but I also lived there. But I live in Texas now. And the reason we moved, not me, but actually my ex-husband, who's my best friend, speaking of divorce, we do everything together still.

Chip Franklin:

That's definitely not the norm.

Andi Monet:

It's very unusual, but there's a whole reason for that and I value him. But we moved to Texas.

Steve Moskowitz:

That would make a great podcast, Chip.

Andi Monet:

So many people have asked me to actually write a book about it. It's really funny.

Steve Moskowitz:

The good thing about that is if you have children, that is such a benefit to the children.

Andi Monet:

We do. And that was the reason. Having a safe, stable, loving relationship for our child in common was much more important than what we had agreed on.

Chip Franklin:

It's a tribute to the two of you. It's a tribute.

Steve Moskowitz:

It really is.

Andi Monet:

Thank you. But we decided-

Steve Moskowitz:

And support for the other spouse rather than bad mouthing him.

Andi Monet:

Yes. No, I would never do that. Even if felt that way, because you're bringing in a child into an adult discussion and that's not appropriate. But that's another talk.

Steve Moskowitz:

Okay. I say we have to do more podcasts with Andi, here, Chip.

Chip Franklin:

Our last podcast, it's not part of this podcast, we talked about divorce. But it's not that different than really what we're talking about with salaries, because there's a lot of emotional attachment to that. I mean, I've always had two jobs in my entire life. So if I really wanted to do something, money was always a little second to me. But I've been lucky. Some people are lucky with money. But with salaries, I think about a small business and they want someone to come work for them. And what are some of the things that they can offer that aren't obvious, other than adding another zero to their salary?

Steve Moskowitz:

Well, one of them is lifestyle. Because I remember, for example, there were law firms in New York that were very prestigious law firms and they paid top dollar. But you know what they actually had there? They worked the attorneys so many hours, they literally physically had cots and showers, because they didn't want you to waste time going home. You could have a few hours on the cot and shower up. But do you really want to work there? Because what happens is a lot of those firms, some new attorney will go in there, because of the prestigious name and the salary. And six months later they have medical conditions, and mental conditions, and they don't want to be lawyers at all anymore. And they go away and do something totally different.

Chip Franklin:

Andi, are things like profit sharing or something that a smaller company could add? You can get a piece of the company?

Andi Monet:

Oh yeah, absolutely. There's so many things and some of it is taxable and some of it isn't, which is important to know as a small business owner. I mean, we can talk about when I was 20 we got free soda. That was amazing.

Steve Moskowitz:

Yeah, but that was three years ago.

Chip Franklin:

Oh, look at Steve.

Andi Monet:

I don't wish. I don't know. But in your 50s, that's not quite a benefit anymore. And so there's so many things you can do for people that don't have to do with salary. And maybe this has to do with money, but there's also not financial monetary options. But the financials are vacation pay, and sick pay, and emergency child care in case a parent's sick and has to work and all those sort of obvious things. But the non-financial benefits can also include things like, well, I guess, tuition reimbursement is also financial, but flexible time. Some people start their productivity time at 10:00 AM if you're in a creative, Hollywood, design area. And they're not going to wake up at six in the morning.

Steve Moskowitz:

Another one is being able to work at home. I know right now, after a couple years of pandemic, a lot of people say they don't want to go back to the office. And I'm thinking about people that have small children, where say, your office is an hour commute from your home. And the school calls up and says, "Your kid just broke his leg." "Oh, my God, I got to get to the hospital!" Well, that takes you an hour. Whereas if you're at home with the kid, you can, with an awful lot of jobs, say, "Okay, I'm going to stop work. Why is my child crying? I can attend to that. And then I'll finish up this report later. It doesn't matter." So that's a big one, because working at home, you don't have to spend as much for clothes. You don't have to commute.

Andi Monet:

You don't have to take a shower.

Steve Moskowitz:

If you don't want to. Grow a beard. There were the pandemic beards.

Chip Franklin:

I have one of those. Steve gives me a hard time about it every time I see him.

Steve Moskowitz:

For Christmas, maybe I'll buy you a razor, Chip. But just the fact that you're there for the child. So rather than the child being in daycare all day, you say, "Well, that's not the way..." And again, that's a personal decision, if you have daycare or not. But sometimes they don't want daycare, or they can't find daycare, or daycare isn't affordable. They say, "Well, I'm actually home with my child all day." So that could be a heck of a lot.

Andi Monet:

And also, kind of complementary to that is commuting, not only time and gas and energy, but for people who have... I've seen on some companies' applications, "Do that you have reliable transportation?" If you don't, you don't really need that anymore. It doesn't matter if your car's working or not, at least for working from home purposes.

Steve Moskowitz:

And if you think about it, if you commute just an hour a day, that's 10 hours a week you've saved. That's like working a full day and some overtime on top of it.

Chip Franklin:

Steve, you talk about a lot with small businesses when they're getting going, and we've had people that specialize in software that helps people track the money going in, money going out so they know where they are at any particular time. Or at least they can make a good projection of where they'll be. As small businesses grow and they're hiring people, obviously,