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Transparency (and context) for agency teams

With New York City now mandating pay transparency for job listings, the agency community is taking a closer look at what transparency means and how transparent they should be with their teams — whether or not it is required by law.

The conversation among agency leaders usually centers around how much they should share, but in this episode you hear from Marcel Petitpas of Parakeeto and Chip Griffin of SAGA about why it matters just as much how you share that information.

Educating your team about financial information and providing context helps to avoid incorrect assumptions, but it also puts them in a better position to provide the insights and assistance that will help you and the entire team achieve your goals.

Resources

Key takeaways

  • Chip Griffin: “If you’re going to have transparency, and I’m certainly an advocate of it, it needs to come with education. It needs to come with context.”
  • Marcel Petitpas: “The level of transparency that you can have with your team is directly related to the amount of investment you’re willing to make in educating them on the business model. You decrease the risk that they’re going to misunderstand, and, on the upside, start to understand how the business works.”
  • Chip Griffin: “We also have a tendency to believe that we can keep more secrets than we can. I hate to break that news to you, folks, but the chances that your employees are not in any way communicating with each other about what they’re making is pretty small.”
  • Marcel Petitpas: “It’s not surprising that agency owners don’t understand this stuff. It’s very hard to find the information, and a lot of the information on the internet is frankly flat out wrong.”

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Small Agency Talk Show. I’m your host, Chip Griffin, the founder of SAGA, the Small Agency Growth Alliance, and I am delighted as always to have with me a great panelist today. It is Marcel Petipas of Parakeeto, a frequent guest on this show. Thank you for joining us, Marcel.

Marcel Petitpas: Thank you for having me, Chip. It’s always a pleasure to hang out.

Chip Griffin: It, it is good to have you here and, and I’m, I’m glad we’re working on a real internet connection today and not having to use your phone because the last time you were on this show, you had, you had dealt with a little bit of a hurricane in your neck of the woods in an unusual place to see a hurricane.

Marcel Petitpas: Yeah. Yeah. All the way up the east coast. Usually they, they just slap Florida like it, you know, about a week after it hit us, Florida got hit even harder. But, yeah, that was the biggest storm in Canadian history. Hit us on the East coast and yeah, we didn’t have power for over a week. It was, it was interesting, but everything’s good now and I’m glad to be back.

Chip Griffin: Well, we are glad that it’s all back and we’re, we’re glad that we’re working on a, a real professional internet connection today. So, that’s gonna give us an opportunity to spend the next 30 minutes talking about something that you and I enjoy talking about. And in this case we’re gonna talk a bit about transparency, how to do it correctly, how to educate your team when you’re making decisions and how this can make you more efficient.

So we’ve got a whole bunch of different themes that we’re gonna explore over the next 30 minutes, but before we do, if, if someone’s interested in connecting with you, where can they find you online?

Marcel Petitpas: Yeah. Great. We’re, we’re at Parakeeto.com and if you want to grab some free stuff that we’ve created, parakeeto.com/blog or /toolkit.

And, yeah, Parakeeto, we help digital agencies measure and improve their profitability. I’m also on LinkedIn as Marcel Petipas. I’m wearing the same shirt with birds on it. Not hard to spot, so feel free to connect there. I’d love to hear from you.

Chip Griffin: But you do wash that shirt, right? I mean, I know you’ve got that shirt on a lot, but it does, it does get washed.

Or do you have more? More than one of them?

Marcel Petitpas: They all get washed, and I do have three of them.

Chip Griffin: You have three of them. Okay.

Marcel Petitpas: My wife will tell you this is a, a statistical anomaly, but somehow I haven’t stained any of those three shirts in the last three years, which, you know, it’s very strange for me.

Chip Griffin: That is, that is an accomplishment because I, I stain most shirts like the day after I get them.

So, and just, you know, hope that nobody notices. I’m a slob. What can I say? All right. Enough of that, nobody really cares about our shirts and our staining tendencies, or lack thereof. They do care about how they can make more money as an agency, they do care about how they can make their teams more efficient.

They do care about how they can retain employees better, and one of the reasons why I thought this would be an interesting topic this week, apart from the fact that it’s something you and I like to nerd out about a lot. Is the fact that New York City just implemented a pay transparency law when it comes to new hires.

And so, with a lot of agencies having a presence in New York, whether they’re based there or they have an office there, it’s something that the whole agency community, including small agencies, are gonna have to start to wrestle with a bit more. And so the New York City law requires that when you’re advertising a job opening, you publish the salary range for that position and you make a good faith effort to say that this is the, the range that you’re looking to hire at.

And so this is going to have potentially a spillover into the agency community about how much do we share about pay, how much do we, and it’s been an ongoing issue for small agencies that are privately held. How much do we share about how we make money and how much money we make and how much revenue we have.

And all of these things are in the mix. So, I’d like to explore with you sort of what the best practices are for transparency and the advice that you give your own clients when you’re talking to them about how much they should share and how they should do it effectively.

Marcel Petitpas: Yeah, obviously, a really great question.

One that I’m sure we’ll spend, all 30 minutes unpacking. But from my perspective, you know, I hear the fear around this a lot. You know, agency owners holding things close to their chest, and when I dig into that fear, most of the time it comes from the fear of their team misunderstanding things, right?

I, I don’t think many agency owners are afraid of their team knowing how much money they make, because frankly, most of them are not making much money at all. And so I, I don’t think that anyone would find their profitability egregious, if they knew what it was. But the fear is that they’re gonna see some small amount of the books or they’re gonna see one number and not understand it in context and then believe that the agency owner is being, is acting in bad faith, is taking advantage of them, is, you know, making an excessive amount of money relative to them. And for that reason, they decide to hold the cards close to their chest.

And from my perspective, there’s kind of this, this canyon of education that comes with becoming more transparent about this. Because it’s, it’s somewhat of an all or nothing thing. Now we could talk about some ways to become more transparent and utilize certain types of metrics that limit the amount of exposure that you have to give all at once to your team.

But, to me, it’s like the level of transparency that you can have with your team is directly related to the amount of investment you’re willing to make in educating them on the business model so that you decrease the risk that they’re gonna misunderstand this and actually on the upside start to understand how the business works.

So they’re more empowered to actually be stewards of its health and profitability and be collectively involved in the pursuit of initiatives that create upside for them in terms of their career and salary growth.

Chip Griffin: Well, I think you hit on a key issue there, which is that if you’re going to have transparency, and, and I’m certainly an advocate of it, if you’re gonna have it though, it needs to come with education.

It needs to come with context. And frankly, you should be providing that education and context, even if you’re not being transparent or fully transparent or partially transparent or whatever with your team. Because the more they understand about how the business operates and functions and what leads to success, the more that they can contribute to it.

And, and here’s the thing: I know a lot of agency owners are reluctant to share information, particularly in a small business, you know, and you just, you feel like, you know, I just don’t want them to know how much I make. Here’s the thing, most of your employees think that you make far more money that you than you do, and work far less than you do.

That’s just the, and in a small agency, in any small business, they know a lot more of the business than you think they do. Because it’s small and, and they just can’t help but pick up little tidbits here and there. And so they then jump to conclusions. So my view is it’s better off for you to have a plan to systemically provide this transparency and the education that comes with it, as opposed to letting it come out in dribs and drabs accidentally.

Marcel Petitpas: Yeah. Yeah. And I think anybody that’s been in PR or does any kind of PR is gonna understand this idea of taking control of the narrative. Because I mean, we see this all the time with little things, even like time tracking. If you tell your team, Hey, you gotta track time, but you don’t accompany that with a consistent, repeated story that’s followed up with action about why you track time and how that time’s gonna be used, et cetera, then the team will start to create their own narrative.

And it’s often not a good one about why you’re tracking the time and how you’re using it. And that you’re looking over their shoulder and that they have to get to 40 hours a week, even if that’s not actually how much time they spent doing things so that they can stay out of trouble. And you know, this applies to lots of different things.

So completely agree with you. And for full transparency with everyone. Now we have the advantage of having a very small team still. But yeah, we, we are completely open book. Everybody knows how much everybody else makes. And what’s been interesting about that is, like we have an employee that, for example, tried to turn down a raise because he wanted my founder and I, my co-founder and I to get paid more first. He felt badly about how little we were paying ourselves relative to the market. And you know, that’s kind of ridiculous. We, we ended up getting him to accept the raise that he very much deserved. But those kinds of things might surprise you.

The types of things that your team talks about or thinks about or engages in once they are actually enabled with the information to fully understand what’s going on.

Chip Griffin: Yeah, and, you know, we, we often don’t give our team enough credit for how they will react to certain information. We also have a tendency to believe that we can keep more secrets than we can.

And so oftentimes someone will say, Well, you know, I don’t really want Sally to know how much Jane is making because you know that that might create some tension. Well, first of all, there’s a pretty good chance that Sally knows what Jane is making. Yeah, I, I’m just, I hate to break that news to you folks, but the, the chances that your employees are not in any way communicating with each other about what they’re making is pretty small.

Most organizations I’ve been in, you know, when I was a junior employee, we had a pretty good sense as to what everybody else was making. Maybe not to the penny, but at least within, you know, certain parameters. And so it’s important when it comes to pay transparency, whether you go completely open book, which I think it’s, it’s a legitimate debate whether you want to go completely open book or you wanna share at a, at a broader level.

And that’s fine. I, you know, everybody has to find their comfort level. But if you’re going to be doing any kind, if you have more than one employee, you need to have some sort of a pay structure in place so that whether you tell them, or whether they find out from someone else there’s a good logical explanation for why different people get paid different things. Which means you can’t have two people with the same title who get wildly different salaries.

And so as a starting point, you need to make sure that there’s some consistency. If you’ve got a senior account executive, they should be in the same general salary range as every other senior account executive that you have. And if you want to pay someone more, give them them a title bump at the same time so that it’s, it’s obvious when you have, when someone comes to you and says, I can’t believe Sally’s making more than me.

Well, Sally has a larger title than you. Right? So it becomes an easier explanation if you have to get there.

Marcel Petitpas: Yeah. And I, I think I want to acknowledge that there’s a very legitimate domino effect to this, which I think is where a lot of this fear comes from. So to your point, right, this idea of having defined roles, and salary bands for each of those roles, that’s a project that most people have not done.

So sitting here today, if they said, Okay, we’re gonna expose everybody’s salaries, it’s like, Well, we don’t actually have it written down anywhere, exactly what these different roles are and what the difference is and what the progression and the, the criteria for graduating from one to the next is. This is all work that has to get done.

And similarly, the inertia around commercialization training for the team. Most of the agency owners that I talk to are not comfortable with their own business model and don’t fully understand the numbers. So of course they’re not exactly excited about the idea of now having to explain this to their team.

So there is, there are a lot of very legitimate roadblocks to doing this or that that might be like leading to the fear that pushes owners to then say, You know what? The easiest thing to do is for me to just try to keep all my cards close to my chest so I don’t have to deal with any of this stuff. Because frankly, it never feels like the right time to deal with this when, you know, certainly there’s client work to do and all the things that we know plague the agency owner from day to day.

Chip Griffin: Well, I, and I think the more that agencies think about these issues when they are small and just getting started, the more helpful it can be because a lot of these things become difficult to change later on. I’ve been involved with a lot of small agencies that maybe have, you know, five employees. So they’ve got the owner and then they’ve got four people who all have the title of Vice President.

Because you’re like, why not? You know, titles don’t matter. And, and look, when I was younger, I, I had this philosophy too. Titles are, because I never personally cared about my own title. To me, it was about the work that I was doing and title, except to the extent that it communicated something to the outside world that I needed in order to be effective at my job just didn’t matter. But at the same time, if you don’t think about these things and you have title inflation within your small agency, it becomes really difficult to fix it as you go from five employees to 15 to 25, because now you’ve got to unwind that. And I’ve worked with midsize agencies going through this where they’re trying to rationalize their salary structure and it becomes really difficult when you’ve got, you know, wild title inflation or maybe title deflation in some areas, because maybe you’ve got a 10 person team and someone saw titles for one group and someone saw titles for the other and they have two different philosophies. It’s a real problem. So think about this from early on, if you want to be effective.

Marcel Petitpas: Mm. Yeah, a hundred percent. And again, it, I think so much of this stuff comes down to intentionality, and I understand how and why it happens, but so many processes and, and titles and job roles and, you know, all kinds of things, targets and metrics get created on the fly ad hoc to solve a problem that in the moment it seems like it makes sense, but doesn’t really make sense in the broader context of the business.

And there’s just a lack of thoughtfulness a lot of the times to how an agency is designed and built over time. And that comes from the frantic nature of that execution when it’s being done off the side of your desk as the owner or off the side of your team’s desk, as people who are already slammed with client work and now have this other thing they have to take care of.

So I see why it happens, but it doesn’t change the fact that this often is creating a lot of problems that keep coming up, that keep burning you, that create these, these large projects that come back to haunt you when, you know, the piper comes calling and the laws change and now you have to deal with it.

So there’s something to be said about trying to, however you do it, protect time. To sit down and, and just be thoughtful about these things. They’re not actually that hard to solve, and to your point, the earlier you do them, the better. But they just require some thoughtfulness. And being able to have the presence of mind to zoom out and think about the broad context of the business when you’re designing what these roles and titles and team structures are, and the targets and how much you know your rates are compared to what people get paid and all that kind of stuff.

Chip Griffin: And so, you know, we’ve talked a bit about transparency when it comes to Sally and Jane comparing their salaries. But the other area where employees compare their salary is to how much you’re charging clients. And, and we’ve, we’ve touched on this just a little bit so far, but let’s, let’s dive a little bit deeper on this because this is a problem that I see frequently with agencies where you’ll have someone who is doing most of the work on an account and they find out how much that client is paying the agency. And they say, I can’t believe this agency is paying, or this client is paying the agency this much and I’m only making you know this much. And, and part of this comes about because they don’t, or most of this comes about because they don’t have the additional context and education that they should have been provided to understand why there is not a one for one relationship.

And when you don’t have it, you can lead to a situation where someone will leave and try to go out on their own because they think if the, the client is paying this much, I should be able to make that much myself because I’m the one doing most of the day to day work. So, So talk to me a little bit about this and how do you work with, with clients to understand this and to educate their team appropriately?

Because I think this is probably, this is probably an even bigger issue than employees comparing salaries to each other. Because as much as someone may say, I’m not gonna tell you how much this client is paying, at some point they find out, because the client’s on a call and they say, Look, we’re paying you $10,000 a month, we expect more.

And so now they’ve, all of a sudden the employee has found out how much the, the client is paying. So my view is tell them right up front, this is how much they’re paying. This is the scope of work, but how, how do you think about this? And how do you help employees understand that their salary and the fee paid are not the same?

Marcel Petitpas: Yeah. So, it’s so funny you, you bring that story up because it, it’s one that I’m sure we’ve both heard lots of times and some of our listeners might actually be that young and energetic person that quit an agency for that reason and then ran face first into the reality of that’s not at all how it works and survived.

And now they’re here as a successful entrepreneur looking at their own team wondering, Hmm, I wonder if anyone’s gonna, you know, basically be me back when I was that age thinking in that way. So, Let’s start with the difference between, first of course, like gross margin and net margin. That’s a concept that evades a lot of people.

And I think we also see this come up in terms of like when employees want a raise or they start comparing their salary to what they could be making somewhere else, like on the brand side or at different agencies and not really understanding some of the fundamental constraints of the business model.

So you should be able to earn about three times more revenue for a producer than what they get paid, right? So if somebody gets paid a hundred thousand dollars, if they’re not bringing in $300,000 in earned agency gross income in a year, then you probably have a gross margin problem. It’s gonna be very difficult for the business to be profitable at all if that’s not the case.

So you’re generally aiming for that, you know, 60, 65% margin on a per person basis. And the reason for that is because on the profit and loss statement, like if you’re not above a 50% gross margin, or I call it a delivery margin, and you know, we could go into the exact definition. But anyway, accountants call it gross margin most of the time it’s not actually gross margin or it’s, it’s whatever their general accounting practice version of it is, but it’s not appropriate.

But the bottom line is gross margin is important and we need to have enough of it because as you know, as the agency owner, then you gotta pay to run the business. You need administration salaries, you need sales and marketing salaries. You have to pay to acquire customers, your lawyers, your accountants, the rent.

I mean, I had one employee reach out to me after he saw how much we paid to accept money through Stripe. He was like, Did we really pay that much money to Stripe this year? I’m like, Yeah, that’s what it costs us to get paid. And so he’s like learning all of, all of these expense. He’s like, I can’t believe how expensive all this stuff is, and like all these things that we have to pay for and QuickBooks and our lawyers, and it’s like, it, it seems like it never ends.

It’s like, yeah, it, it, it doesn’t, it’s really expensive and, and easily 30%, usually between 20 and 30% of all the revenue that you bring in goes to running the business. So unless you have 50% gross margins, every time that you earn a dollar of revenue, there’s really not that much room left to pay that other 30% to run the business and then have some profit left over.

And I think everybody on your team would agree that it’s appropriate for you as an owner to make a profit 15, 20, 25%. I don’t think anyone’s gonna find those numbers egregious. Like think about the risk, the sacrifice, the time you put in. That, that’s a perfectly reasonable amount of compensation on the top line for being the person that created this business.

And if somebody doesn’t agree with that, you know, then they probably just need to go work for an not-for-profit or something. And so they’ll get weeded out. But that’s kind of the first big idea, is understanding that, okay, we need to have this gross margin, but we need to have it because look at how much it costs to run the business, and just that simple explanation of if, you know, we charge three times more for your salary, but then on the P&L we get to a 50% gross margin, and then it usually about 30 cents of every dollar goes to overhead.

Then somebody can start to do the math and go, Oh, okay. I guess they’re not really gouging me that much. There’s maybe 15, 20, 25% on a good day of this money that’s actually left over as profit. Oh. And, and I get a cut of that profit when I get my bonus every Christmas and, Okay. Yeah, I, I see how this is kind of reasonable.

So I think that first very basic explanation of like, this is just how an agency works, is the starting point. And then you can start to get into how hourly rates and utilization rates and, and stuff like that play into that gross margin and how that might move it up or down.

Chip Griffin: But in my experience, and I’m, I would suspect it’s probably yours as well, is that the vast majority of agencies do not provide this sort of education training and context to their employees. And, and my theory is, based on having conversations with a lot of agency owners, it’s because the agency owners themselves don’t understand many of these concepts.

And so it’s very difficult for you to teach your employees about these things if you yourself are not thinking about them. Because too often I talk to an agency owner who will in, in thinking about can I hire the next person? They just look at their bank account and they say, Do I have enough in, in reserve to pay for this person?

And it’s not really looking at it on that individualized… what’s this person gonna do? Which, which client are they gonna be responsible for? What revenue are they associated with? What’s my margin now on that particular piece of work? So a lot of this comes down to owners need to educate themselves first, but then they’ll be in a position to educate their team, which means they can do more from a transparency standpoint.

Marcel Petitpas: Absolutely. Yeah, you’re absolutely right. Most of the owners, I mean, this is why our company exists. Owners come to us and you know, they, they have symptoms. We’re busy, but there’s no money in the bank. What the heck’s going on? We’ve doubled in size and I’m making less money than I was before. What the hell’s going on?

Right? These are just fundamental misunderstandings about the business model, and I want to pause and caution, like I have been guilty of having a bit of a condescending tone when I talk about this. It’s not surprising that agency owners don’t understand this stuff. It’s very hard to find the information, and a lot of the information on the internet is frankly flat out wrong.

Right? The way that you we’re being taught how to calculate utilization, very, very hard to figure out what exactly that should look like. And most of the time we’re looking at one metric at a time, and then we’re trying to piece these things together, but there’s inconsistencies between one formula over here and how that relates to this other formula over here. There’s lots of different thoughts on how gross margins should be calculated, how utilization should be calculated, how your effective rate should be calculated.

All the ratios between these things. So this is the reason we exist by the way, this is the reason that we create a lot of content. So if you want to learn our framework, which we have spent dozens of hours thinking very deeply about, making sure it’s completely holistic and consistent, come consume our content and it’s all there.

It’s free on the internet for you. But yeah, I don’t… I want to be mindful that like, This stuff is hard to figure out because it is, There’s a lot of mud in the water around these metrics, but it doesn’t negate the fact that it’s critically important because unless you understand it, then of course it’s hard to train your team on it, and if your team doesn’t understand it, then all of these things around transparency are hard and, even worse, getting them involved in actually making the business better and being able to like create real momentum and scale around that is, is almost impossible if the team doesn’t really understand how to move things forward and isn’t empowered with a way to make those judgment calls on their own.

Chip Griffin: Yeah, and and I don’t think any agency owner should feel bad that they don’t know these things because the reality is very few agency owners have been to business school. And most agency owners have worked at another agency previously where they were never given this education and training there either.

Right? And so it, it’s difficult to expect someone just to, to absorb something from the ether. And as you say, There’s a lot of really bad advice out there. There’s also a lot of misplaced advice out there, and so if someone reads up on, say, utilization rates, and they try to dive into that first before they’ve done some of the other work, they can end up going in the wrong direction.

And so you need to understand there’s an important sequence to evaluating some of this data and acting on it. And, and if you start too deep in the weeds, you may lose sight of the big picture, and so you’ve gotta make sure you nail down the big picture first and then sort of gradually work down to those more granular topics.

Marcel Petitpas: Yeah. So to kind of bring this together, you know, in, in terms of concrete next steps, if you’re faced with being forced now to be more transparent about your salaries, or if you just feel like that’s the right thing to do, I think what we’ve agreed on is, step one, is educate yourself as a founder on, you know, some, some basics about managing the metrics in your business model. And again, like we’ve got great resources for that, but to me it could be as simple as just making sure you have a real measure on your delivery margin or gross margin or contribution margin, whatever you want to call that number, but it’s how much it costs you to earn a dollar of agency gross income.

It should be clear to you what that number is. And you should be setting a target for that that’s 50% or higher. And then you should have a sense of how much of that income goes to overhead, and then the next step is just paying attention to some of the levers that control that. So what is your average billable rate, which is not the rate card or the number you use to multiply the number of hours when you estimate a thing, it’s for every hour that your team works on average, how much revenue is earned in that time.

And does that differ dramatically from team to team, from service line to service line, from type of client to other type of client, right? These things are fairly easy to measure, assuming you have you know, some decently structured time tracking data around it. Utilization rate is the other major lever, and those two things should always be looked at together.

And then the last one is your average cost per hour, which is a function of what does it cost you to staff the, the talent to do this stuff and understand that those are essentially the three things that control delivery margin. Delivery margin is, is basically the, the foundation for agency profitability.

Without a good delivery margin, it basically, nothing else matters. It’s just gonna be hard to be profitable. And when you understand that, and then you can give that simple framework to your team, you’d be amazed at the ideas they’ll come up with once they start to see how those things get moved around and they’ll start to get a better understanding of how this stuff works. And here’s the last piece from my perspective, is then you start talking about it. And you start engaging them in the conversations around it, and you problem solve with them using this framework and through the application of these metrics to make decisions and to investigate things.

That’s how the real understanding gets built. The real empathy gets built and that to me is the most important part. I don’t see this kind of commercialization training as an event. Certainly that’s a starting point. Have this part of your onboarding or have somebody come in on a regular basis to do this training.

But really the way this stuff sinks in is it’s actually used and the team sees how it’s used and they’re involved in those conversations, and you would be amazed at what they can bring to those conversations that really add value to the business.

Chip Griffin: I mean that in a nutshell is, are the key things that you need to understand if you’re, if you’re going down the road of transparency, which you should.

I want to circle back, before we run out of time here to one last key thing since we started on pay transparency. And so the, the requirement in New York City is, is publishing pay ranges for open positions and, and frankly, I’ve always advocated this because it’s helpful as far as just weeding out who applies.

Because if you’ve got some, because it can be very difficult to know when you just look at a title you know, what, what kind of job is this? Is this a 50,000 job? A 150,000, 250? You know, what is it? And so, because it can vary so wildly from organization to organization, even more so today where titles just even across organizations don’t have the same meaning that they used to.

But one thing I would suggest, and I’d be interested in your reaction to this as well, when you publish a range or when you share a range internally, if you’re being transparent, whether that’s on salary or anything else. People tend to view a range and they only hear the number that is most favorable to them.

And so if, if I say that my salary range for a job is 50 to 75,000, the job applicant, hears 75,000. Right? Yep. It’s, it’s, and it’s the exact opposite when you’re talking to a prospective client. If I say to a prospective client, This will cost between 50 and a hundred thousand, they hear this is going to cost me 50,000.

So any time that you’re sharing a range, when you’re using numbers and it’s – always imagine that whatever the most favorable number being heard is the one that’s gonna stick in their heads. So be careful about doing wildly wide ranges, and I know it can be very appealing when I’m, if I’m just trying to comply with the New York City law, let me put a nice big range in there because that’ll make it easy and I won’t get into any trouble.

Maybe, but you might be setting yourself up for failure. So think about that in all of the numbers that you’re sharing because it, it’s oftentimes easier to do transparency when you don’t share specifics and you share ranges. But that’s always gonna be viewed by the listener in the way that’s most favorable to them.

Marcel Petitpas: Yeah. Yeah. And the other thing I’d add to that is I think it’s okay to add qualifiers, right? To put those numbers into context, right? Like if you’re gonna be at the upper range of this, like here’s the kind of things that we’re looking for, and if you’re gonna be on the lower range of things, here’s the kind of things that we’re looking for.

And you know, just…

Chip Griffin: Absolutely.

Marcel Petitpas: I, I do the same thing. I always post salary ranges when we put up a job post. I feel like it just saves everybody some time. And I think it’s okay to, to qualify those things. And it’s just about managing expectations. And I think that increasingly job applicants, especially where we’ve been in very much of a job seeker’s market as opposed to an employer’s market recently.

They don’t really wanna waste their time either. So I, I think it says a lot about you as a company if you’re displaying that kind of like candid, open communication and you’re setting expectations clearly up front. I see that as just a really positive thing. So yeah, I’m, I’m totally on board with that idea.

Chip Griffin: Well, and the other thing with transparency is that the, the more you’re sharing with job seekers, with your current employees, it helps to telegraph to them where things are headed. And so if you’re with a job seeker, it helps them to understand what to expect if they do become an employee of your agency.

For existing employees, if you’re talking about transparency when it comes to revenue or things like that, they understand what the overall health and direction of the business is. Are you growing? Are you shrinking? Are you trying to just protect rep? So that means things come as less of a surprise. If they see revenue growing a lot, they’re gonna expect that there’s gonna be a lot of new people coming in because we’re gonna have to service this revenue.

If they, if they see revenue going down, they’re gonna know, Hey, we need to be, you know, minding every penny. And that can be helpful because it helps getting everybody rowing in the same direction. So there’s huge benefits if you do transparency as long as you’re providing that context that we talked about and following the steps that Marcel talked about just a moment ago. So that’s gonna bring to an end this episode of the Small Agency Talk Show. Marcel, again, remind people where they can find you and get these resources that you’ve mentioned.

Marcel Petitpas: Yeah, head to parakeeto.com. We have lots of amazing content on our blog, and if you go to parakeeto.com/toolkit, we’ve got the agency profitability toolkit there, which has a bit of a crash course on some of the 101 metrics, has some spreadsheets and templates.

All kinds of resources in there to help you get the basics in place. So be sure to go check that out. If listening to this, you started to feel a little bit attacked by our picking apart of the lack of knowledge that most agency owners have. Again, know it’s not your fault and that’s why we exist, and I hope that you go check those things out.

Chip Griffin: And I, and I think by now anybody who listens to me knows that I’ll, I always call it like I see it, whether it, whether it’s a popular opinion or not. So, but, but there are these resources available. Marcel has them, I have some, and, and there are plenty of other folks out there who do have good advice for you that will help you uplevel your knowledge, which will then allow you to educate your team more effectively so that you can be transparent in a productive way.

So with that, that does draw this episode to a close. If you’d like to see previous episodes of this show or any of the other videos that I put out, go to smallagency.tv. If you’d like to learn more about SAGA, just go to smallagencygrowth.com. Have a great weekend, everybody, and I look forward to seeing you all back on the next episode.

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