how should I respond when employees complain about financial stress?
Ask a Manager Alison Green www.facebook.com
A reader writes: I am the director of a nonprofit with a small team: I have five direct reports. I was a coworker to all of these individuals for years
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Ask a Manager
A reader writes:

I am the director of a nonprofit with a small team: I have five direct reports. I was a coworker to all of these individuals for years before being promoted and becoming their boss, and as a result I have — and continue to have — very close relationships with them. Since taking on a supervisory role I have worked hard to re-establish personal versus professional boundaries and think I have been largely successful. Of course, we are still a close-knit team and regularly discuss aspects of our personal lives like our families, our pets, our health, etc.

Occasionally, the topic of finances will come up in one-on-one conversation. One of my reports will say something like, “I was barely able to make rent this month” or “my car is broken and I can’t afford to fix it.” I typically respond with something generic like, “Yikes, that sounds stressful” and move on.

Recently, one of my employees was a bit short with me. She later apologized, saying, “I’m sorry, I have been really struggling financially. My rent just went up and my husband lost his job.” I told her that I was sorry to hear that she is under a lot of stress and left it at that. But all of these conversations seem to subtly imply that I (as a representative of the organization) am responsible for these problems, as the employer and determiner of salaries.

I feel my staff is paid fairly for our industry and location, and we give annual cost-of-living increases. It sometimes feels cruel to dismiss what I perceive as a cry for help from my staff, whom I care about, when they are being vulnerable with me, but I also understand that their financial situation is not my problem. Should I be handling these uncomfortable comments — and their subtext — differently, or is it okay to simply empathize?

I wrote back and said, “If multiple people on your staff are saying these things, I would be worried that they’re not in fact being paid enough to live on. How thoroughly have you looked into verifying that they really are (and currently too, given the pace of inflation recently)?”

I’m fortunate that our industry (let’s just say “museums” as a broad category) has a professional organization that puts out annual salary benchmarking data, including both gross and cost of living-adjusted figures, which can be further refined by operational budget, population served, etc. This is not the only metric we use to determine salary, but it helps us to have a guideline, and all of our staff are paid at or above the 50th percentile when compared to similar organizations. We give annual cost-of-living increases (8% last year and 7% the year prior).

We are a small nonprofit which has struggled financially, and we simply aren’t able to pay at the very top of the range for our staff (myself included). Still, we try hard to offer competitive pay and benefits. At one point I tried a more professional response to one of these comments, saying, “If you’d like to sit down for a formal salary review, I’d be happy to do so.” This seemed to embarrass the person and they backpedaled, saying they were just venting. But a few months later that same person was making those same comments.

Maybe I’m reading too much into these conversations? I only really have this issue with two of my staff, but for those two it does seem to be a recurring stressor. I want to let them know that I empathize, but that we are still a business and I’m not in a position to pay them more just because they may want (or even need) more.

Interesting. I was sure it was going turn out your pay data was out-of-date or you really hadn’t kept up with inflation.

For what it’s worth, being paid at or above the 50th percentile for your industry still might not be a living wage, especially when that industry is nonprofit. (Although your cost-of-living increases are higher than what most employers have done in the last few years, so kudos for that.)

Ultimately, though, if this is how you need to structure salaries — and it sounds like it is — all you can do is be transparent with people about that and trust that they’ll make the decisions they need to make for themselves.

To that end, if you haven’t already, it’s generally a good thing to be open about how the organization sets salaries and handles raises (how often they happen, what makes someone eligible or not eligible for one, how much they tend to be), including the benchmarking data you’ve used. This is something you should do with your staff as a whole, not just to the two people who have mentioned struggling.

Also, you mentioned that you offered to sit down for a formal salary review with one of these employees. If you’re not already initiating those yourself on a regular basis for everyone (ideally annually, and separate from cost-of-living increases), that’s something you should start doing; don’t leave it in your employees’ court to ask. You don’t want people feel like the onus is solely on them to make sure they’re being paid fairly, and a lot of people will never ask for a raise even when they clearly should. You might already be doing this! But I’m flagging it in case you’re not.

But beyond that, when someone mentions being stressed about finances, I wouldn’t assume it’s intended as a barb toward you or the organization. Employees having financial stress can simply be a reality of life — and even if you think their salaries should preclude that, you never know what financial burdens a person might have. So you could respond with, for example, “I’m sorry you’re having a hard time” or “That sounds really stressful. I know the pay in our field can be tough.” (Only say that last part if it’s true, of course.)