129: You're Underpaid And Loyal. Here's How to Fix One Without Sacrificing the Other

We break down the loyalty tax, the hidden pay penalty that can hit Black professional women who stay loyal to a company while the market keeps moving. We share why it happens, how to spot compensation drift early, and how to advocate for the salary you deserve without walking away from a job you love. 

Ready to find out what your compensation should be and how to negotiate it? Join the free 2-day intensive: Name Your Number: How To Negotiate Your Salary With Confidence Even In An Uncertain Economy on May 16 & 17. Save your spot here.

Transcript

A Gut Punch Pay Discovery

SPEAKER_00 0:00

Well, I have a client who is a black introverted female. She is an executive. She's a chief operating officer at a small tech company. She's been with this company for five years. She's actually one of the longest tenured people in that organization because they've had a lot of turnover. She is excellent at her job, phenomenal at her job, so much so that she is being tapped by other colleagues to help them with their job. And the CEO has grown to rely on her more than what she ever imagined. The other thing that is unique about her is that she absolutely loves her job. I don't get to hear that often, but she really, really does love her job. And she loves the company that she's works in, and she loves her colleagues. She enjoys the mission that they're all working toward. She is feeling like this is exactly where she belongs. And by every measure, she has been doing everything right in that role. Then one day she got access to something she wasn't supposed to see. She got access to compensation data for her peers. And what she discovered was that people who had been coming in and being hired, particularly in the last two years, they had been receiving significant amounts of stock options, significant amount of discretionary bonuses. Their total compensation packages were 10 times larger than what she had received five years ago. And as a result of that, she felt like someone had punched her in the stomach. She felt like they had landed a gut punch on her. Because what had happened is that as the market has shifted, all of these new people were being compensated according to what the market demanded and what their skill set demanded. But because she had joined the organization five years ago, her total compensation package had quietly become incompatible with her tenure and her contributions. Now, in this instance, she didn't do anything wrong. She was loyal, she was excellent, and she was falling behind anyway. What she has experienced has a name. And I call it the loyalty tax.

Defining The Loyalty Tax

SPEAKER_00 2:52

Hi, Lady Leader. Welcome to today's episode of the Leading Her Introvert Way podcast. My name is Dr. Nicole Bryan. And if you are a returning OG, I am always, always happy to be here with you. If you're new here, then a special welcome to you as well. I help Black introverted women solve three specific challenges. The first is I help you land the executive promotion that you know you already deserve. The second is once you land that role, I help you close any leadership skill gaps that may exist so that you can knock that role out the park, no questions asked about you or your capabilities. And the third challenge I help you solve is building your department strategy and your high-performing team. Now, today we are talking about the loyalty tax. If you haven't heard about this before, that's okay. Let's define it. Let's break it down real simple. The loyalty tax is the invisible cost that black women pay when they stay inside an organization without actively managing their compensation. Now, let me just say it is not necessarily malicious. I am not one of these people who believes in conspiracy theory. So I don't think that corporate or organizations or companies are all out to get black women. I don't believe that. Some of us may believe that. History has shown, the data has shown that black women in particular are not promoted at the same rate as our counterparts. We're not rewarded at the same rate as our counterparts. We are not compensated at the same rate as our counterparts, right? So we know that that all exists. And on top of that, we also recognize that we are functioning in a world that is full of racism, sexism, and frankly, what I call extrovertism, which is when you are an introvert operating in an extrovert-focused world.

Why The Pay Gap Widens

SPEAKER_00 5:19

So I say that because that's the context in which we are operating. It's not necessarily that the company is out to get you, per se, but what we're dealing with is we are dealing with structural defects in the corporate environment, in the workforce. And here's how it works: the external market will shift, right? The economy shifts dramatically, year over year. Skills, experience, and market demand all affect what companies are willing to pay for the role that you are in, for the skill sets that you bring to the table. But internal merit increase budgets, they tend to stay pretty flat and they will range anywhere from 2% to 5% on average. And that's it. 5% is actually pretty generous. So when you're with a company over five or 10 or 15 year period, while your skills are deepening, your experience is growing, and the market rate for someone with your profile is changing, your salary is creeping up at about 3% a year. The gap between what you're worth on the open market and what you're actually being paid quietly widens year after year after year. The only way for that not to happen is if you advocate for yourself, because nobody else is going to close that gap for you. What I see over and over again is so many of us black women who really love our job or for whatever reason have chosen not to move on from a company or a role. We are staying in that role and we are quietly being underpaid. Not necessarily, again, because the company wants you to be underpaid, not necessarily because the company is specifically targeting you, although that does happen. But it's not about that. It is more so about how the economics are actually working. And when you stay in a role for a very long period of time, even when you are getting your merit increases on a regular basis, very rarely are you able to keep up with the market, the changes in the market, the demands in the market. So the market has moved, your salary didn't, and that is how you wind up paying the loyalty

Stay Loyal And Stay Strategic

SPEAKER_00 8:09

tax. I want to be 100% clear about this because I've been misquoted on this topic before, and I do not want that to happen again. I am a huge advocate for growing your career inside your organization. In fact, that is what I specialize in. I specialize in helping Black introverted women get promoted inside their organization without having to go to the open market. The reason why I'm such a fan of people staying inside their organization, particularly when they want to go to the executive level, is because the data supports it. The data is in your favor, if that is you. The research shows that when you are trying to reach the executive suite, your chances of landing an executive role are significantly higher through internal promotion than through the open market. The numbers are the numbers, right? So unless your organization is toxic or your growth ceiling is real, staying and growing internally is often the smartest career move that you can make. But, and this is the critical distinction here: choosing to stay does not mean you stop being strategic about your compensation. Those are two completely separate decisions. You can be loyal, sis, and be informed. You can love your company and your job and know your market value. You can want to grow internally and advocate for what you deserve. So deciding to stay is a strategy. Ignoring your compensation while you stay is a mistake. The other thing that's important for you to recognize is that every company has their methods of compensation. And the rare company will proactively make market adjustments for loyal employees. The vast majority will not, unless you make them aware that an adjustment is needed. Again, this is not about corporate being evil. And I'm not saying that corporate is out to get every black woman on the planet. But here is what I

Advocate With Data Not Anger

SPEAKER_00 10:31

do know. As someone who has sat on the other side of that table as a human resources professional, black women as a demographic are disproportionately and negatively impacted by the way corporate compensation systems actually operate. That is not an opinion, that is a fact. And knowing that fact has two possible responses. You can feel victimized by it, or you can use it as information. Information that tells you that you cannot afford to be passive about your compensation. Not because your company is your enemy, but because the system was not designed with you specifically in mind. And nobody is going to advocate for you the way that you can advocate for yourself when it comes to your compensation. Being aware is not victimhood. Being aware is actually power. So what happened to my client is not unique. I see it all the time. Hell, I've lived a version of it myself. And the good news is once you know what the loyalty tax is, that the loyalty tax actually exists, once you understand how compensation drift actually happens, you can do something about

Free Salary Negotiation Intensive

SPEAKER_00 11:55

it. You don't have to leave a company you love to get paid what you deserve. You just have to be strategic and a little courageous as well. And that's exactly what we're going to do together in my free two-day intensive coming up in May. It's called Name Your Number: How to Negotiate Your Salary with Confidence, even in an uncertain economy. It's happening on May 16th and 17th. We'll be together for two hours each day, and it is completely free. We're going to figure out what the market says you should be making. We will give you the exact approach to have the conversation inside your organization. And we will help you build your business case for your raise. The link is in the show notes. Registration takes one minute and come ready to work. You chose to stay at your company, and that's probably the best decision for you right now. But let's also make sure you're staying is actually paying you what you're worth.

Closing Thoughts And How To Connect

SPEAKER_00 13:21

Thanks for tuning in. If you have thoughts, questions, or ideas for future topics, connect and send me a message on LinkedIn. And if you enjoyed today's episode, subscribe and please take a minute to write a quick review on Apple Podcasts. Your review will help spread the word to other ambitious females so they know they're not alone and that this podcast is a community of support for all of us leading her way to the top. Remember, your leadership is needed. Your leadership is powerful. So lead boldly. Until next time.