#57 - Overpaying Contractors, Underpaying Employees: The Hiring & Compensation Mistakes Costing Founders Millions

As a founder scaling into the 7+ figure range, your team is your most valuable asset. But here’s the truth: most entrepreneurs are overpaying their contractors and underpaying their employees—and it’s quietly draining profit and stalling growth.

In this episode of Millions Were Made, host Jessica Marx breaks down the hidden compensation pitfalls that nearly every high-growth business faces. Together with Brooke Dumas, they pull back the curtain on real client audits, uncover why so many founders feel “stuck” with expensive 1099s, and share how to finally structure salaries, incentive comp, and team models that actually scale.

You’ll learn:

• The #1 mistake founders make when deciding between W-2 and 1099 hires
• Why contractor pay is often wildly inflated—and how to audit your true costs
• The three reasons female founders in particular underpay W-2 employees
• How to restructure comp without losing top talent or blowing up margins
• The shift every founder must make to move from chaos to a profitable, scalable org chart

If you’re serious about protecting margins, retaining top performers, and creating a team that drives real ROI—this episode is required listening.

Resources + Links Mentioned:

• Listen to episode #53 on profit margins
• Upcoming episode on incentive comp – subscribe so you don’t miss it
• Follow us on Instagram @MillionsWereMade
• Connect with Jessica on Instagram @TheJessicaMarx