Discussing the Current State of Compensation – ADP MOTM 2024 Expert Panel

Connect with Demetrice:

• 

Connect with Garrett:

• 

Connect with Lyndsey:

• 

Connect with Dwight:

• 
• dwight.brown@salary.com

Connect with David:

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• 
• david.turetsky@salary.com

Podcast Manager, Karissa Harris:

• HRDataLabs@salary.com

 

Production by Affogato Media

Resources:

• Trulite Glass & Aluminum Solutions
• BSH Home Appliances Corporation
• Steve Madden
• Compensation Consulting
• HR Data Labs Season 7 Episode 10
• HR Data Labs Season 7 Episode 8

• “If you haven’t published [geographic differentials for employee pay], then it’s going to be a bigger problem for you because you’re making a one-off decision if an employee decides to move.”
• “When you’re deciding [an employee’s] pay, it’s the only time when you have to reference the person [not the job].”

Announcer  00:02

Here's an experiment for you. Take passionate experts in human resource technology, invite cross industry experts from inside and outside HR. Mix in what's happening in people analytics today. Give them the technology to connect, hit record for their discussions into a beaker. Mix thoroughly. And voila, you get the HR Data Labs podcast, where we explore the impact of data and analytics to your business. We may get passionate, and even irreverent, that count on each episode challenging and enhancing your understanding of the way people data can be used to solve real world problems. Now, here's your host, David Turetsky.

 

David Turetsky  00:47

Hello, and welcome to a live version of the HR Data Labs podcast. I'm your host, David Turetsky. No, no clapping necessary. It's totally okay. We're going to be talking today about the complexities of pay. And with us today, we have three esteemed guests. The beautiful part about this panel is each one represents a different industry. Each one represents a different discipline in the world of human resources. And you'll notice some of the names because these are household names. And what you're gonna find is, is that a lot of the things we're going to be talking about are very common. And a lot of those things that we're gonna be talking about, you're probably going to be facing too. So we're gonna first go through and talk about who we are, and why it's important for us to be giving this presentation. The second one we're going to do is give a little bit of context for the world of pay today, and why this is so important to talk about it, then we're going to have three questions. And they're really easy questions. We'll talk about them, you can ask questions if you'd like. And then any other questions, and we don't cover any topics that we don't cover. I'll help and they'll help. And so to try and start, kick things off. I just wanted to say, how this is gonna work. It's gonna be a little bit of a twist, because we're doing this as a Podcast, the podcast rules are there's no dumb answer, there's no wrong answer. And if, if there's a, if there's a question that can't be answered, I will tell you we can, we may not have all the experiences in the world, but I think I have three brilliant people here, that should be able to answer them. But also, if you have experiences, you can answer the questions too. Okay. And the last thing is, please participate. It's so much more fun when we get a flow of traffic from the audience to our panelists. So let's talk about who you are. Go. My name is David Turetsky for those of you don't know me, I worked at ADP for 16 years, I was in compensation management at ADP. I also helped develop the ADP Data Cloud. Also, now I'm with Salary.com, there CHRO, as well as one of the leaders of our consulting organization. And so some of you may know me from actually helping you. Others. You've probably heard of me, I promise you the rumors aren't true. Okay. I've been doing the HR data labs podcast since October of 2020. Pandemic thing. And in order to do thought leadership, instead of going out and talking to people, presentations like modem, we actually had to do things like podcasts. And so we have 159 episodes, we've done talking to a lot of the thought leaders in the world of human resources, payroll, HR, technology, and even beyond. And so you might want to listen to it, react to it, I'd love to hear feedback. But start with Demetrice, I'm actually gonna go to you since you're the first smiling face on that. Demetrice Saulsberry, give us a little bit about your background.

 

Demetrice Soulsberry 3:32

Okay, I have probably too many years to count in hrs and anything related to the system, benefits, payroll, and HR. So that's pretty much my background for the last 20 plus years.

 

David Turetsky 3:48

And she's being very shy. She's also one of the leaders of Trulite. So if you know Trulite Glass & Aluminum

 

Demetrice Soulsberry 3:55

One of the finalist

 

David Turetsky 3:58

Next person Garrett Valencia from Bach Siemens Group.

 

Garrett Valencia  04:02

Yes, my name is Gary Valencia. I'm the manager for total rewards and payroll for the United States, Canada and Mexico, for BSH Home Appliances, which is the home appliance division of Rubber Bosch. So if you know a Bosch dishwasher, we make them frigerators ranges and those things,

 

David Turetsky  04:19

But you can't support any warranty claims here, right?

 

Garrett Valencia  04:22

No, please don't. Please don't come to me on that contact customer service.

 

David Turetsky  04:28

I actually saw one on Craigslist and I wanted to ask you whether I should buy it, but

 

Garrett Valencia  04:33

You might get a good discount, but I can't guarantee you the warranty is good.

 

David Turetsky  04:36

That audit call you? Yes. So

 

Garrett Valencia  04:39

So, yes, I have that experience in those areas. And I am focusing from the compensation perspective since that is the majority of my role for the three countries.

 

David Turetsky  04:51

And next we have Lyndsey

 

Lyndsey Benson  04:52

Hi, I'm Lyndsey Benson. I'm the VP of HR at Steve Madden. I've been with Steve Madden for 10 - 15 years. Wow, yeah. Wow. Just happy to be here. Oh, yes. And we won.

 

David Turetsky  05:05

Yes. Thank you. So we're going to talk a little bit about some of those experiences. And I think you were even talking about some of the competition challenges. When we were going through listening through the video, we're going to talk to touch on those today. So first, let's get some context. I think everybody knows that after the pandemic, we started to see some very strange things happen in the world of compensation. First of all, some of you don't realize this, but work from home was a very, very big complication. Why? Well, because people took that as a way of being able to work their lives around their lives. And we hadn't had that for those of us who have been working in the workforce since the 80s. It was all command and control, it was all go into an office, it was all you have to be at work, and you have to show your face. And if you're out, Oh, are you sick tonight? Oh, you had to do something? Or when are you going to make that time up? Well, we started to see that shift, because now work from home, give us an opportunity to work our world of work around our lives. And people took that as a compensation element. And we're gonna get into this a little bit, a little later. But I've been hearing lots of thoughts from leaders beyond tweet, look at Twitter, or whatever it's called these days, and some of the other places like LinkedIn, we're actually seeing people who are telling stories about companies telling people to not only come back to the office, but they're also telling them they're gonna get a pay cut. Why, Wait, when did that happen? And so, again, if that's happening at your organization's you don't have to say I picked, okay. All of yours too, because you're all part of this as well. But one of the things that are key there is we're starting to see those organizations try and start to take control again, and control the narrative and control people and where they work. Whether it's true or not, that they're not getting productivity, we actually saw a lot of productivity from people working from home. But now there's that's thought process of let's get control back. Because some of the other things we're seeing is that people feel more empowered to ask for more. They're asking for more time off, they're asking for more pay. And we're seeing this, especially in unskilled labor. And so for those of us who do compensation every day, especially from people who do competition every day for other companies, we're seeing when we do market pricing, we're seeing unskilled labor rates go through the roof. And it's not just because minimum wage increases, it's because we're seeing those jobs coming out of nowhere. We're also seeing a lot of skilled labor, people who are nurses, people who are in stressful environments, taking that unskilled work, because they don't have to watch people die. Frankly, they don't have to wash bedpans. And they can do things in an unskilled environment that don't really utilize their training. But it doesn't matter, because they're still getting paid similarly to where they were in the skilled workforce. And what does that do? Then it put pressure on the skilled rates, because then there's a dearth, there's under supply of those people. And so those rates start going up. And so it starts to spiral. Now we're seeing tons of compression. Okay, so that's the world of compensation. We're also seeing in the regulatory environment, things like pay equity and pay transparency, with new rules on a state level, sometimes a municipality level that are driving corporations have to say, well, if I'm doing it for Colorado, why don't I just do it for everybody? Or I work in I live in California. And those rules are relatively hard. Why don't I just do that everywhere, we call that using the lowest common denominator. If it happens in a place where we have lots of employees, do it for everybody, don't just do it for one place, why? It will cost you more to do it from one place. And you're gonna have to say to yourself thought process wise, wait a minute, is this only for Colorado? Is this for California? Or do I do it for everybody? So the other problem with that is that when you start to think about the rates you're using, then you have to go back and start doing your market pricing again. But when was the last time you looked at your job descriptions? So this starts to get into a spiral of work that becomes almost out of control. Now, I know specifically, there are a couple of people on the panel who keep very, very up to speed on job descriptions. And so for them, it's just a question of doing the market pricing and finding out what the latest rates are. But for a lot of us who haven't looked at our job description, since before the pandemic, this gets into panic mode, because now I need to go back to the beginning or even before the beginning to look at my job table, look at my titles, look at my grades, look at everything and begin from scratch. So compensation isn't just about how much you pay or what you pay. It starts getting into other things career frameworks. I was mentioning before about Colorado in their patrons parents legislation. Well now they've said you have to pay publish career frameworks to people and be proactive about it. Just a show of hands, how many of you have clear frameworks that you can show to people? This is hard stuff. It's not easy. But if you operate in Colorado, you have to, it's not a choice. It's now part of legislation. And again, if you don't have it for Colorado, then you don't have time for everything else. But if you have it, then you can start to use it. By the way, what did people ask for a lot during engagement surveys? What do they ask for a lot? Where's my career going? What's my next step? How do I got there? Without that, what are they going to do? Leave, they're gonna go on LinkedIn, or they're gonna go on indeed. And they go, Hey, I just saw this really cool job. And what when do you find out, when you find out when you go to ADP is data cloud and analytics, and you go, and you look at your termination reasons, report, or metric, and it says, Oh, they left because they got a better opportunity, because you've done the work to clear up your termination reasons. And you know that anyway, so but but that's the problem is, you find out too late that you could have saved that person. And that person may have been the person that saves your organization or saves a million dollars or makes a million dollars, you don't know. But what this does is it creates another problem for you. And so compensation, not just about how much you pay for a job, it has much more to do with a lot of things. And we haven't even started talking about pay equity yet.

 

David Turetsky  11:39

But I wanted to set that context, to now go into some of the questions that are now going to uncover what are these folks dealing with? And what are you dealing well, in the world of compensation and pay? That might be complex? Even from your perspective, it's totally cool. But the first thing we're going to do is we're going to start with what were the top three things that happened in 2023. That surprised you. We've heard a lot about pay transparency, we heard a lot about pay equity. So I'll start with you, Lyndsey, since you have the microphone, give us just one of your top three, what surprised you in the world of pay in 2023?

 

Lyndsey Benson  12:22

Speaking of engagement, employee engagement surveys, we recently finished, completed ours. And like the lowest score for us was honestly, that people feel do not feel compensated for their for their job and for their workload. And, you know, you think you're doing all right. But then you see that number and you're like, wow, like it was really like eye opening to see how many people thought that they were not being compensated fairly. I don't even know if it's true or not. Right. And that's the thing, right? Like, is it really feel, but it's how they feel their way. It's how they feel. So you know, how are we going to address that? I don't even know. Yeah, but but that was that was big for me.

 

David Turetsky  13:04

So let's ask the audience how many people have done engagement surveys and found out the compensation was high on the list? Okay, a lot of people. It's very true. A lot of people complain about their pay. A lot of people say they're not paid well enough. In fact, I've always said that the four letter word that people use for compensation is more, right? They've never said I'm satisfied with that increase you gave. Now, okay, especially in 2023, we were dealing with very, very high inflationary rates. And people always think we have this conversation to people always kind of equate high inflation with high merit increase. That's not always the case. Right? That's

 

Lyndsey Benson  13:43

That's, everybody thinks that like, they can put comments on certain things. And everyone's like, well, i How come our merit increases aren't going to match the rate of inflation? I'm, like, kidding me? Like, do you really think Can you imagine if that's how we get there? It increases. Right,

 

David Turetsky  13:59

But, but I've heard this a lot though, Lyndsey, that people think that we set our merit increases index to specifically index to cola. They think that because the inflationary rate is high, I'll put it this way, because they can't afford eggs. They want us to compensate them for buying more eggs. Okay. And it's just not true, right? It's just not true. And so, I've always told people that if you look at the inflationary pattern that we've had over the last two decades, are they going to complain when inflation was less than 2%? That they got 3% increases?

 

Garrett Valencia  14:36

David, can I make a comment?

 

David Turetsky  14:37

Absolutely.

 

Garrett Valencia  14:38

So I had a situation earlier in 2023, maybe in September timeframe, going with the realm of remote work, where we have a remote work policy that we had to build because of the new era. And there is a trend that people are wanting to go back to the wall not people want to go back to office but business leaders want you know, the C suite usually wants them to come back to the office. So that's a new thing that's happening. But by Back in September, we did have, I don't know, like, it was a manager, but like a higher level manager and marketing. And she wanted to move from Irvine, California, to North Carolina because her husband got a new job. And so going off of what you're saying about what we don't pay, well, most companies really should not be paying off of cost of living, we pay our constant labor. When in this situation, this employee said it was unfair that we wanted to change her rate for the geographic differential that we pay for the cost of labor in North Carolina versus Irvine, California, which is above the national average. And we pay a premium for North Carolina, because the majority of our workforce is there, because if it's a factory, so we pay a little bit more than what we're supposed to pay on average, but she still didn't feel it's enough. And so she said that her personal whatever things that her kids go to a private school and things that that's makes it our problem, and it's not. And those are hard conversation to have that that HR have to somewhat handle. And levy us in terms of this is facts. And so as people's personal situations are getting into a decisions that are really not business decisions. And those Lisa harder conversations,

 

David Turetsky  16:11

do me a favor, talk a little bit about the difference between cost of labor and cost of living. So

 

Garrett Valencia  16:15

So cost of living, as we know is like the price of milk, eggs, fuel, those types of things. cost of labor is what the market is willing to pay for a role in the geographical area that you're doing business. And so that is where there is a difference. And how you can find those rates or those differentials is through salary surveys. And so we have a bunch of salary surveys that we pull from to do assessments every year to find what makes sense for the ranges because it's actually not on the job, it's on the pay range. Although some people can do it differently, some disk can do a little different, we do it on the range itself. And so we look at those surveys. And where we go is based on the state, we have a rate for the state. And then we have deeper dives into metropolitan areas within those states. So like if you're in Texas, Texas is usually paid national average. And then we have differentials for Houston, Dallas, and those kind of areas that pay a little bit more, or sometimes it's less. So unfortunately, we do have to compensate them for those situations as well, California is higher than the national average. But then in the Bay Area, we also come say even higher, there is a premium there to New York City has a premium higher than the state of New York, and so on and so forth. So we look at those to make sure that those are aligned every year. And we actually have transparency. So we actually publish it, employees can find out what their differential is, they do not another range. That's a little bit of a thing that we're not there yet. But they do know what their differential is because we want them to be transparent and making decisions about where they are choosing to live to make a decision that's informed right before coming to us and say if I haven't I want to move here. Okay, well, this is what it could be. So we try to make sure that they are aware before they make a decision, because then we go into issues where now we have to do reductions and pay potential of a reassessments and pay. And then we have to make those choices. Because if once you make one type of decision that sets a precedent, it's really difficult to go back. And it's trouble.

 

David Turetsky  18:20

I wanted to touch on that for one second, which is that you need to have that policy known that yes, you're paying geographic differentials based on where people live and where they're hired. And if they make if they're making a personal slash business decision to move, then their rates may change. Yes, if you haven't published that, then it's going to be a bigger problem for you. Because now you're making a one off decision. So you guys publish that as a as a policy? Yes. So let's go now to Demetrice. Demetrice, what's one of your top three, the chop deal in 2023?

 

Demetrice Saulsberry  19:00

The biggest one, I have to say is this because we're still dealing with that at the moment. But a lot has to do with this year, our CEO said okay, 90% of our population can be now remote work. With that we did have a lot of movement. Let me just clarify that we had a lot of movement. We had a couple C suite move to other states, and we had to adjust their pay. And we are still dealing with that at the moment. So this is a hot topic for me. And even when we provide all of the data to them to determine why we're changing their pay, or the we're getting a lot of pushback, and I say these are C suite so they do right. They voice Yes. Tibet can overshadow Yeah, but providing a lot of the data that we have on Pay Equity providing the data for the God gives. And even, we're a manufacturer and to make sure that they know is truly manufacturing, we're giving them apples to apples and not apples to oranges making sure that they have the data that they need. That right now is for me, one of the top things that we're working on right now. So one of the things that I've been talking to a lot of clients about for executives is paying at the national level, because I think maybe might be true for some of you. But when we hire somebody who's in our C suite, we hire them, anywhere, anywhere, they live anywhere, we can find them, we find the best person. And so we go national average. So we get out of the you're living in San Francisco versus North Dakota, by saying we're gonna pay you, whatever the national now because we're in Boston, that kind of hurts a lot of the executives that live in Boston. But at that point, we're talking about percentage points difference on very large pay packages. So correct. And for us, it makes a difference, it changes even further bonuses, it changes is a huge, it's a huge difference, even when you look at it 10%. That's a huge difference for them. And so the pushback right now is truly amazing that you don't realize that, you get that but in looking at the data and showing them what is going on, I think in the two people that is impacting, they're relocating back to wow, where they are, because it's such a big difference.

 

David Turetsky  21:35

Yeah. Now, what's interesting there is you talked about using the data. And for a lot of us in the world of pay, we use data to sell our story and to tell what we think we should be doing here. And we use that as our business case. We also know that there's a little bit of art and science that goes into that data. And so what we try and do is use as many sources as possible. So my advice when you're going into conversations, especially with senior leaders is have a lot of data, yes, so that you can backup what you're doing. Because using one source to do that kind of analysis. I've heard this happen from leaders for my entire career. Hey, listen, I know all the people that are at all our competitors, I know exactly what they're paid. And they're paid a lot more than that. Nobody's heard that conversation, right? Nobody's had that. Now, when I worked at Morgan Stanley, they knew every investment banking leader knew the investment banker leader, they went to college with them, they went to their MBA with them. And they would talk, right when they play golf or whatever, squash, and so that I usually had to give them a ton of data for that anyway. Anybody want to talk about what your next top three might be? Pay transparency. And you're in New York City

 

Lyndsey Benson  22:54

So right, so so so we're in New York? I mean, we're in New York City, right? And so and then we have California as well. Currently, we are only doing it where it is required, but we are going to just do it everywhere. Because it's just not worth it. It's just, it's just not worth it. And then, you know, it's it's a very litigious world out there. And so, you know, we had one job description that we forgot to post arrange. Okay. And it wasn't us that discovered it, it was, you know, a candidate who was like, Hey, I think by law, you're required, and we were like, you know, full mode. So we had an internal conversation where like, we just need to post the ranges on every single job posting, right? Because, you know, what, if tomorrow, it's somewhere else that we had a position and the lawsuit was something like that. It's just not something that we want to.

 

David Turetsky  23:44

And remember the old days, the old days used to go on, indeed, or LinkedIn and used to say, in Colorado, if this is what if it's paid in California, it was this in New York, if this, those days are gone, we're putting the national ranges or we're putting something on there. And we're not saying it's just for that. And so starting rates from here to here, usually takes that variance into consideration as well. But it's tough. It's very tough. Not only that, I'm not a lawyer, we're not giving out legal advice. Talk to your legal counsel about what you need to do when you're making these postings because there could be something in your municipality or in your state that might be different that you need to add to those postings, right. Because New York City used to be different than New York State, or

 

Lyndsey Benson  24:28

Yeah, New York City was It was first New York City and I think now it's all its state. So but so it's just easier. Just do it. Yeah.

 

David Turetsky 24:37

Yeah. So I live in New England. Connecticut. Yes. Rhode Island. Yes, Massachusetts. No, but it's working on it. So pay transparency is still happening. It's happening a little slowly, more slowly than I thought.

 

Demetrice Soulsberry 24: 50

So. The one thing we did this year actually last year, we are providing total compensation statements to everyone, right. So it's all all electronic they go and they can see truly everything that the company does. And it's it's catered to them. So that's been a big hit like we have gotten a lot of kudos for that, identifying that. So that's one of the big things that we did as well. And in fact, on Total Rewards statements, I think it's really important to understand, when the old days, we used to get these pieces of paper once a year, and it showed that entire relationship now that it's online, we have to tell people to keep going back there to tell them what the value proposition is, between what we offer them, what we're paying them, what they have available to them, but they may not remember on a daily basis. And if they are looking, this gives them that opportunity to at least stop and say, wow, you know, I'm getting a defined benefit here. Where's that happening? Right? Or, you know, we still do a pension. For those of us who remember the pension days. You know, that's a big deal. And I actually think I think saw something on LinkedIn yesterday or today that said, that pensions are making a comeback. Our pension is really making a comeback. Eric, do you? Yeah, I yeah, I haven't heard that either. So anything else? You got? 2023? Because now we're going you have one?

 

Garrett Valencia  26:18

No way to get you to get to 2024.

 

David Turetsky  26:20

All right, well, hold on.

 

Announcer  26:23

Like what you hear so far, make sure you never miss a show by clicking subscribe. This podcast is made possible by Salary.com. Now, back to the show.

 

Demetrice Saulsberry  26:34

Are you anticipating any large change or anything that already happened? Because we're in? We're in March now, right? This is March 1, holy crap. What are we anticipating in 2004?

 

Garrett Valencia  26:43

Well, for me, and we were discussing just a little while ago about what the perception is for the business to know how their employees are getting paid, versus how, what they're really worth. And so we had done a study for all of our jobs for my entire region. So for me, it's all three countries. And since July, and it took six months to finish that analysis. And we did read every single job description to make sure the match was correct in the analysis, and then you find that you don't have job descriptions, I don't know where they are. And that's another problem.

 

Demetrice Saulsberry  27:25

Really tight on job descriptions to

 

Garrett Valencia  27:27

Yes, so these are really old, old jobs like production line, or some sort that I don't know, Whoo, hoo, ha, where's just somewhere, right? Anyway, but for the most part, we do have literally 95% of them about because that was a very small handful of missing. But without we did find and you know, we all have assumptions from what we actually do every day to know kind of how people are getting paid against the market. And then the managers and business leaders have their own opinion. And so through the analysis, I say there's a fair handful of roles that the businesses were correct, in stating that there was an issue. What's interesting is that they were wrong, it was actually the reverse. And so were they think they were underpaid, they were overpaid. And for some other jobs, it came out to be some some variances that we didn't know. And so they have to be included something we do in 2024, to do a proposal for an adjustment to get them to a fair market rate. The problem is, though, that some of these business leaders that we found, don't take into account a full picture of their employees when deciding their pay. Because every company has a different philosophy for compensation, and ours is pay for performance. So you don't get a market rate just because you're there, you have to be competent in the role that you're assigned. And through performance evaluations, you're assessed on a variety of things, one of them being your actual job, and if you have goals, etc. But if you're not meeting the competencies of the actual job, you're assigned, there is no way you should have a pay, that's the same as somebody that is a driver or some type of exponential performer or something like that. And I

 

David Turetsky  29:17

think that's an important point. Because when people talk about even the starting rates, and we looked at you know, we're talking about those log rates that we put on the the requisitions that you post online, people say, Well, why don't you create that range? Well, it's because first of all, you're gonna be looking experience because you know, their performance yet. But then when someone actually gets into the role, then you can actually judge their performance, that range is still there. And people say, Well, we've got to get everybody the median. No, you don't. That's why there's 22 of median and 75th. And when we do the analysis, you can put people between 2015 and 50. If it's okay, or there's no reason why they can't be or if we're talking about salary structures. There's no reason why they can't be around the minimum. It's okay. Yes,

 

Garrett Valencia  29:58

it's different by person, and that's the only time where where I would give the advice that it's dependent on the person? Absolutely. Because in our field, it's always no, it's not the person, it's the job, when you're deciding the pay is the only time where you have to actually reference the person. And what sometimes challenging that business, the business seems to have a hard time struggling with, which is where the data comes into play is making sure you have an actual picture of the employee population that you're doing an assessment on. So let's say it's, I don't know, a service technician or something. So that's just happened to be the one recently, there's a whole bunch of service technicians, and they don't have anywhere to go, there's only one job for us, I can't make a scene. It's not it doesn't have correct, it doesn't have levels, there's no, there's a junior because maybe they're an apprentice, but there's no senior level service technician, you're, you're fixing an appliance, what are you going to do to make you a senior, the business has to prove to us that there's a reason to do that change. And if they can prove it, then we will create it. But if you think about it, they're you there's no effort to go, that's just the life of the job, the only next level would be a management position supervisor or manager of that region or something to that effect. challenge with that is it pushes a lot of those people in that role to the end of the range, the highest level where they're going to max, because there's nowhere for us to go. So we do have a lot of people in that field that are paid very high, skewing market data, because they have experience of 3020 30 years, the job only requires three. But there

 

David Turetsky  31:35

are other analogs. And I think you all might have analogues as well to this where you have a role that doesn't have a family. And unfortunately, we've had to create those levels, just because you have people who have, you know, 15 years, 25 years, 30 years plus, and you're paying over the max and then you have to lump sum them all. But do you have an analogues to that.

 

Demetrice Saulsberry  31:57

And so what we do to compensate that, because that's exactly the nature of our business as well. So we've created a lead that role instead of management Lee, it's, you know, it goes to lead you, we have a lead, so, and all the leads who are in that maximum category are really in that where that's still a range is a higher range, they're still doing the same thing. It's just that they have the experience that the other people don't do they do coaching, though, I mean, trust. Yes. We, we didn't know No, but I mean, did those do they coach the others? Yes. It's not necessarily a mentor program. But yes, it is. They know that. That's the next step. Right?

 

David Turetsky  32:39

So there is some kind of like, leap from one to the other.

 

Demetrice Saulsberry  32:42

Not all jobs only sure when it's for us up service techs, but we call them motors and unloaders. And then the next step up is loading unloading. So yes, there is a mentorship to get to that next step. Awesome.

 

Lyndsey Benson  32:59

First of all, we have probably one of the highest paid receptionists in the world. She's been with us for over 25 years.

 

Demetrice Saulsberry  33:06

And so totally, she's not a senior receptionist, right? Yeah,

 

Lyndsey Benson  33:09

maybe. Maybe now we maybe her senior receptionist just to try and like do something. But we do have a lot of tenured employees. And so we've run into that a lot. And one of the things that we actually discussed was, you know, when they get to that top of that range, right, and sometimes they just they don't want to do anymore, and they're good, and they're loyal, and they're dedicated. And you're okay with that, right? One of the things we discussed was the, the possibility of like, bonus, hmm. Right. And so once it gets to the top of a certain range, you're not going to get any more, but you can get a bonus. And so that's something we're going to look into for for some for our highly paid receptionists.

 

David Turetsky  33:52

And that's an important thing. Just because they're not getting an increase doesn't mean they can't be seen and valued. So either lump sum them or give them incentives, or change the nature of the role. Now, if someone wants to be a receptionist forever, it's totally okay. There's nothing wrong with that. If they want to be a service tech forever. It's okay. I think a lot of us seem to believe that people need to move on, they want to have career growth. Some people don't. And some people want to stay where they are. And the problem is, is that the way that we've built compensation structures, maxes them out. Because we're dealing with cost control. We want someone who has less cost, they're still serviceable, they're still experience. But then when you lose those people who have all that knowledge and all that skill, then it hurts your organization. So but there's no reason why you can't keep them. Stop thinking about the cost control, stop thinking about the rules, and maybe create new rules. There's no reason why you can't anything else that you're anticipating for 2024.

 

Garrett Valencia  34:53

So going off of what you were saying, again, through the analysis that we had done, we're a private company which were kind of big to be a private company. So it's kind of weird. But we still are. And with that there are pay elements to our job structure that is missing. And all of us and in our HR group, well, the leadership knew that there's something missing, we're missing long term incentives. And it is weird. It is, it is abnormal for North America to have senior leadership roles without long term incentives, and we don't have them. So through the analysis of prove that they should have it at a certain level, and what the value is, is not really important, but the fact that it was not there does show and prove to the senior leadership board that it does need to be there. So we did have to propose to implement a long term incentive program plan for a certain level of employees. The sticker shock is horrific. It is expensive. But it doesn't have to be. It's just a plan. And so that's the thing that we're kind of doing now for 2024 is designing what is long term incentive plan makes sense. Because, as you know, long term incentive plans can be very simple to a fixed dollar, and they get it in three years, $200,000 over three years, and they get a portion every year. And but you have to meet a metric like it can be simple to very granular. And so that's just things we have to look into, but the value of that element is missing. And if you don't, it's total direct compensation, in this total cash compensation, and then just the base pay. So this total direct compensation analysis that we had done. Now

 

Demetrice Saulsberry  36:36

I know there are people in the room who work for organizations that are non US, I won't point that anybody out by name. But there are other companies that also might have tracking stocks or might have private equity ownership. And they have the same problem. And there is that phantom share or this there are there are actually shares that you get in those tracking stocks, that those senior leaders do get organizations that missed that are missing a gigantic component of pay. Like you said, Yes. And there's no way to fill that with cash. Cash is extremely expensive relative to that, because of two things. First of all, cash doesn't grow, attached to expect. So when we're talking about long term incentive, there are really two components of it that are important. Not only is it part of total direct comp, but it's also a handcuff, to keep them there, and to give them an ownership mentality to say, We want you to be a part of the longer term growth of the company, we want you to make decisions that focus on the company, not just your business. And that gives you an opportunity to share in the success of the business. Right. Yeah.

 

Garrett Valencia  37:39

And that's why a lot of them have some type of metric that's related to strategy. That's a long term strategy that the business has decided on. And in usually, each functional area has some component of that profitability or any other type of metric.

 

David Turetsky  37:54

Good. But But what's fascinating about that Garrett is when you're a public company, who sets that for you, the market, there you go, Well, when you're attracting stock, you have to have these metrics to be able to focus on how does this stuff grow or shrink, whether you earn it or don't write these performance units? Yes,

 

Garrett Valencia  38:15

I think the one thing that's different for us because we're the private is that we don't have the shares. And then the the business is not willing to do something that's make a photo stock. So one of the options originally was to do a phantom stock kind of program, or they could where we could create a fake stock rate by taking the books liability versus the assets or assets versus liabilities, something like that. Yeah. And that would create a fake stock and do the same kind of metric, but it's not worth it. And it wasn't a good buy in. So we have to stick something that's actual cash based. But in the public company, it's more RSUs, our assays, right, that's that's majority of it, then the cash is more, maybe not the highest level, and this more lower level senior leadership. And by

 

Demetrice Saulsberry  38:55

the way, everybody knows the tax accounting on restricted units and options and things. It's not like the old days where you could give it away and not have anything to worry about. You have to carry expense on your books, you have to carry tax liability. There's a lot of stuff now. So there's no free lunch here. Whether you're a private company, whether you're a public company, whether it's cash base or stock base, this is just part of running your business, if you're a large company, for your senior leaders to have that kind of ownership of a company that costs money. One of the things for us as a company we did is we took a look at everyone's pay across four and we separated our employees and we looked at their pay and look at accessing what ADP has globally for everyone who were is in the same job description, the same job title, and to see where our employees were versus the national average of measuring and using all the geo data. What we did is we What our CEO said is Okay, it looks like we're right at the 50 percentile. And what we want to do what he his goal is to get those locations up to 70 percentile. And so, yeah, it was a huge undertaking. And so and, and that's what we were doing, presenting the data to the different location that explained it to them, this is where we're going to do this is the timeframe that we're going to do it in. Not necessarily, if we did it for longevity for those hourly employees, not necessarily given them, such that we do for the senior leadership, we've given them an opportunity to say, Okay, this is the next step, a lot of a lot at 88%, or 88.3% of our population, they were in the 50 percentile, we brought them to the 70 percentile across the board in different locations, where we also identify locations who were spot on and didn't receive any pay increases or anything like that. But we changed the conversation about them producing what they have to produce now. Right, so. And so that was one of the big things that we did last year. And now we're doing that for salary. Oh, it's taking a deep dive into that. Wow, that's a big undertaking. Yes. But so let's now go and talk about 2025. Hey, are you listening to this and thinking to yourself, Man, I wish I could talk to David about this? Well, you're in luck, we have a special offer for listeners of the HR data labs podcast, a free half hour call with me about any of the topics we cover on the podcast, or whatever is on your mind. Go to Salary.com forward slash h bar DL consulting, to schedule your FREE 30 minute call today. Anybody know what's happening? End of 2020 for November, thank you, there's an election happening? Well, it's gonna be a big deal. And it's gonna impact all of us in HR. And I think there's a lot of people who are very nervous about it, especially people in HR. Because there's another thing that's happening. I don't know if you've heard about this, the exemption level for exempt employees, and may not know about this. It's going up from about 35,000 to about 65,000. Yeah, if you don't, I would freak out right now Go call your general counsel, it's okay to leave, I won't feel I will not feel at all offended. Because this is one of the biggest deals to happen to the world of compensation and a long time, the Department of Labor is going to increase the exemption rate from 35,000 annual to about 65,000. Annual.

 

Garrett Valencia  42:42

But according to the practice that we have to do, we have to go with what's the most generous law, and usually it's California. But if the federal is more generous, you have to follow the most generous because you can always be more than was like for California can be more than that. Because there are cities that have more higher minimum wage, and it's still compliant as long as you do it. So if that's the case, you'd have to vote but I'm sure that other states would come up with something else because they're far below or at least matching the federal

 

Demetrice Saulsberry  43:12

minimum wage. This is the exemption status. Yes.

 

Garrett Valencia  43:16

So at the same at the same time, the when we do the exemptions as for the FLSA? Yes, they have the Fair Labor Standards Act rulings, but then each state might have a separate rule for the Department of Labor. And so Pennsylvania has a specific thing. One that I'm aware of California has one, which is two times the minimum wage in New York. So not only when we do the exemption classifications, when we're reviewing the rolls that we have to look at FLSA. On the federal level, we have to look at the Department of Labor specific ruling on the state or municipality, if there's something there, complex, what

 

Demetrice Saulsberry  43:48

a lot of companies have not focused on it at all. They haven't looked at Veraval site and probably a while as well. But this is going to force people to now reevaluate them.

 

Garrett Valencia  44:00

Yes. So what in preparation of this new ist legislation push is to take a look at the rates of what the salaried people are getting, excuse me, be exempt, not salaried, exempt employees are getting paid to see if they're at least that threshold, or me, I don't have a problem. But but some of them are very close. So every year they do an index rate, right and increase it. So I'm pretty sure that it's going to be a higher in the following year. But the other year, they tried to do this too. Unless that was California specific. I can't really remember where they tried to do that. And it didn't end up happening. No,

 

David Turetsky  44:39

it was in comment period. Yeah. Now it's been quite a period. It's,

 

Lyndsey Benson  44:42

it's, you know, in New York, we went to 55. And what a project it was, I'm really I mean, to see how many, you know, just even the communication around that. It was huge. And then like, saying, you know, you have to tell your executive team the expense Now, yes, that that it's that's gonna cause sometimes some of it you like, oh, well, they won't get the overtime and things like that. But it doesn't help. Exactly.

 

Demetrice Saulsberry  45:07

So let me ask you a question for any of you think that it's an okay strategy to just make people non exempt and manage their hours? Because by the way, you're never gonna get audited if everybody's not exempt, right? That

 

Lyndsey Benson  45:21

might not be a bad idea.

 

Demetrice Saulsberry  45:25

Yeah, again, we're not talking about legal advice here. But there are there are things you need to consider in this, you will never get in trouble. If you make everybody not exempt and pay overtime pay. But I always hear well, wait a minute, then I pay overtime. Why aren't you managing people's overtime? Then why aren't you managing your time? Like, everybody thinks that it's free, that exempt people work all the time? Like I take emails at midnight, you know, while I'm here and No, it's my time, right? We'll build I haven't caught up with that yet. Probably well, but we have to manage this stuff. If you're a manager of that kind of person, then you're doing the wrong thing. So making them non exempt doesn't change that. It just puts more cost against it. It puts more effort against it. So that's why I'm saying to people, you can do it. You're not gonna get sued for it. Unless you're not paying the right thing. Right. I mean, you guys have the manufacturing populations. Have you ever thought about making everybody non exempt? Bleeding thought, but it was okay. All right. Anything else for 2025. But by the way, you guys can ask questions of the panel, if you want to, it's okay. Well, we'll repeat them. Anything else for 2025, that's scaring the crap out of you.

 

Garrett Valencia  46:42

The fast food workers in California minimum wage, you still have fast food restaurants in California, no, but I will tell you my concern. So just because it if it impacts one sector doesn't mean it doesn't impact the rest. So I will tell you historically, which we don't do this anymore for my company. And I never did it at other companies. I only did it here for maybe two, three years, when California started to do its minimum wage increase. And they said, Oh, we'll get to $15 over three years or something. And they did every year, they didn't increase. Well, the first year they'd have to happen, what we did was every every non exempt employee in California, when the minimum wage increased $1, we gave them all another dollar to keep the spread. And then the following year, we said, let's do that for all the states, all the states that had a minimum wage increase, whatever the amount of the increase was, all the non exempt got an increase of the same to keep the spread, what it did was create a cut. Sometimes it created compression, and then it also created inequities against the exempt people. And so we stopped that, because then we had to do an another assessment to see if it matched to just for equity purposes. But with this big jump at the fast food workers going to $20 an hour what the big question is, is how can I and I'm just saying this is an example, right? A customer support rep only makes 18? How can I how can the McDonald's person get paid 20 And my person make 18. And it's just a conversation. So

 

Demetrice Saulsberry  48:10

if you can look at that, it's still laboring, it's, you have a teenager going to McDonald's making more than some I feel like,

 

David Turetsky  48:18

as I said before, it's changing the very nature of compensation in the market. And it's going to impact everything, including management levels. And I think we may have actually talked about this when we've been working together, that if you look at your salary structures, and if you all have one specific salary structure, there are going to be inconsistencies now built into those structures, because you're gonna have your non exempt levels, and then you're gonna have your professional levels and your managerial levels. If they're all on the same structure, then there's going to be gigantic overlaps for when you get from the non exempt to the exempt to the managerial and you're gonna be like, how the hell can I afford this? Well, that's the problem. That's the underlying problem. The entire cost structure has now changed. And there's nothing we can do about it because it starts out at the unskilled laborer level. This has been a great conversation but now we have to get to the bonus conversation. If we didn't discuss it enough what's the one thing that scares the crap up? Sorry, the world spirits about you in the world of pay? Demetrius I'm gonna start with you since you have the microphone. What's the one thing that scares the crap out of you?

 

Demetrice Saulsberry  49:22

It is the for me it's the expectation what people are saying that for bonuses they it's an expectation now yes. Because you're you know you hiring people and we say you know come work for us. You know, you get a bonus. But it's an expectation and we say when a business is good, we get a higher bonus. But when we when we don't do as well is like you hear people like I got more last year's become an entitlement now. Yes. So how many of you communicate your incentives as entitlements? Of course we don't. But does that change? Is there a perception of what an incentive is? So my offer letter, you owe it to me? All right, how about the ulinzi?

 

Lyndsey Benson  50:08

Ai? Like, what's that gonna do to the world

 

David Turetsky  50:10

Offer The world of pay for AI?

 

Lyndsey Benson  50:14

I don't know, I have no idea. But it's gonna I mean, we, you know, we were having conversations that AI is now you know, we're on next gen, and it's going to be able to tell us like, hey, these employees are up for minimum wage just just changing, like, change it like, it's great. It's fantastic. But what then, you know, and so it's it's kind of exciting to, it's

 

David Turetsky  50:35

exciting. But one of the things you just mentioned is it said these employees may not be at the rate that they need for minimum wage, right? What are the things that are necessary for that to be absolutely fact, their data? So what did that data the job table feeds or bring in the next gen terms, the job templates, the the position records, all of the information about that employee needs to be accurate. One of the things that we've all talked about is, data for HR is typically not that accurate. And so you may get these alerts that people may be underpaid, especially when it comes to minimum wage. It's awesome. That's great. But don't necessarily freak out. Make sure that it's right, right. Because if the data is not right, then if anything like that are correct, but I love the fact that you brought AI into this because you can't have a conversation, a modem without bringing those two letters in. Alright, Darren, how about you? What scares the crap out of you? Well,

 

Garrett Valencia  51:28

it's the AI as well, but but I wanted to die overlords or something else. I want to talk about the chat GPT

 

Demetrice Saulsberry  51:36

Oh, please do. We didn't bring that out either.

 

Garrett Valencia  51:40

It's just really quick, because I actually use it. I used it for Mexico, because there was a brand new entity, the brand from the broke ground, brand new, really. So they had to hire, I don't know, 200 people in a couple months. And then by the end of this year, there's about 1000. That's a lot of job descriptions that the team has to work on. Nobody has time for it. managers don't have time for what did we do? Shut up? Yes. Yeah. Now people may hate that. But guess what? The work still has to be done? Yes. How do we maximize the effort of people with the time that is no relative. There's only 24 hours in a day. And hopefully you only work eight hours. But you're funny. We work more than that. But it did save a lot of time. And the business a lot of time in all they had to do was just review what was generated and make the tweaks. It's better starting with something than starting with nothing was

 

Demetrice Saulsberry  52:43

in Spanish as well as English. Did it translate to Mexican Spanish?

 

Garrett Valencia  52:47

It did, but not very good. That was also not my problem. That's the other problem. They had to review that Yeah. But at least again, starting with something versus nothing. And so I have no idea if the level was correct. I have no idea if some other aspects of the education was correct. They had but that was their job as the leader to review it and make the tweaks as they normally would to with any job description. But at least they didn't have to start from their own brain.

 

David Turetsky  53:12

And as I said before, BSH was a really good job on their description. So this must have been an emergency. Yes,

 

Garrett Valencia  53:18

it was part of this analysis I had to do to particularly.

 

David Turetsky  53:32

Thank you so much for your attention. You're awesome. Thank you to our panelists. You've been wonderful. We love learning from your experiences. Thank you.

 

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