Transcript
Mark:
Welcome to People Tech, the podcast of the HCM Technology Report. I’m Mark Feffer. My guest today is Bob Laurenzo of Decusoft. They provide software that focuses purely on compensation management. We’re going to talk about integrations, the impact of COVID and the great resignation, and the industry challenges he’s keeping an eye on, all on this edition of People Tech. Hey Bob, it’s good to see you. So let me start by asking what does Decusoft do?
Bob:
Mark we provide a automated compensation software platform called Compose, and we basically enable our customers to better automate their compensation processes for executive variable pay and compensation.
Mark:
I know you talk a lot about integrations in your background material, and you’ve got integrations with several big names, UKG, for example, Workday, what role do integrations play in your strategy and in your business model?
Bob:
Well, a lot of our customers, they come to us in really one of three ways. They’re either migrating off of Excel because of the issues and concerns that you have with Excel over time, mainly with lack of security and formula errors, and just the time consuming nature of dealing with Excel. And then you have customers that add a best degree point solution like Compose to their HCM solution, like Workday, UKG, Oracle, et cetera. So we have to have the ability to integrate with those respective providers which we do. When we are integrated with them, we’ll often do the heavy lifting as it relates to the compensation, and then feed the data back to that particular system of record, whether it be Workday or UKG.
Bob:
Mark over 80% of our customers do have Compose running with of those large providers. The other types of people that come to us are sometimes those that try and do a homegrown system, and then after time they just migrate to us because they realize it’s expensive and it’s hard to maintain. So they’ll come to us to have a cloud based solution.
Mark:
Now I imagine right now, things are getting pretty interesting in the world of compensation. With COVID, the great resignation, and all of these things, from your perspective what’s going on, and what are the impacts you’re seeing?
Bob:
Everyone’s talking about the great resignation and with good reason, I think there’s 2 million people resigning every quarter over the last couple of quarters. Some companies are seeing nearly a quarter of their workforce resigning. I think working from home is dramatically impacted what people do and how they do it. I think when we go back to some type of normalcy into 22, I think the working from home and the flexibility is going to be a trend that continues permanently. In terms of how that relates to comp, one of the biggest factors is, do you compensate someone based on where they live and where they work? To me it’s all about compensating people fairly based on their job they’re doing regardless of where they’re working. But some of the trends I think with the working from home and great resignation are going to continue.
Bob:
In terms of how things impact the compensation as relates to COVID, we’ve seen a lot more frequency types of payments. Some things are changing in the world of comp. When you try to incent people not to leave, we’re seeing some things where people are often skipping some of the typical promotions and the succession planning. So if you have a at risk person or a high performer, you may forego a position and move them forward one or two positions to justify an increase.
Bob:
There’s also things that we’re seeing that they’re accelerating some of the vesting schedules. So if you have equity and it’s a four year vest, and some key employees they’re seeking board approval to get a vesting schedule cut in half so that you can accelerate some of the worth to those particular high worth employees. So a lot of trends and things happening, comp used to be a end of year type scenario. We’re seeing more frequency with mid-year cycles, even quarterly and believe it or not, some companies are doing monthly compensation cycles. So compensation tools are being used more of a year round tool, providing a lot of reporting and analytic functionality that often benefits, not only HR, but finance as well.
Mark:
Could you talk about that a little bit, the idea of compensation being more than an end of year issue?
Bob:
Yeah.
Mark:
How is it changing?
Bob:
We just see that a lot of our customers especially in financial services are paying incentives more frequently than just end of year. It used to be especially on wall street, you get your end of year bonus. We’re now seeing some mid-year bonuses and cycles being paid. And in other industries, retail manufacturing, and what have you, they’re trying to incent people more often, so we see quarterly and monthly. And again I think a lot of this has to do with what’s happening in the workforce, not only the demographics, the working from home, but just trying to incent people more frequently so they value their employment. Another thing we’re seeing is better communications and coming out of a comp system enables you to provide a compensation statement, and also a total reward statement, which encompasses all of the components, both cash and non cash part of your compensation. So putting a number to your benefits, putting a number to your perks, your 401(k) matches, and some of the nonstandard type things and communicating them to the employees again, as a way to retain talent and remind them of what their overall compensation package is.
Mark:
Now we’re recording this at the end of October, 2021, and so I think we can start to talk about 2022. So let me ask you, as you look out over the next year, what are the things that concern you most in this whole area in comp and comp technology?
Bob:
Well, I think what concerns me the most is also an opportunity. A lot of things are changing. I think there’s going to be more, the trend of more frequency in terms of payments and payment types. So again, you need a system that can help you manage and also quickly adapt. So if the board wants to change things and pay frequently, change some of the comp plans, and some of the methodologies on the fly, it’s kind of hard to do that if you don’t have an automated system. So I think the types of payments are going to… types frequency of payments are going to continue. And I also can see that the great resignation is going to continue to a certain degree and then hopefully kind of level off as we get back to normal. A couple things we haven’t spoke to relative to diversity, equity, inclusion, and the ESG initiatives are out there.
Bob:
I think with some of the changing of potential tax laws and things like that, you could see a little bit more emphasis being put forth around the governance portion of the ESG as it relates to executive compensation, and I think with the… having a tool that enables you to extract some of the analytics and reporting functionality, I think is going to be really important, because if you do get audited, you need to have a tool that can quickly give you access to accurate information. So I think the ESG is going to to continue to be a little bit more prominent as we get into 22 as well. Does that answer your question Mark?
Mark:
It does. Yeah. And let me just ask you one more question which is, could you take those thoughts and sort of put them in the context of your product, of your roadmap, what are some of the big challenge you think you’re going to have to address for your customers next year?
Bob:
I think a couple of the biggest we’ve touched upon, but predominantly giving our customers the ability to extract data in a timely and accurate manner. So we’ve incorporated dashboard and analytics module into our platform. So basically it enables our customers to get access to data without having to buy another tool. So the dashboard analytics are something that are going to… we’re going to continue to evolve and provide our customers, because we often see finance coming to HR, asking for information, and then HR has to scramble and try and find answers to appease the finance folks without having a tool or the ability to do that, it becomes difficult. So the dashboard analytics is something we’re going to continue to evolve for our customers, and try and stay ahead of them in terms of what they want and provide the functionality for them to do that.
Mark:
OK. Well Bob, thanks for taking the time to talk today.
Bob:
Thank you, Mark. I appreciate it, and I really enjoy the time together.
Mark:
My guest today has been Bob Laurenzo of Decusoft, and this has been People Tech, the podcast of the HCM Technology Report. We’re republication of recruiting daily. We’re also a part of Evergreen Podcasts. To see all of their programs visit www.evergreenpodcasts.com. And to keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.
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