Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer. Today, I’m speaking with Joanna Kim-Brunetti, vice president of regulatory affair and general council for Trusaic. Their compliance software helps businesses reduce their risks, maximize opportunities, and keep up with constantly changing regulatory requirements. We’re going to talk about software, data, and using them to stay compliant on this addition of PeopleTech. Joanna, it’s nice to meet you. Thanks for being here. Can you tell me about Trusaic? What is it that you do and who do you do it for?
Joanna:
Okay. Trusaic is a workforce regulatory compliance software company. That’s a mouthful, but basically we help organizations reduce their risk, maximize strategic opportunities, and keep up with rapidly changing regulatory landscape worldwide. So what we do is we provide compliance software overlaid with expertise. And so whether it is in the ACA space, whether it’s in the DEI space, because those two environments have a regulatory and an analytics portion, we basically have sort of a triad of services. It’s the analytics, it’s the regulatory expertise and with that our sort of professional overlay in terms of handling the data. So that’s sort of generally speaking what we do and what we provide. Our clients are not industry specific. It’s just whatever organizations have workforce regulatory requirements.
Joanna:
So for example, organizations that have pay data reporting. Those agencies, so for example, California recently instituted this pay data reporting with very specific regulatory requirements for compliance. It involves a lot of data analytics because what you’re doing is you are submitting a report of pay and pay has a very specific meaning for certain employees who are also specifically defined for a specific jurisdictional group and then submitting that report. And so that process involves a lot of data, a lot of regulatory understanding and over that basically the platform to run all those analytics and submit that to the agency. Now that’s part of, for the pay equity space. Then you have this overall litigation and regulatory agency risk pertaining to pay discrimination. So it’s not enough just to get all the data to submit the pay data reporting. But the question is, well, what exactly have you submitted? What are you telling the agency where you are in terms of whether or not there are pay disparities?
Joanna:
So the pay data reporting provides just sort of the raw numbers of, for example, on the gender level, what women are making as compared to men for each job position. But that paid data reporting doesn’t take into account what I call legitimate business factors. And what they are, are like things like the reason why Susie is getting paid less than John is because Susie has one year of experience and John has 10 years of experience in a role where they have basically the same function, but John, he is getting compensated for his deeper understanding, experience, what have you, so seniority, for example, tenure. There are other factors that justify why one person is getting paid more than another, even though they are ostensibly performing the same function.
Joanna:
So the pay data reporting will identify just what Susie is getting as compared to John. What a pay equity audit will do is show what Susie is getting paid to John with respect to when you account for those factors. And what you’ll see is the pay data reporting might suggest super large gaps and the pay equity audit will shrink that gap and perhaps eliminate it. And so those kind of analytics involve statistical regression and modeling. Our software has been developed by PhD statistician who oversees the program.
Joanna:
And so what our solution provides to our clients is not only reporting per various regulatory requirements, but also, proactively conducting an analysis of the pay equity to see if really is there pay inequity. And it also identifies, because of all this statistical analysis, it can help identify where there are problems and it gives employers an opportunity to remediate and figure out what the problem is. And if you don’t know what the problem is, you don’t know how to fix it. So that’s our sort of pay parity solution. We also provide for clients on a larger scale, not just the pay parity piece, but also the diversity, equity, and other aspects, not just pay, whether it’s development opportunities, hiring promotions, as well as inclusion. It’s a mouthful, but that’s just generally what we provide in that space.
Mark:
And who are your customers?
Joanna:
Well, we are industry agnostic because there really isn’t any sort of client type that doesn’t have these kind of regulatory requirements, because our solutions are triggered by the regulatory requirements as opposed to the type of industry, like all employers are subject to these requirements regardless of what kind of business they run. So it’s really not a type of industry specific. Having said that, we tend to provide solutions for larger organizations. Employers in the say for example, less than 50, they have a much smaller number of employees and so the regulatory requirements aren’t as triggered with the same frequency.
Mark:
Okay. Now we’re living in an interesting time right now. We’re in the middle of [crosstalk].
Joanna:
Yes we are.
Mark:
18 months into the pandemic, politics is weird, the business climate’s unsettled. How is that impacting your business?
Joanna:
Well, that’s a really interesting question. So with respect to our DEI solution, just over the last few years and really kind of accelerated by COVID between Times Up, Me Too, aftermath of the death of George Floyd. All of these events over the last few years and then just the nail in the coffin with COVID is really showing this disparate impact between men and women, as well as the sort of disparate impact for people of color. And so what that really has done is it’s highlighted the need for DEI. And the reality is DEI diversity, equity, inclusion that’s been around, the concept has been around for a long time. And quite frankly, over the years in the past, there’s been a lot of lip service where everybody wants that, but are they actually doing anything about it?
Joanna:
And so we actually conducted, we sponsored a survey conducted by Harvard Business Review and partnership with SHRM to look into sort of DEI. And as I had mentioned with COVID really kind of really putting a fire on this issue, we’re seeing that it’s becoming increasingly important and lip service is just not enough. But we’re also seeing that, oh, when we did this survey, what we’ve seen is the DEI programs to date, definitely vast majority, they understand that it’s a strategic priority. But the reality is there’s a lot of sort of great intentions, but limited success. And so we’re seeing that the limited success is becoming less and less of an acceptable outcome. And with COVID really highlighting the huge pay problem with respect to people of color and women, they’re seeing that they got to do something about it.
Mark:
Let me ask a follow up on that, which is you keep hearing stories about employees becoming more demanding, really expecting their employers to provide real solutions and enact real programs that are actually going to have some kind of impact. Do you see that? And do you think that it’s actually happening?
Joanna:
I think it’s happening more and there’s this thing called an inclusion survey and what that does is it measures employee’s perceptions. That’s not necessarily what’s actually going on, but it’s how employees feel about things. And the fact that I use the word feel, I’m not trying to suggest it’s not important. It’s extremely important. Because without employees, no organization can succeed. And so these inclusion surveys, which can be tailored to each organization what that does is it sort of captures how they feel about anywhere from, do they feel like they’re valued at the company to do they believe that there’s sufficient diversity within their organization? I mean, it could be any kind of question, but with employees demanding more, having this inclusion survey is really important to kind of gauge what it is they want. What the employer can do to sort of bridge sort of what the employers can provide to employees.
Joanna:
And what employees want from their employers. The inclusion survey is really important just from the overall DEI. And importantly, inclusion is not focus specifically on improving diversity or from a person of color or non male. It is about everybody, whatever interests you have, whatever category you fit into. It’s about employees feeling included as part of the organization. And as I alluded to earlier about the survey that was conducted, really one of the key barriers to DEI success is inclusion or the notion of the lack of culture, of DEI being important, the sort of inclusivity of folks within an organization. I’m not sure I answered the question, but I think the key point is that employees, the inclusion survey is critical to sort of bridging between what employees are looking for, what they want. And I hear you, I do think employees expect more, but part of the concept, expecting more is to understand what it is they expect. And so doing that kind of survey really helps sort of giving them what they want.
Mark:
Okay. Now I was looking at your website and one of the things it says is that regulations can be an opportunity to demonstrate transparency and integrity. Could you talk about that? I read it and I wondered, well, how do you turn regulatory activity into how you’re perceived or something along those lines?
Joanna:
Okay, sure. So a sort of easy example is regulatory requirements dealing with pay data reporting. That at least in the US, that pay data reporting is not transparent yet. I believe Illinois just enacted some new laws where pay data reporting will be transparent, where they’re going to be posted, certain metrics that come out of the pay data reporting onto the state’s website, agency website. So you have these regulations and the vast majority, at least within the US is to just submit it. If you’re going to submit it, it’s to an agency sort of under this sort of confidentiality veil. And so the idea is like Illinois, where they’re pushing that, where it’s not just submitting it to an agency, but having that kind of transparency to employees is really important in the sort of DEI success.
Joanna:
And these sort of considerations all kind of bleed into each other. They are not siloed. If you actually do the pay, sort of pay data, conduct the reporting, do the pay equity analytics, the idea is you take those results, you share them with the employees. And you may not have actually achieved success, but if you take those results and share them with your employees and show your plan on how you’re going to get to equity, that’s going to have a humongous effect from an inclusivity standpoint. The survey that we conducted is part of this inclusivity aspect, was the notion that the management was actually being transparent of what’s going on. There’s been increasing expectation of pay transparency from the standpoint of like the vast majority of employees today in the various states, there used to be kind of, sort of secrecy in who’s getting paid what.
Joanna:
There’s less of a trend for that. There’s been new laws that basically say employees cannot be retaliated against for sharing that information. And there is this push for everybody to know what everyone else is getting paid, not necessarily individually, but as a company. And these regulations are really kind of on the one hand pushing that and then on the market forces on the other hand, pushing this transparency. So using the regulations like, you can be defensive about it and basically wait until the law makes you do it, or you could get ahead of that, do the sort of pay equity audit to figure out where you are, because you can’t really have a message when you don’t even know where you are.
Joanna:
If you do that, because these regulations will eventually get there, but get ahead of that. Use those existing regulations from this sort of pay data reporting that is already going to be submitted to an agency for example. Use that to share information with your employees. That transparency, sort of the DEI success space, there’s sort of two avenues and they both need to work together. On the top level, you need management to sort of have a plan and execute it. From a bottom up standpoint, you need employees to feel like their part of the solution, that they are included in it. And so that transparency, they work together simultaneously. You can’t just have one without the other. It’s not as effective. So our view is you can use these regulations, like use that to springboard into disclosures to your employees about where you are, where you want to be, and how you’re going to get there.
Joanna:
And you need to have the metrics to do that. Like a lot of perceptions and as I mentioned, inclusivity, these sort of inclusion surveys, they just capture, I mean, it’s important from a metric standpoint, like what number of people feel about a certain thing, but they’re not necessarily capturing what’s actually going on. So for example, employees might feel that the company is not diverse at all, but if you actually look at the metrics, as compared to the geographic location, it actually is very representative of the location. And at the same time, you can find out how they feel about the programs that are in place and how effective they are. So the inclusions survey actually sort of creates metrics for you to figure out how to craft your plan.
Joanna:
So these are all things that are kind of amorphous because you got to start somewhere. You need to have a plan. Once you have a plan, figure out the metrics of where your baseline is, where you want to be, how you’re going to get there, how you measure accountability, and all of these, the pay transparency that’s going to come out of this, part of this sort of plan. You start with the regulation, you come out with the pay transparency. I’m not sure I answered the question, but yeah, these are the things to consider.
Mark:
Okay. Actually, I think you did answer the question. So thank you. I want to shift gears and ask something that’s more about the business. You have relationships with a number of HR technology vendors like ADP, and I wanted to ask how do those relationships fit into your business model? What do they do for you?
Joanna:
Well, what they do is it gives us exposure to additional clients. We’re very proud of our solution, but we want to increase our exposure. ADP is a great platform because it has a wide variety of clients and really all employers, even employers under 50 need to take a look at this. And so it really gives us an avenue for additional clients that may not be familiar with our services.
Mark:
Well, Joanna, thanks very much for being here today. I appreciate your time.
Joanna:
Well, thank you for having me.
Mark:
My guest today has been Joanna Kim-Brunetti, the vice president of regulatory affairs and general council for Trusaic. And this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication 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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