Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM Technology Teport. I’m Mark Feffer.
My guest today is Suzanne Harris, the Vice President of HR at NexusTek. They’re a Colorado-based IT managed services company and she knows a lot about pay. We’re going to talk about new ways people look at pay since the pandemic, how different employers take different approaches, and new flavors of transparency, all on this edition of PeopleTech.
Hey, Suzanne, it’s good to see you. And what does NexusTek do?
Suzanne:
We are called a managed service provider. We provide technology services and support to small, medium-sized businesses, and some large ones, nationwide and a few in Canada.
Mark:
We wanted to talk today about pay basically. There’s a lot of things going on under the hood with pay. It seems like there’s transparency laws being enacted, there’s earned wage access growing in use. What’s your view of the landscape when somebody says “pay” to you?
Suzanne:
Well, these days of course with inflation, it’s very first and foremost on their mind and they’re obviously concerned about that. Typically, wages lag behind inflation anyway and take a little time to catch up, but we do an annual comp review every year and then look at the salary survey data to be sure we’re paying competitively.
But yes, pay is kind of first and foremost on everybody’s mind, especially with as we talk of recession. There’s been a lot of layoffs here recently in the big tech space. So it’s certainly first and foremost, in the minds of employees and in the minds of the executives.
Mark:
Do you think that the way you are handling it is typical, or are different employers doing different things without much rhyme or reason to it?
Suzanne:
Well, that’s a great question. I don’t know what’s typical, but of a company our size, I think a lot of companies tend to maybe wing it a little bit, but we rely heavily on the ADP salary benchmarking tool to annually look at our comp. And even mid-year if we feel it’s necessary for certain positions, or we’re hiring someone in a new type of role and we need to get an idea of what we need to pay to be competitive. It’s a very large data set. It’s updated every month, so we feel that that’s the best tool for us to use to make sure that we’re competitive in our pay, and paying fairly and according to our comp philosophy.
Mark:
What’s your view about these transparency laws, where companies are having to publish their minimum rates on job ads and such?
Suzanne:
It doesn’t surprise me. I could kind of see it coming. California, of course, that’s where we have a great deal of employees out here. In California’s not only just the pay transparency laws, but now any employee or any candidate can ask for the salary range of their current role or a role in which they could be applying. I know New York has something similar. Colorado started it maybe a year or so ago with the have to put the ranges in your job posting.
So one, I saw it coming, it’s going to continue. More and more states are going to start to implement this, and I think it’s all headed towards, again, pay transparency, pay equity. And now, along with our types of EEO reports that we have to file, I think pay is going to be an additional data bill that we have to include because I think it’s going to be watched pretty closely.
Mark:
I’m wondering, well, when you say this will be a data point that you have to include, what’s that going to look like? It’s not going to be filed on an individual basis, I assume, but how are you going to figure out the numbers that have to be reported?
Suzanne:
Yeah, that’s a good question. California’s already a little ahead of that. Companies who have 100 or more employees, they have to file this EEO-1 report with the federal EEO Commission every year. And in the past it’s just how many people do you have in technical roles, executive roles by race. I think now there’s going to be an additional cone. While you said it’s not individual, there’s going to be some sort of average pay or something that’s included in those statistics. They haven’t federally anyway, given us that format in which they’ll want it, but California is looking forward. I think individually we have to start filing those in May.
So it’s a trend that I see is going to continue. I mean, obviously your progressive states are going to start going to be ahead of it, Colorado, California, New York. But it’s a trend we’re going to continue to see, so we might as well get prepared.
Mark:
Well, it leads right to my next question, which is how does an employer get their arms around this or their head around it really. You suddenly got a lot of moving parts going on, how do they tame it?
Suzanne:
Well, let me see if I understand your question right. In other words, how are they going to manage the compliance part of it?
Mark:
Yeah. And take this great range of data and make it approachable, they make it something that they can actually use.
Suzanne:
Well, that’s where we rely heavily on the comp benchmarking tool, like I said, in ADP, just to make sure that we are in the proper range, not just for being able to recruit and retain employees, but also so that we’re in the right range when we have to comply with these rules and we don’t get challenged on our pay. And then it’s fair, it’s unbiased, here’s the range, doesn’t matter your race, your gender, here’s what we’re paying.
And so I think they need to start getting out ahead of it and start establishing their pay ranges and find some data that can help them establish the competitive range.
Mark:
I’m not sure what size companies your customers are. Do you have a range by headcounts or something like that?
Suzanne:
We have. Some of our customers are small, and I couldn’t even tell you, but we do have some very large customers as well. I wish I could answer that question more clearly but I mean, we have the full gamut of the small clients and some of our large clients.
Mark:
How do you see them approaching this? Meaning the small companies have different dynamics than the larger companies-
Suzanne:
Sure.
Mark:
… and how are they doing?
Suzanne:
Just because a company is very large doesn’t mean that they necessarily have all their HR processes well-designed and efficient, any more than sometimes a small company does. Hopefully on what I’m saying there makes sense. But they need to start getting their arms around it, they need to start establishing these pay ranges, and they’re going to need to get the data to back it up because it’s going to become a compliance issue. It’s no longer just a transparency and it’s the right thing to do in your job postings, it’s going to become a compliance issue.
And so whether they’re … Now I know in California, all you have to have is 15 employees, which may be easier if you’ve only got four or five different types of roles. But the big companies with a lot of different positions and different geographies, it’s going to be a pretty large undertaking to prepare all these ranges, and may even need third party help in the way of consultants or a very good benchmarking tool.
Mark:
It’s interesting, you’re using … No, nevermind, it was going to be a dumb question.
Suzanne:
I could give you a dumb answer.
Mark:
That would be either really great or really sad.
Suzanne:
Yeah.
Mark:
I’ve come across a fairly new term, compensation construction. Are you familiar with that?
Suzanne:
I’m not, but I’ll have to go do some research on that to make sure I am familiar with it in the future, comp construction.
Mark:
Yeah, I can’t actually tell you how much about it either. When you Google it, you get a lot of hits about compensation in the construction industry.
Suzanne:
So it’s related to the construction industry?
Mark:
No, it’s not. Compensation construction isn’t , but Google thinks it is.
Suzanne:
Oh, Google thinks it is. Well, I’m thinking obviously what it takes to build. It’s one thing to just, like we talked about, get your arms around these ranges that you need, but you really need to make sure you’ve got a handle on your job descriptions, doing analysis of the job that you don’t have this title inflation. A lot of people, instead of [inaudible 00:09:48], give big titles to people. Now you’re trying to look for salary survey information related to this title, it’s important you look at the actual job duties. But that title inflation can sometimes come back to bite you.
Mark:
I don’t know if this is a good question or a bad question, but I’m going to ask it anyway. With all of the things that are going on today, post-pandemic, unsettled economy, who knows what the labor market’s going to do next, it feels like compensation would be sort of at the top of everybody’s mind on both sides of the table. Is that in fact true, do you think? Are people following pay and compensation more closely than they might have in the past because of the way things are panning out right now?
Suzanne:
You’re talking from an employee perspective, right?
Mark:
No, actually it could be from both.
Suzanne:
Well, pay is clearly … I mean, that’s why people go to work, let’s be honest, it’s their pay, and it’s important to them. They’ve got families to raise and expenses, we get that. But coming out of the pandemic I also see, and I know this is a cliche, but the work-life balance is much more important to them. This has been a tough three years. A lot of isolation, a lot of change in family dynamics. It’s been challenging for many folks, and they’ve had a change in their priorities, and so pay is certainly one of them.
Also, their relationship with their manager, I think managers need to be more empathetic these days. And I think people are just looking at their life through a different lens a little … It’s like, it’s no longer this, “I’m just going to give my all to my employer and hopefully I get paid fairly well.” Now it’s, “I’m going to give them everything I can, but my family’s going to come first, but I still want to be paid fairly.” I don’t know if that’s a good answer there. Maybe I can restate it, but I think you know what I’m trying to say. There’s a different feeling coming out of this now three years later [inaudible 00:12:24].
Mark:
Yeah. No, I think that’s a good answer, and that’s one of the more interesting movements that’s going on, is people changing their perceptions.
Suzanne:
Yeah. This global pandemic was life-altering for many people, not just the way they work, their financial picture. Sometimes one or both of them. In a dual-income household, one or both of them lost their jobs. They had to homeschool their children. Things have really changed. And mental health of course is a big thing now too, and they’re focusing on their priorities.
Mark:
Suzanne, thanks very much. Thanks for joining me today and talking.
Suzanne:
Hopefully I’m giving you answers worth someone listening to, Mark. Always happy to help.
Mark:
My guest today has been Suzanne Harris, the Vice President of HR at NexusTek. 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.
Image: iStock
