Compensation in the New World of Work
As companies look towards planning financial budgets for 2021, there are new and unexpected challenges for employers given the increasing prevalence of remote work and welcomed new focus on pay equity. We’ve brought together leaders in compensation and human resources to discuss solutions for employers and employees. M13 Partner and Head of Talent, Matt Hoffman, hosted a discussion with bethanye McKinney Blount and Samantha Feldman for a deep-dive into compensation for a changing workforce.
bethanye joins the conversation as Founder and CEO at Compaas, a compensation intelligence platform. Compaas provides insights, analytics, workflows to help educate companies and employees on compensation. Samantha shares insights from her role as Head of Compensation and People Analytics at Gray Scalable, an HR consulting firm specializing in fast growth for startups. Matt Hoffman moderates the conversation with a background in People Ops and Organizational Psychology.
Watch the full conversation below with Matt, Samantha and bethanye for a deeper dive into best practices for compensation. Our speakers navigate the issues around compensation in the market, compensation strategy in the new world of remote work, and so much more.
On the importance of compensation philosophy:
- Compensation philosophy is more than just salary ranges.
- Having a framework, philosophy, and strategy allows employers to be proactive in how they compensate employees.
- Compensation philosophy goes beyond salary, including the value of benefits and company culture.
- As a company, you need to ask introspective questions. Who are we? What behaviors and outcomes do we value? Where do we sit in the market compared to competitors?
“It’s about your proactive strategy for managing compensation at your company. That is how you set salary targets. That is how you think about levels, how people get promoted and paid, and how that data is supported. The most important point there is that it’s proactive.” - Samantha Feldman
On the importance of pay transparency:
- Pay transparency is more than salary numbers posted on a website. Pay transparency means your employees know why they make what they make, and understand how to make more money tied fairly to performance and impact.
- It has to start from the top. Pay transparency has to start from a place of philosophy and strategy, otherwise it’s data without context.
- Communication is key to having transparency. There needs to be intentional communication from the top down on salary range, and there needs to be strategic explanation behind it. Employees need to understand the relationship between the inputs and outputs
- Learn more about compensation services with Gray Scalable.
“Pay transparency means that every employee understands how much money they make and why, and how they can make more – fundamentally, that's it. Everything for pay transparency plays into that.” - bethanye McKinney Blount
On building compensation ranges:
- There’s an understanding of where employees are, level-wise in the market. There’s also understanding of who you are as an organization, and where you need to compete from a percentile perspective. Not everyone can (or should) compete with Netflix or Google, and that’s okay.
- Companies need to be introspective on balance – for example, many smaller companies are lower cash, higher equity in terms of compensation.
- Is there opportunity for growth? Pay transparency incentivizes employees to not only stay and grow with the company as it continues to build, but to also understand when and how compensation increases may be available.
- For more help with startup compensation, take a look at the Compaas blog.
“Compensation is about 20% data, and 80% how you communicate it effectively to the organization.” - Samantha Feldman
On compensating employees who move to different markets in a remote world:
- Before COVID, it was very common to set salary ranges based on Metro area and market rate. This has been a longstanding practice in HR for many companies, especially in New York or San Francisco.
- It’s dependent on the volume of employees moving. If it would kill morale to adjust people’s pay to a lower rate for moving, you don’t need to do so philosophically, especially if it’s only a few people.
- It also depends on where the employee plans to relocate. If there’s only a 10% difference in market, it may not be worth it to lower their salary.
- For larger companies, a market-based strategy is recommended. For smaller companies, it’s case by case, with some companies choosing to re-evaluate post-COVID when employees return to an office environment.
- Compaas has put together the ultimate guide to get started with remote compensation.
“Compensation is so much about emotion and feeling. It’s about the employee feeling like they paid fairly, [and that’s so important] because that is such a subjective thing.” - Matt Hoffman
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