Charlie Franklin (1:11)
All right, let's go and get started. Welcome everyone. My name is Charlie Franklin. I am co-founder and CEO of Compa. Compa is real time market data powered by job offers for compensation teams, navigating volatile markets in the era of pay transparency. And I founded the company after a decade in HR as a compensation leader to build a source of market data that I wish I had. I'm joined by my friend Tristan Orford, who I'll introduce in just a moment. Before we begin a few notes. We encourage you to submit questions throughout the webinar, please feel free to share your thoughts and insights in the chat. We'll see those questions and try to answer them live if we can. If we don't get to all of your questions within our time today, we'll do our best to follow up with a response. And the recording of this webinar will be shared with everyone who's registered in the next 24 hours. So I'd like to introduce Tristan, Tristan is VP of total rewards and M&A at SentinelOne leading cybersecurity company based in Mountain View, California. He joined SentinelOne in 2022. And prior to that he led executive and broad based comp at Electronic Arts. And before that led the global comp team at Riot Games, building programs and practices during a period of very substantial business and headcount growth for that company. Tristan began his career in finance, working in investment banking and private equity before making the transition to our world and total rewards. And let's see Tristan grew up near Portland, Oregon, and received his degree in International Political Economy, silicon laude from University of Puget Sound and Tacoma. And he holds both the CCP and GRP certifications from World at Work. So with that, let's get started Tristan, welcome. Today's topic, in my mind is really about how these market pressures are impacting tool rewards teams day to day. So let's start there. How is market volatility impacting your day to day world and comp?
Tristan Orford (3:42)
Thanks, Charlie. Yeah, and I think there's the short version is there's a lot of ways it was actually as I was thinking about the session today, I actually thought it would make sense to start with acknowledging the movement we're in as total rewards professionals and potentially for other adjacent folks in the HR space as well, in case any of those folks are joining us, I think the story is very much the same. And I think it would be understandable for a lot of those folks to feel a little beaten down in some ways after the last few years we've been through, not that our lives I mean, there's plenty of stuff that's always challenging about any job but the the roller coaster we've all been on over the last few years, it's been quite a lot. And so again, it would be understandable if folks feel a little bit drained or beat down. But the other piece that I wanted to offer up and I think we'll cover a lot of this today and give people some helpful tips, which is really the the goal of today's session is that this is also our moment in many ways to add in a lot of value. And I think it's a great opportunity for us to do a lot of good for the organizations we're in and the people that we support, and also to build our own careers and capability. So hopefully folks, you know, pass along some of that energy to folks who are joining on the call I'm in for I see a few familiar names in the list and unfortunately can't see faces but good to see those folks on there and in for folks who I haven't met before, great to meet you all. So, getting into some of the specific ways. So you mentioned some of the market forces and how those are impacting our teams, I think a lot of it is the macro synthesis of all of it is that it's caused us to have to think a lot more creatively, right. And there's a lot of different things that are happening that are impacting that, right, if a few of them, this is probably not an exhaustive list, but we have huge amount of pressure and disruption on our cost profile as a business, right, the big thing that we manage as total rewards professionals, I'm thinking namely, things like inflation, right. And that's affecting both pay and benefits programs and a pretty material way over the last few years, we're just starting to see some of that come through on the benefit side as an example. But that's been happening on the pay for the last couple of years. It's also coupled with constraints on cost, as organizations sort of manage their own cost profiles and sort of come to be a different interest rate environment that we're in a couple years ago, we also have constraints on the talent supply. And those things are all happening at the same time, usually, you know, the, at least over the last 40, 50 years, you typically don't see the both of those things happening at the same time, right? Usually, if there is more, you know, constraint on costs, that's usually in an environment where there's gonna be more laxity in the labor supply. And we're seeing both of those things hitting at the same time, we've got to figure out again, what the heck to do about that. And then there's also just the more the heightened level of economic volatility and uncertainty, you know, things like geopolitical conflict and other stuff like that at a higher level than we've seen over the last against certainly a couple decades. And then last but not least, regulatory pressure and changes on that front. And these are, you know, I think all of these are cycles that ebb and flow. But we're seeing kind of crests of all of those cycles of these from recent memory. I'm all happening around the same time.
Charlie Franklin (6:48)
Yeah, I see them, kind of talk about them as these multiple, simultaneous shocks to the day to day of compensation teams. And the maybe the heuristics that you rely on rely on the norm, longstanding norms are just being confronted with the reality that begs for change. Talk to me a little more about the opportunity for creativity. And I'll note, just as you said, kind of your vibe check. Look, total rewards is in a difficult position when this is the team that is orchestrating a lot of the work surrounding reductions in force. So for those folks on the call, who've had to go through that, I've been there, I know, challenging it is and have a ton of empathy for what you just went through. With that being said, the creativity on sort of a personal and team level for compensation, I think does become more important and just more opportune, when the markets are challenging like this. So share more Tristan and like, whether it's today, at SentinelOne or even in the past, you know, for that, whether you're kind of early mid career or compensation leader, maybe you dream to be at places like riot and EA, where you had the rocket ship growth, but how do you meet a really important set of experiences in your career when the economy sort of sucks?
Tristan Orford (8:22)
Yeah, and I think it's really as total rewards, folks, it is probably the place where we get to add the most value. And not to say we don't get to add value in other contexts. But I think if the, when we're forced to confront trade offs, and environments have constrained that is where we should shine, right? Because we're actually helping to optimize within that environment versus I mean, it's very easy to just say, Hey, we're going to add something new. It's nice to be Santa to play Santa Claus, I, you know, I've enjoyed those moments myself. And there's, there's a time and a place for that. And that is that is a good thing. I'm not saying that organizations should never do those things. But I think when we have to make hard choices, that's where we can actually do the most good. And it's not just in a time of crisis, that you should be doing those things either, by the way. So I think a lot of these, you know, for folks who maybe aren't in the same industry or aren't in the same, I'm going to copy out all of what I'm saying in the sense of it's coming from the perspective of being intact. And going through some of these cycles, as you mentioned, with the ebbs and flows of the recent couple of years that we've been through. But some of the folks on the call may not be in that same either that same industry or be experienced, and they're probably will at some point. So again, these cycles tend to come and go for for all of us at various different times. And I think a lot of these lessons can carry through to other times as well, not just times of crisis or more restrained environments. But I think a lot of it's about putting everything on the table, right? And we'll kind of get into some more more specific examples, but it is thinking about everything critically and making sure that for all the places where your organization is making investments be that of time or money, that you're actually getting the best return for them. Not just you know, hey are some people using it but it's like is this is this time or money better spent in this in one particular area, one particular program one particular vendor versus another. And not I think now we probably have more air cover than ever before, generally speaking to make changes around that stuff. But again, those are generalizable lessons. And I think you know, that that sort of critical thinking is stuff that I think will serve anyone well in their careers or thinking about how to either, you know, navigate this particular moment or grow their career within our space.
Charlie Franklin (10:33)
Yeah, look, I strongly agree with that. And, and I'm excited to get into some of the specifics in a little bit. And we'll certainly draw from my own experiences, when I was a comp leader, including at Juniper Networks, where we went through some turbulence, and, you know, the total rewards, importantly, has a seat at the table, at the highest levels of the company, of course, because companies fundamentally compete in three markets, the commercial markets, the capital markets, and the talent markets. And the rewards represents how much you spend in talent markets, when times get tough, the role that you play in that room elevates because compensation is for most companies, certainly in the knowledge worker industry is the number one in aggregate line item spend of the company. And when you're trying to batten down the hatches, you really rely on this team to step up. And so, you know, going through that personal transformation of yes, putting together these layoffs is terrible towards, okay, we're a lean company with more focus than ever before, where successes was always important. But as it's just more acutely, at the center of not just the business, but support teams like compensation, it is an opportunity to step up. And that mindset, bringing that growth mindset is, I think, really the beginning of tremendous learning experiences in Comp. And I guess to maybe, Tristan before we dig into specifics, too, I am talking about kind of the personal and compensation and total rewards team level. What about the company overall? And again, whether this is SentinelOne specifically or drawing for your past experiences. How does the market turbulence affect the company culture and just the language and priorities that are set by the highest leadership? Whether that's the board or or senior management?
Tristan Orford (12:40)
Yeah, well, I'll mix a few different things, right, including current experience, as well as what's what I've seen in other places. And from other times. I think it probably can go in different dimensions in different directions. This is one of those moments, it's a trial moment, right, and there's different paths that can then be taken, depending on how leaders and how organizations choose to respond. And so this is, you know, again, being an HR teams more broadly, the interface that you have with managers and leaders super critical, right, because they're the tone they set with their teams, the way that they're managing their organizations, you know, it can either be this can either be a moment for us to come together, or it can be a moment where people get, you know, get divided or distracted. So, I think we've probably all seen examples of both of those, both in our, you know, microcosm, in particular teams, or particular leaders and managers or with with companies and organizations as a whole. You know, any strain on the system, I think you can, you can think about it, statistically, what is it going to do, but this is a place where we do, we do have some agency. So that's where, again, where I think it's a really exciting and dynamic time for people in our field to to get involved and to try to do better I and, the other part of it is you won't always be successful, right? If we're gonna kind of pedal in some perspective and knowledge for other folks that are out there as they go through their career. I think, you know, one of the things that I am certainly I still struggle with this today, but certainly earlier in my career, I struggled a lot with this, you want to save everybody, right? You want to make all those engagements in your action successful, not all of them will be. But I think I do firmly believe that in the roles that we have, we can continue to move, move the agenda forward and make organizations more successful than they would have been otherwise. So that's really the name of the game.
Charlie Franklin (14:36)
Yeah, well said. So let's get into some specifics. How can total rewards teams, manage pay, and all the programs under the remit optimally, given the market pressures that that most companies are experiencing today? What's a couple examples you can point to?
Tristan Orford (14:53)
Yeah, well, so what are some things that you know, I think we if we put all this together, there's the market pressures. There's also things like regulatory pressure Is which are also relevant at this moment. So we'll kind of mix those two up a little bit as we go through that. So one example would be, so we talked about optimization, I think that's putting everything on the table. That's the sort of thing dealing with market forces, the very default thing that a lot of the consulting firms are all working on right now. And with good reason is total rewards optimization work. You don't need a consultant to do a lot of that for you, if you're in house as an example. So I would think about that put all of your programs on the table and actually understand the cost. A lot of these areas are not ones where historically we've been really oriented towards deeply understanding the cost and how that is that utilization, and how all those things come together. But doing some of that work, you know, these are, these are very doable things for internal teams. And there's probably a lot of opportunities there that you'll uncover. And there, as we mentioned earlier, right, there's probably never been more air cover for making some of these hard choices than there is right now. I mean, it's harder to take away, I mean, it's never easy to take a quote, on quote, take away programs, probably a lot easier to do that now than it was a couple years ago, when there weren't these sort of macro pressures to point to, and especially if you'd have the message around redeploying those funds, or at least some portion of them, you know, people I think people generally get that I think we often get in our heads a little bit, this is part of where we can get creative, as still rewards professionals to we get in our heads a little bit around, you know, creating disengagement or that sort of thing. The reality is anything that you do, or don't do is going to create some amount of that. So do the right thing. And communicate in the right ways, do the change management, but have the faith that doing the right thing is ultimately going to be what's going to set you up for success, both you know, your organization and yourself. So that's one area I think, also, this is a little bit more, it's relevant to a lot of things was probably a little bit more relevant on the things like pay disclosures and pay equity, probably never more air cover for putting more structure and governance in place, with all the things that are going on. And those are the frontline ground game of setting yourself up to do that you have to be successful in the pay redisclosure and pay equity realm as well.
Charlie Franklin (17:18)
So let's dig in each of those a little bit on total rewards, optimization. Curious, put you on the spot, but have you ever done a conjoint analysis before?
Tristan Orford (17:29)
Oh, yeah, actually, a couple places. We did one when I was at Riot Games. And then we also did one when I was at Electronic Arts.
Charlie Franklin (17:37)
For those who aren't familiar, yeah, this comes from the marketing world, helping figure out what kind of TV people want to buy, maybe can you walk through, if you're comfortable, how that works, and how'd you do it?
Tristan Orford (17:49)
Yeah, I think they're, you know, this is, as I mentioned, this is the a product that usually that you'll get through the consulting firms with the the various big shops that are out there, and they're good, they're a good tool to use, what you'll basically do is feed in a combination of what programs you have, and then behind the scenes, what the cost profile is for those. So you might say, Hey, we've got, you know, compensation, and particularly, we might ask you, and we're gonna get what how that will actually show up as people will be asked to make choices. So if you ask me, and the reason for this is that if you ask people, Hey, do you want comp increases? They're gonna say, Yay, if you ask them, Do you want more benefits? They'll say yay. So what you're actually getting them to do is choose between various packages, which kind of reveals their preferences for how much do they prefer, let's say a compensation increase versus more contributions to their retirement account. And so that'll ends up getting fed through an algorithm, people will get asked a series of questions, I think, depending on the way that it's set up a little, there'll be kind of Heads Up choices between individual options are between often times between packages, right. So it'd be like, here's got these three things, or these three other things know, kind of narrowed that down. And there's software tools and stuff that manage all of them. And what you'll get is some version of report that will have an ROI analysis of how much engagement do you generate with your employee population per dollar spent in various different programs. Right, so let's say, I'm totally making these numbers up. But if you spend $1 in salary increases, that gets you one unit of engagement versus if you spend $1 in retirement contributions that gets you 80 cents of engagement on the dollar. The one of the famous manifestations folks may be familiar with this in the industry was, Google did this a number of years ago where they looked at various forms of compensation, and they of course, I think it was for every dollar amendment probably garbled this a little bit, but there's a declining scale between salary short term incentives and long term incentives. Right. So let's say that for every dollar of value for salary people valued bonus 80 cents on the dollar and stock at 70 cents on the dollar or something like that. So not that that means you're going to totally change your pay structure as a result of that. But you can at least understand what credit you're getting with your people based on that. If you have good analytics neutral until you could also potentially understand that by region or by level of, you know, employee level or any of the other demographic data that we're used to slicing and dicing.
Charlie Franklin (20:25)
Yeah, very well described. And, you know, we're not paid to by the consulting firm to say this, but but shout out to the consulting firms who helped put these together they can, they can do this really well for you. What I like about the conjoint analysis for optimizing your TR programs, is you can really make everyone happy, because you can take like perhaps sort of sacred cow elements of your pay philosophy, and actually test against what your current employee population really wants. And by the way, those preferences can change substantially over time, like if you've grown in different countries, or the company's gone through a lot of growth generally, you might be surprised how your compensation philosophy has aged as your workforce turns over with different people. And then, you know, from the financial side, for your CFO and the rest of the leadership team, putting very specific ROI metrics together, really serves again, you have broader air cover now to make changes pointing to a set of data that helps you do that is clarifying, I'll give you a couple examples of things that came up when we were at Juniper Networks and did this one was, so exactly as Tristan describe what we're looking at is what's the perceived value $1 spent. And we learned that for every dollar that we spent on maternity and paternity leave, parental leave programs, we got an enormous perceived value from our employees, I forget what it was it was it was substantially higher than $1. And interestingly, you could break that down by demographic, and it wasn't like the value of those programs was limited to people who might actually personally use them, the whole company wanted better leave benefits as just part of the company's values. And so that gave us sufficient air cover to improve and extend parental leave benefits. Now, in a cost constrained environment, that might not be the number one priority. But another thing that Juniper Networks was working on again, this is all 10 years ago, but it was very important was we were trying to rein in our equity spend. And I bet that sounds familiar to some folks on the call. Shareholders were putting pressure on burn rate, ISS Glass Lewis kind of taking a look at the company, we figured out that we through the conjoint analysis that we could shift spend from the traditional long term incentive RSU program towards an improved espp. And that was partly a function of what was happening to the company's stock price at the time. But people were basically saying, I'd rather have, you know, a bird in the hand versus two in the bush, just given where the market is today. And it's a fundamentally different way to think about how equity is spent. And in that particular case, we get into the nuances, but the market actually sees, share spend on espp substantially differently than they do on on long term incentives. And so it's a powerful approach, I think it takes a lot of effort. One word of warning, by the way, is those trade offs questions can get pretty scary for your employees, when it's like, would you rather have a 5% decrease in base salary or a 10%? Decrease in bonus? They're like, Wait, am I am I losing money here. And so you do have to wrap it with pretty good communication to help folks understand what's happening, what they're participating in.
Tristan Orford (23:45)
On the same on the question of design for folks who are interested in potentially doing this with some of those firms, and then they'll they'll walk you through this as part of those engagements. But I would also recommend doing a assessment of understanding of some of these programs or familiarity with the programs along with the actual perspective on value oftentimes, emanating because a lot of these programs and this will go to some other topics that we may hit on later in our conversation here today. But in a lot of cases, people aren't aware of the programs potentially even exist, or they just don't understand how they work that well. And I think for the latter question, you would need to do a little bit more digging, because there's some you know, face saving stuff that people can sometimes engage in. So you have to probe a little bit for their actual level of understanding. But both of those things are important to know as the folks who sit behind the scenes and are managing some of these different trade offs. And to Charlie's earlier point, it's a place where you can also influence that stuff and evolve some of these over time, right. If you find out that actually people don't really understand this program, but the people that do understand it actually get a lot of value. Well, that's an opportunity to potentially do more education.
Charlie Franklin (24:51)
Yeah, I agree. And and actually on this topic, Jana, how you doing, ask the question, is there best practice for a minimum number of employees, where the analysis makes sense. I'm curious what your answer to this and I'll share when we did it, we did it to the whole company. I don't know if I do that, again, because it does create a lot of noise. In our case, the company has about 10,000 employees. And I don't know, the comp team probably fielded, you know, 100 plus questions over the week that it was open. And, again, some of it was kind of managing reaction to the trade offs being asked in the survey, so you have to be careful about it. The other thing I'll share is you want to get to a certain level of granularity by like country or business unit or function. Because, as we know, like salespeople have a much different perspective on comp, then engineers, folks in APAC, or Europe might think about it a lot differently than us or Latin America. So I'd be looking for global coverage. I think that I don't know, Tristan, did you just do everybody in the past when you've done this before?
Tristan Orford (25:57)
We did. But to your point is, you don't have to do that the companies that you work with can give you a sense of how to get to statistical significance, which you can do without having I mean, you're not going to get responses from every employee anyway. And so, there's probably, depending, again, by how many vectors you want to be able to specify, which usually ends up being a lot and probably more than you might initially think ever, that people might initially ask if, you're asking them before the survey has been administered, rather than afterwards, they're always going to be additional follow ups. But again, it probably doesn't need to be every employee.
Charlie Franklin (26:31)
Yeah, we did. When we did it. We did like some focus groups, in certain you look at the analysis, you can say, that's pretty unexpected. So we put some groups together, there's opportunity for me early in career, do some travel internationally, which I was thrilled about, and to meet other folks in the business. Anyway, this isn't, you know, a webinar about conjoint analysis, but it is a really helpful approach to get clear on what you're spending. And then to your point Tristan, oftentimes reveals, do people even know these programs exist?
Tristan Orford (27:02)
Well, I think the other thing, too, is, you know, putting everything on the table as a total rewards person I've been, I think for for areas like comp, we're used to having the full census information at our fingertips, right for especially if you're on an HRIS system of some stripe, you can pull out, okay, what's our Annualized salary spend, bonus spend? Stock a little bit more complicated, but you're gonna get it that too, but you have to manage all that with the board. So that all that's pretty straightforward. There's a lot of below the line costs that don't tend to get talked about in the same way, right? Benefits programs, other employee engagement programs, workplaces costs, right? I mean if we could do a show of hands, or if we were in a live session, I would say like, how many people here can say, you know, with some level of specificity, what their work places, you know, overhead cost is? I bet it's not very many. But it's that's a huge driver of constitute right? The people constants Charlie was getting at earlier isn't just in salary, there's a bunch of other stuff that happens. So understanding that and understanding where the different levers are, you can you can do a lot of that internally, a lot of the data that ends up being collected as part of these contracts, is actually internal data. And a big part of it is a big part of the prep work is actually setting up those fields to have an understanding of what how much do each of these programs cost? What is the total inventory of all the things that you offer, and all the different locations that you have all that sort of stuff? And internally, you can you can lay a bunch of that out and make some you know, there will be some conclusions you can draw from doing that without having to do the largest statistical exercise as well.
Charlie Franklin (28:44)
Agreed. And you touched on something that I actually I want to come back to which is managing data in this scenario. But before we go there, let me make sure we return to, you brought up some points about pay transparency and pay equity before. Let's dig into that a bit. Because I'm just going to say, because I think a lot of folks are probably feeling it. It's harder to maintain focus on these like values driven pieces of your comp philosophy, when the market is tough, because the language in the room from leadership is like figure out how to cut costs, cut costs, cut costs, how do we do this in a you know, in a smart way. And at the same time, there's this countervailing market pressure of more pay transparency regulations coming online, not just in the US but around the world. And then obviously, the still incredibly important topic of pay transparency, you said something that I think is often should be said more, which is the combined benefit of having a really good career architecture, both to manage costs, and to manage pay equity and transparency. This shouldn't be overlooked, but not to put words in your mouth to talk a bit about how, okay, this is a moment for comp teams to get smarter about pay transparency and pay equity and maybe career architectures, the best place to start.
Tristan Orford (30:04)
Yeah, I want to also go back to your earlier point around the nature of leadership conversations on this topic. I think one of the things in yes, those things can take over go into lots of different directions. And again, it's a moment of pressure on the system, right? So people are going to be trying to figure out, okay, how do we respond, there's a lot of different competing needs that they're trying to balance. So it's totally understandable. In that conversation, this is an opportunity for HR teams and leaders within HR to step up and provide context. In that situation, I would also think about our partners in that which in this particular case, will be our dear friends and legal, as you know, big partners in the actual work and people who are also attuned to the regulatory space more than the average other leader function within the company, and some of the the stewards of risk within the organization, they're going to be a big part of driving that leadership conversation.
Charlie Franklin (30:55)
Actually, before we go on, there's a point I want to reflect on this morning going into this conversation, I don't want to lose this point, because I think there are some non-compensation people on the webinar too. And let me say this, when times get tough, the prominence of the total rewards team elevates, because you have the ear of the CFO of the Comp Committee, there are C suite level decisions getting made based on the words coming out of your mouth, and the numbers on the piece of paper you put in front of people. That does not mean you should abuse that prominence is also an opportunity to maintain being a great partner to have a holistic view of your talent strategy. You know, hand in glove with the talent acquisition team, with your HR business partners, with talent management, so whatever compensation touches, you know, performance management, clamping down on exceptions, with hires, whatever it is, there's a temptation for like creativity to maybe like abuse, taking a more holistic view. Be careful about that play the long game the company needs you to and pay attention, right? Because if the talent strategy is shifting under your feet, it's not just about cost. And it's one thing to save the company money this quarter, it's another altogether to make sure that you can come out of a downturn in a rocket ship.
Tristan Orford (32:27)
I completely agree. I think this is just a broader leadership point, right. I think the leaders, and we want to drill down and say specifically, the HR leaders who I've seen really seen do well at this and I really respected for that. They would, that's exactly how they would engage with their leadership teams, they would solve business problems, but they would also look around the corner and say, Hey, here's the other thing is that we need to be thinking about not right now. But in three months, six months, two years. How can we set up kind of the chess game to be successful along that entire arc? As you know, we come out of whatever moment there now. So again, we don't always we're not always successful in that we don't always get what we want. That's part of life. But that is exactly how you should think about showing up and adding value in those situations.
Charlie Franklin (33:13)
Yeah. But the talk more about how you're thinking about pay equity in a volatile market. Yeah.
Tristan Orford (33:19)
Yeah. And you mentioned the some of the basics, right, this is, you know, I feel like the job architecture gets talked about a lot it I was at a recent comp, sort of conflict, of a bunch of comp leaders. And it was very, very much I feel it's always on the agenda in some form or fashion. But for good reason. This is it is a fundamental piece of how we do our job and in a lot of different ways. And I think the current volatility and dynamics that we're experiencing, are every you know, it's a perfect answer to a lot of those different challenges. Now, I think the pieces that are worth keeping in mind is how do you operate within that structure, right? The structure is not, eventually this is reflecting organizations and functions within organizations and all those other things that's dynamic. That's not a static picture, right? How the different functions that we see in an organization today look different than they did 10 years ago, and that 20 years ago, and so forth, there are plenty of consistency. So it's not that we shouldn't be changing this every three months. But it is there is evolution. And that's part of what we will need to manage, as you know, companies go through and continue to evolve. But having that baseline is critical. When I've done pay equity work at previous organizations. I think a lot of times people think about the pay equity audits or analysis that you do, which is I would think of as sort of these sort of capstone projects, right, where you're looking at the whole system, how well is it working, big believer in doing that work, by the way, and we can talk more about what those analyses look like I can provide recommendations for firms that you could work in that space, but that's not the whole story. In fact, it's it's it there are a lot of pieces that exist down the chain that we would characterize as the first lines, basically of that ground game on operating a effective and equitable organization and job architecture and all the policies and governance that go along with that are absolutely that first line of defense. So if you are, I think if you know, if you're experiencing nervousness around these pay disclosures or the increasing movement around pay equity, that I would, it's very easy to get distracted by a bunch of other things in that space, it's totally understandable, I would go back to the job architecture and make sure that that's very solid, and that the governance and the policies around that investments that you make there are going to set you up for success in being able to do that. I think in a lot of cases, if those have been done, at least, somewhat well, and again, not perfect, but even pretty well. The conversations around what happens when we have to, you know, put a range on a job posting or something like that much less potentially incendiary than they would have been otherwise, I think we probably been in our heads a little bit about how difficult that would be. And I'm sure people have had difficulty with that. So don't want to minimize that. But I think, again, if you've done some, if you've made some investment there, it's it's actually less of a big deal than I think we were worried that it would be.
Charlie Franklin (36:20)
Yeah, I want to underscore something you said a couple times in there, that is really important. Pay Equity, a huge piece of this is communication and building trust, demonstrating fairness across your workforce. And, yes, there's sort of the traditional side of pay equity of ensuring that you don't have like gender pay gaps. But more broadly, in a volatile market, it doesn't feel good when the stock goes way down, or it goes way up, and you miss the timing on whatever side of that you happen to be. And so sometimes the communication is it goes all the way back to first principles and the philosophy of like, yes, stock comp is long term incentives. So first of all, quarter to quarter is maybe not the central focus here. But it's also it's called at risk pay for reason. And you can do your part to influence it. I mean, it's not an easy message to sell sometimes. And that's also not, you know, code for don't make any changes. Sometimes you do need to, but I guess, yeah, just, from my perspective, worth underscoring, especially now, you know, understanding why your compensation programs in place, marketing them to your point. And then through that communication, building better understanding for everybody of why are you paid what you are? Why do we think that's fair? How does that align to our values? And how do you navigate your own personal compensation decisions in a volatile market, big part of that, obviously, on top of the getting the data, right, and so forth.
Tristan Orford (37:54)
And I'll add to that, I think one of the thing that is important here is to not be not let our framing and context dictate how we engage with employees. So in other words, we understand how HR teams work and the work that they do on a, you know, on certain key moments on an ongoing basis to hopefully, you know, groom, you know, kind of garden tend to garden, right, and make sure that things make sense. And that, you know, adjustments get made when they make sense and all that other stuff. People outside of our function have exactly zero visibility into that. And there's a lot of not completely undeserved commentary that exists in the broader space around how does HR act visa vie employees? You know, what does that what does that relationship look like, and the castle is a much more adversarial one than I think it, it is not to say that, again, there isn't any point to some of those points that are out there. But I think it is incumbent on us as people teams to communicate with people about our people who are not in HR and don't sit behind the curtain about what actually happens. That's some level of detail, we're obviously not going to talk about, hey, so and so got X percent adjustment, but the types of things we look at the ways we work with managers, the way that we the ways that we hold with, you know, managers and leaders accountable for doing things that make sense. Those are all things that we should should be talking more about. And I say this from a place I'm by no means perfect on this in terms of you haven't gotten all of that to the place that I would like at my current company. But I think again, investments there, and your pay pay off big time.
Charlie Franklin (39:24)
Yeah. Yeah, I agree. Let's shift gears a bit to data. And by the way, as I do reminder, if you have questions, want to throw them into the chat, or whatever, we'll see those and happy to answer them live for you. And we can also save a little time at the end if there are any specific questions that come up. But I want to get your perspective on data. And I'll share mine briefly. You know, the importance of here's how I describe it. The relative importance of more precise accurate market data is absolutely correlated to market volatility. That is when things go up faster when they go down faster, making sure you've got great market data, not only great market data, actually just a great grasp of your own internal spin is all the more important, because you're in a position where, you know, it's not the art side of your job, it's the science side of your job. And the leaders in your comp committee or otherwise leadership are going to be squinting pretty, pretty closely at whatever you're putting on the screen, and whatever scaling decisions you're making on top of those, but okay, you're you're a comp team in a down market, you need to have great data, what are some things that you can do to make sure that you have credible data to stand your decisions on?
Tristan Orford (40:44)
Yeah, that's a great question. I think in any of these cases, right, you want to be able to triangulate, right, this is this is true that I was actually going back to my early days when we do a evaluation work, right? So it's same concept, right? If you are relying on just a discounted cash flow analysis to value a company, that's not the whole story. Because there could be very different dynamics in the marketplace around what companies of that profile are actually selling for and whether or not you agree with that, you need to understand it. Because if you don't, then you're going to, you know, not, you're not going to be able to be successful in allocating your time and your resources. And I think the same goes for the space that we operate in. Right, you, you it's and it's not about, I think you have to be smart about the way in which you do that. Because I think a lot of times we just say, Okay, let's purchase another survey. Well, let's understand what is actually in that survey, is that giving us better data that actually allows us to triangulate in a more robust way. Maybe, maybe not, I think, not to butter you guys up. You know, actually, the tool that you all have is an interesting different, it's a different vector than a lot of, you know, other folks out there. So I think that's, you know, that's one particular angle that folks can potentially look into, I think the other, there's some other tools that are out there too, even sort of going out and aside from just the comp world. But if we look at things like how do we answer some of these questions around what's going on in the talent marketplace, and with our workforce, there's the one of the data sources I found to be really helpful in past jobs was LinkedIn talent insights. Again, it's not perfect, but there's it for folks who haven't engaged with any of that there's actually some of it that's already integrated now in, in the core LinkedIn product, if you go to the company pages, you can kind of drill into some information about them, which has, you know, things like functional breakdown, like what's the percentage of people in X company that are in engineering? Pretty interesting, right? And it's, it's actually pretty good data, right? If you if you dig into it. So that sort of stuff, I think, can also be a big additional value added. And I think if you have more, you know, the more extent you can have multiple different pieces of corroborating evidence that help you to triangulate on a conclusion that's going to that's going to serve you well. So again, it's not just it's not about the sort of throwing motions or surveys at it, but think about what other ways can we sort of test these hypotheses and see if they're validated?
Charlie Franklin (43:05)
Yeah, I agree with that. And, you know, so briefly for for folks, , Tristan mentioned our product. Yeah, we built this new source of market data based on offers, we think it's this fundamentally different signal than you get with employee base data and serves comp teams well, in volatile markets. I do think that's an interesting one. If you haven't taken a look at it, obviously encourage you to. More broadly, I think of a more modern compensation data stack as relying on not only surveys, perhaps a tool like Compa, but also exactly as you describe Tristan, what are the other sources of data out there where you can glean insights. And we all know that our leadership wants to get as specific as possible, especially when the stakes are high and dollars are tight. I've used LinkedIn talent insights too, shout out to the folks that put that together. In the context that I did. It was when we were doing m&a, we might be like targeting a company. You know, in a market where we didn't have a lot of experience hiring, and we could get a sense of, of what the composition of the talent competitors looked like, and that place and I think there are others too, obviously. There's all the crowdsource things out there that you have the role to play that the public disclosures, understanding exactly what our competitors are putting out there. It's just base salary, but there's other things you can glean. You know, it's like, hey, maybe, you know, whatever I used to live in Seattle. Interesting here in the Puget Sound like is Seattle a tier one or tier two city for you. Maybe you're looking at geo tears and you can go check out sometimes your competitors will disclose how they think about it, you can know whether you'd be an employer of choice. There's all kinds of things put your animals to work, right. You got all these the sharp brains, there's a ton of data sitting there. It's never more important than it is right now. To make sure that your your data is really airtight.
Tristan Orford (44:54)
And I think totally to your point, there's an opportunity here within the data, space, right, like how do we how do we leverage data within the organization? A big part of the analytical framework that we should also be thoughtful about in these moments is, are we answering the right question? Or the only question that's relevant here. So, as an example, to kind of connect the dots between some of the things we've covered, there's the question of how do we pay a person in X role and x and potentially an X location? That's a good question to answer. There's also the related question, how many of those roles should we have in our organization? And most organizations, I've been a part of actually invest much less time and data in answering that question than I would think. And so I think there's an opportunity. It's not a misdirection play, but I think it's just saying, Okay, are we actually really confident in the full set of assumptions that underlie what's gotten us to this place? Yes or No, right. And then that can help to give more certainty to whatever conclusion you're coming to, or cause you to go upstream and make sure that you're actually good with those assumptions.
Charlie Franklin (46:03)
Huge plus one, to that point. And so for those who didn't catch it, I'll share my own experience. I can't tell you the number of times I've been sitting in a leadership meeting where somebody says, we want to attract, you know, more diverse body of talent to the company. And it's like, but you keep only hiring these roles in the Bay Area. Why not, you know, look to Toronto, where you can take advantage of better immigration programs or more other cities in the US like Boston or, or New York or, or Atlanta or whatever. Point to the costs, this is the time to do it. Right? You can attract amazing talent, other places. And by the way, that talent availability is shifting substantially. With so many layoffs, particularly for those in the tech industry. You can pick up talent, amazing talent for great prices, and tackle broader objectives of the company that do not have to be trade offs in a downturn. Yeah. I saw a question here. It's actually a great question from anonymous here. Communication education is not necessarily where somp folks excel. Yeah, that's true. How do we upskill? Or how do we lean on our partners or partners or consultants to help out? So you're telling me that analysts are not always the best communicators? I can't imagine what you're talking about. I have some thoughts on this. Tristan, what about you? Do you like to put your analyst out on the front lines and spend more time with the business? Or how would you tackle that problem?
Tristan Orford (47:30)
Yeah, I think it's a good question. And I think it's a fair point, right, it is less about, I think the point I would maybe push on a little bit is around identity versus what we're habituated to, and how much do we hang on to that identity? I agree that there's reasons why this the stereotype might exist, right? We spend our time, you know, that the stereotype would be we spend our time looking at spreadsheets and dealing with numbers, not people. And, you know, I can relate to a little bit of that, I get it. But I think, you know, at the end of the day, we are here to solve business problems, right? If we're not, if we're not doing that, then we're derivative, especially if we're talking about total rewards, right? We're derivative of a derivative cost center function, right? I mean, we're even in HR, which is a cost center. And we're like a support function within that. So we should have some humility as well, in the sense that if we're, if we're not able to bridge that, and actually connect to people who are doing the things that people pay us money for, eventually, as an organization, we're not doing we're not living our best, you know, and we're not being our best selves. Now, that doesn't mean that everyone here needs to be giving TED Talks. And that's fine. But I think the I would, I guess, I would also say, let's not let the perfect be the enemy of the good. We have a lot of tools at our disposal, honestly, these days, I mean, some of the stuff I've done. And I'm not saying I'm like putting any of this on a pedestal, but it's like, I've recorded a Zoom video with a presentation. And was that perfect? No, was it a lot better than what existed before? Which in many cases was nothing? Heck, yeah, it was right. And, you know, I certainly I'll speak for my team, if, you know, if I see folks on my team getting out there and do stuff like that. It's like, you know, Is that stuff that I look at as career building and career advancing for them? Absolutely. Even if it's again, even if it's not perfect, right. And there's a lot of strategies you can employ. It's, you know, get get some Yes, work in, you know, the, the the question of, you know, should we should we do, do this ourselves or leverage partners? The answer to that is yes, to both of those things, right, of course, build building the partnerships. And you'll often find that there are people who are not just willing to do it, but are actually really excited about it, because they're consumers of the stuff that we put out too. Right. So if you have a learning development team, you know, this is one of the to be one of the most relevant things they could potentially put out, not just for the organization, but for themselves personally. So, you know, that's a good thing, right? Take advantage of the mutual passion that can exist there and do some of the work on your own right and you know, if you need to record that zoom session multiple times, do it. I do. I don't I don't get it right on the first try multiple times, or oftentimes. So that's all good.
Charlie Franklin (50:11)
Yeah, I agree with that and want to share a couple other thoughts on that. But before I do, we're getting to the last ten minutes. So we are shifting gears here to q&a. So feel free to add more questions in the chat as he there are a couple we'll make sure we address those. Also, my team is going to throw up a poll, if you're interested in learning more about real time market data, let us know, we could follow up with you and share more about that. I guess going back to the question on how compensation people communicate those programs, I would say the opportunity if you want to get specific to really motivate an analyst who maybe does prefer to be in front of spreadsheets, instead of talking to people, the anecdotal qualitative information, you get talking with people out in the business to help you understand which programs are most important, and how much money you spend on them, it's essential, it's oftentimes going to tell you a lot more than like you can get from an exercise like a conjoint analysis or, or otherwise very clever statistical work, you need to have those conversations, and then exactly to what you describe Tristan, don't let perfect be the enemy of good. It's very tempting sometimes for comp, because it's such a sensitive topic, you want it to be polished, you want it to be perfect. I imagine many of you, your companies, cultures reward exactly that from the compensation team. And if you're like me, maybe you're born out of the consulting world, where 98% In college might have been an A minus, or an A, but in consulting, it's an AF, it's gotta be crispy, clean, you know, perhaps that's true to some degree. But if you let perfect be the enemy of good, and don't spend enough time keeping an ear to the ground, you're going to miss what's happening. And that's especially true now in a down market, where change is happening very quickly, again, your workforce is turning over your leadership priorities are shifting people's attitudes on how they think about pay is changing, too. When when your stocks down or way up, it's like, well, maybe that's not, you know, how we'll plan to put a down payment on a house, maybe it plays a different role in our personal finances. And those changes should come through to the compensation team, the very teams setting strategy and billions of dollars to spend each year.
Tristan Orford (52:31)
And if you encounter if you spend time out with, you know, you know, people who are not in HR, and sometimes even people in HR, you know, to Charlie's point around what level of they're under their understanding that it's not at 98%, I guarantee you right, on basics, and in some of the stuff is complicated, right, and it touches on taxes and a whole bunch of other things that can be that it's very understandable that most normal people don't spend a lot of time thinking about and don't have a perfect grasp of. But going back to the underlying point is there you know, if you can get them from where they are today to some it is I can basically guarantee for any person on this call, if you went and spent time with people in the business, you would materially improve their understanding of the programs you have. That's right. So that is not an again, it's not an invitation to do shoddy work, think even think about the rollout plan, you can do it with your business, you know, your internal HR teams first and other things like that to polish out any of that stuff. But it's more of a, you know, a exhortation to just get out there. And you know, don't don't get in your head too much about whether you're doing good, you will you will I guarantee you that you will do good by doing those interactions.
Charlie Franklin (53:40)
I'll give one other example of that. And then we'll we'll shift to there's another couple of great questions here. Example going on to the business and having that real conversation, excuse me, and my last company, I forgot which payment was but we targeted 50th percentile the market. And some of the leadership were, what would I say offended by that maybe like, Hey, we're not meeting talent over here. And getting into the room and having that conversation. What I helped them understand is, when we say the 50th percentile of the market, we're actually flattening two concepts, there's a percentile, and then there's how you define the market. And actually, in that case, our company is comparing against a very elite set of other companies. So it's, it's the middle of the best, right? It's not like the middle of everyone, and helping our leaders appreciate that. And then say, when that is the group of companies we're comparing to in a cost constrained environment paying at the 90th percentile, where the exceptions norm maybe doesn't make a ton of sense and is reckless spend the kind of conversation that's really hard to have any other way than live. Let me get to another question here. This person anonymous says Unfortunately, most of comp teams time has gone into cyclical work. What type of team distribution would you recommend to be able to focus on this market pressures? This is a great question. And I think I know you're gonna say but let me turn to you first.
Tristan Orford (55:00)
Well, I mean, this the the initial response, I'm thinking of yours actually goes back to how I've kind of worked model I've put in place for the teams I've managed, which breaks down the type of work that we do into a few different categories. And exactly this person outlined, right, there's a big portion of it is what I would characterize as within the business, there's actually kind of a couple different subcategories that kind of do keep the lights on and then within the business, but if that is kind of the work that we're expected to do, and then there's project or other sort of initiative type work, which sits on top of that, and is almost by definition, going to get de prioritized relative to that rhythm of business work. Now, I think that the other thing that I'll offer within that, because it's been somewhat obvious, I think the thing I'll offer within that is that how you engage in each of those spaces is often different. So and I think this has less to do with who's doing what on the team? I think having, you know, some roles and responsibilities and stuff is important that we can have there's a whole conversation we could have about that. But I don't think this is a I think there are there are ways to address this without saying well, how many people are in calm partner roles versus comp programs, roles. I mean, is there some, in many cases, it may be too small to actually have the full, the full, former formal disaggregation of those things. And even it for larger companies, people in the kind of more business facing roles still do spend a lot of their time on rhythm of business work. And it should be right because they need to understand that stuff and make sure that their their organizations are engaging with those processes effectively. All that being said, I think when it kind of, you know, the other piece I'd offer here is, this is a time to get really crisp around. In those rhythm of business zones. It's about doing that work efficiently, right? Because you kind of know what you need to do in many cases. So it is about getting pretty ruthless about you know, can we do? Can we do this in half the time, there probably are ways, but most companies tend to have this dynamic where you kind of accumulate stuff. And there's probably 10% of things, you know, something that's adding 10% of value, but is taking 50% of your time. So maybe you don't do that anymore, or you figure out ways to do that in a much more efficient way. Guess what, regardless of how your team is distributed, you freed up a bunch of capacity for those people to go work on other stuff. So that would be one answer I would I would give to how to think about that.
Charlie Franklin (57:18)
Yeah. And like, look, you're allowed to stop work, not not everything you do is important. And sometimes just going through the process of really scrutinizing is what we're doing day to day, doesn't really matter. Is is very healthy exercise, like cleaning your room. And so there's nothing more frustrating when like, maybe you're down headcount, because you had to let go so on the comp team, or perhaps that wreck that has been open forever and your promise will get approved is pushback, because the company is in a tough spot. So you have fewer resources. And then there's all these initiatives that are taking more work. It's frustrating, your Northstar should be do what matters in don't assume that your leadership must have the exact year over year, same type of analysis that was done before. Even if that's the Comp Committee, right, like getting real to comp committee on hey, we decided to focus for this one, we really needed to spend more time on this topic and, and we punted on something else that obviously it's not required.
Tristan Orford (58:18)
Yeah, I think for any of the folks on the call, who are I mean, many of us are versions of both of these things. But I think you've come to talking to this from a leadership perspective, if you're on a team, there's a big difference between going to your leader and saying, Hey, I can't do this, versus saying, Hey, here's the thing, I've identified an opportunity for us, we can either do this thing that we've already been doing. Or we could do these three other things that we've kind of all talked about, and there seems to be some energy and some value, we get out of that. I have a proposal where we could spend a lot less time doing things, number one, and we could then do think number of you know, things number 234. Now I can't speak for every manager, but I suspect that most managers are going to be pretty amenable to having that conversation, right? And that's not going to be a career limiting conversation. That's a career growing conversation for you, because you've identified a huge opportunity for your team in the business. So again, you know, this, there's negotiation and all this stuff, but I would just offer that up as a tool.
Charlie Franklin (59:11)
Agree. We have just a one minute left. So I'll just rapid fire. Last question briefly to trust and recruiting teams are still focused on closing candidates first budget and ROI Second. Any advice on to help them understand what's changed in a down market?
Tristan Orford (59:27)
Yeah, well, you know, there's a, we've talked a lot about coalition building and all that stuff in some other contexts. I think the same is true here. So you know, getting with the leaders of those teams to you know, help. Make sure that you all are aligned on the broader context of the environment you're operating in is important. And then getting with the recruiting team to help give them context around that we've actually done done versions of this at a few different companies and found it actually really helpful and really constructive. When you actually get everyone together. You get the total folks on the total rewards team, you get the TA teams. You go through here. Here's, here's what we're up against, what are the implications of doing these things and doing them in different ways, and you kind of open their aperture and they say, oh, like to use this, this example, Hey, if we're, if we close more candidates on target, that actually means more total reps in this in this current environment, they're going to want to make sure that they have more racks, because that's what they get. You know that that's the that's the most direct metric that they get, you know, evaluated on. So there's things like that where you can you can expose that stuff and help them understand how this is a win-win. I mean, none of these people are, I deeply believe that no one out there is a moral monster or wants to do harm, or very few people actually want to do that. They're just trying to do their jobs. So I think it's about exposing how you can create those win wins for both teams.
Charlie Franklin (1:00):44
Agree. All right. Well, we're just about out of time. I'm just to wrap things up with a couple of resources to point folks towards we do maintain a free pay transparency map to keep up with the regulation. It's recruiter focused. Hopefully you find that very valuable. It's on our website. You can also subscribe to our peer group newsletter, where I write about what we're seeing in the market, what we're hearing, conversations about compensation. And then upcoming webinar, I’ll be chatting with Jess Cheng over at Instacart. So with that, thank you so much, Tristan, for joining us today. Really enjoyed the conversation. Hopefully everyone found this valuable. We have a ton of empathy for what teams are going through right now in this market. And thank folks, we'll talk soon.
Tristan Orford (1:01):30
Thanks, everyone. Thanks, Charlie.
