Charlie Franklin
Alright, let's go ahead and get started. Hi, everyone. My name is Charlie Franklin. I'm co-founder and CEO of Compa. I'm joined by my friend Nick Klute, who I'll introduce in just a moment. Compa, for those who don't know, it's an offer management platform for Compensation and Talent Acquisition teams in the era of pay transparency. I founded the company after a decade in HR as a comp leader, built the source for market data that I wish I had. Today, we're going to discuss the fast paced market in tech, and how to build a winning compensation strategy using real time data, including experimenting with new sources of data like offers. This is a hot topic among many of the comp leaders that I'm chatting with, in tech and and other industries as well. So in a moment, we'll get into what all this means for you and your teams, processes, and leadership. But before we jump in, just a few quick notes, we encourage you to submit questions throughout the webinar. So as Nick and I chat, if you pop in a question, we'll take a look and interrupt ourselves to answer it. If we don't get to your question, and we'll reserve some time at the end for Q&A as well. And if we cannot answer all the questions, we'll do our best to follow up with response following the webinar. Finally, these slides and a recording of this webinar will be shared with you within 24 hours. So now I'd like to introduce Nick. Nick Klute is Senior Manager of compensation design and delivery at DoorDash, and Nick has spent his career working across different people functions, leading everything from system implementations, communications, analytics, training and development. He enjoys working on teams, they're always pushing boundaries, and looking for ways to innovate in their space. Nick joined DoorDash two years ago, and has helped grow the team while they continue to reinvent their processes and approach to compensation. So with that, let's go ahead and get started. Nick, welcome. Why don't you start by telling us how the market volatility is impacting folks at DoorDash.
Nick Klute
Thanks Charlie, and Thanks for having me on. You know, I'm sure it's impacted us like everybody else. It's just been a crazy two years, first it's the pandemic, everything going nuts going up and up. And now with things turning around, especially in tech, you know, people just wondering, what is the competitive offer going to look like nowadays? What is it going to look like in six months from now? You know, have we hit the bottom? I don't know. But you know, it's it's definitely been a wild ride and trying to keep pace with the market has been tough for our team, as I'm sure it's been for many teams, right? And that's partly what drew me to competition in the last few years. It's a very exciting area to be in somewhere I think a lot of this is untested waters. It's not kind of the common process that, you know, a lot of people are used to, and it's, you know, another reason why I'm excited about Compa, and just the the program you have all put together. When I came in the default was to use the surveys, the tried and true, like your Radford's your Mercer's, things of that nature, which I still think absolutely play a vital role in the work we do. But I think steady state, you know, used to equal confidence in ranges and I just have not found that in the past few years, right, because things are, so up and down, right. Our leaders are looking to us to make recommendations as to how they can bring in the best talent. And if we're coming in with ranges that are 6- 12 months olds, where they're hearing from their network colleagues or people they're trying to recruit the these just aren't competitive any longer, it kind of erodes the trust and competence that they can have in us, right. And so, trying to get us up to date information as we can helps helps us A, you know, better set our ranges, and B, you know, while we're partnering with the business, doing that in a way that really lends credibility to our function, and has them view us more as a partner, right, versus somebody that could be a blocker to them getting the, the talent that they need.
Charlie Franklin
Yeah, you touched on related concepts of credibility, and stability, you know, a few years ago and comp if your market data was jumping around, that was a sign not to trust the data. And I would be more loathed to put that, in front of a Comp Committee, my CFO, somebody where I'm trying to drive decision about what's happening to market because I'd say I don't know, there's something weird with this data. Now, it feels like the opposite is true. If your data hasn't moved a lot, and it's stable. It's so detached from the lived experiences of everyone from candidates to hiring managers, to executives dealing with, retention, or the opposite, observing that you can lower pay guidelines. So I guess, that's a sea change. What's that, like with your experience at DoorDash? And just generally, I guess, stability and credibility, not the same thing anymore?
Nick Klute
Yeah, I absolutely agree with that. It's, again, you want to have those stable reference points. But you need to be able to when people bring data to the table saying, "hey, I saw this" or "I saw that", they're one data point and granted, you don't want to drive off of that, but you need to have the most up to date and as many data points as you can. While you may not be moving ranges every other day, you need to be able to say that, yeah that is that is a validated point, and we are seeing this. So we are going to make more exceptions in this area, or we're going to look to increase this a little sooner than the rest versus just saying that hey, you know, no, that's just one, one data point, we can take that into account, pushing back hard, you want to be able to say that, hey, yeah, we have seen the spike, we have seen this drop, and we need to respond to that. Again, it's not, you know, I guess similar to the stock market, you know, you're not day trading, you're not going to react to every single thing that comes in. But you want to be able to see the trend that's coming before it hits you in the face and six months a year from now, right? You want to be able to see the hey, this job is going to become a very hot job or it is ticking up and up, or hey, we just saw a drastic drop across the board. Right, as you know, we start to see layoffs across the the tech industry, right and not just be waiting on that next data point to come to you but actually be able to come to the table with that. So you're anything you were surprising them and not the other way around.
Charlie Franklin
Yeah, I feel like the there's some source of credibility for comp in the past of, you know, everything had this lagging perspective. By design, I actually thought it was I think he's useful that you could, like you said, you're not day trading, you can kind of look over the longer time horizon and support, you know, highly leveraged decisions. People are the largest comp largest line item expense for for probably every company with folks on this call. But this shifts now towards okay, if you have the right sources of data, it can play this predictive role. And that's interesting, but then layer on top of that, all the volatility in the market driven by I mean, just over the last two years, the shift to remote work, inflation, great resignation, pay transparency, all these shocks to sort of the status quo. I think it's interesting that you're thinking about comp, your your market data is a leading indicator of what's coming next. So that you can prepare more effectively. Have you put that to work? Like, can you give an example is there like a certain job or geo where you've tried that?
Nick Klute
So it's not anywhere in particular. You know, to be honest, we, I don't know how many companies do this. But we started pulling in a lot of internal metrics a few months back, and we've used them as part of our recent range reviews, and we use them in conversations with our leaders. Now, to your point of stability, we can use our own metrics all we want, but its stability is about the number of data points you have not necessarily how long the time horizon or from when they were pulled. And so it's great to have internal metrics. It's great to track that but we only have so many people hired in so many jobs each year right now you're larger jobs, engineering, support sales, great. You can use internal metrics only. But it's going to be really exciting to be able to access you know, 1000s of offers from however many companies at any point in time and really be able to drive all jobs through those kinds of metrics, with the same confidence that you might have with a survey that, again, has been doing this for a long period of time and with, you know, 1000s and 1000s of data points, not just, let's say a couple of 100 data points that you might collect internally. And so, thus far, we have looked at our internal metrics, and we've used that in our range setting, as well as conversations with leaders and even you know, as we consider where it makes sense that things are not meeting the standard offer guidance. But I think going forward, the ideas is to do that, but with all the companies that participate in the Compa, you know, extended ecosystem. Yeah, it's just very exciting to be able to pull this stuff in and to be able to leverage more than just what we can produce on our own.
Charlie Franklin
Yeah, I have some more questions about your thinking about internal metrics too and kind of dig into those. I see a question here from Marcia, hey, hope you're doing well. How are you addressing or leveraging data that employees reference like Team blind? This is a great question. Because there are, my take is there are data sources that are designed for professionals for comp teams, and then there are data sources that, you know, are designed for, I guess, the public like, you can think of those businesses like more b2c models. Where I mean, where does that data fit into your world? And I have to imagine it goes beyond like the occasional anecdotal, candidate or hiring manager getting crabby when they're like, well, we see this thing online, doesn't this have to be true? Like, does it play a role in your stack? And how does it fit?
Nick Klute
I mean, I think everything, all these extra data points are helpful, you know, they all play a role. It's just what role. Ultimately self reported data, I think, is only as good as you know, the person reporting it their intentions, and also their understanding, I think compensation is not something that everybody understands well. I think I'm sure that's a struggle that a lot of us have in terms of educating our population on how to think about it. And if it's not something you understand your ability to self afford this probably limited. Now, I will say there have been, you know, pretty good averages or estimations that I've seen. And so I think, you know, it's worth looking at, but it's not something I would necessarily drive, you know, building or adapting our ranges on, solely, right. It's the opportunity to use, the actual accepted offer, versus necessarily what people might have, you know, say they're getting offered or what they think they got offered, I think it's just much more powerful in terms of your ability to trust it, and really have a sense of confidence that this is truly reflective of the market.
Charlie Franklin
Yeah, I agree with that. And I, you're mentioning, I love that metaphor. No, we're not day traders. That's what I think of when I think crowdsource data, you just, you know, pick your metaphor, your day trading, you're kind of chasing your tail like whack a mole, it's going to be impossible to keep up with the the anecdotes, and at the end of the day, you need a scalable, reliable process. And again, using that word reliability and thinking about stability, you know, there are different, your team has to play this expert role. Let's keep talking about data sources, though, because so the other thing, going back to what you're mentioning about internal metrics. Well, let me just quickly ask are you are you talking about offers like talent acquisition, specifically? Okay. Yeah. And there is an employees side of a too budgeting is really important. But this is something that I've just been interested in for years it's part of my motivation to found Compa. In comp, we ought to listen to our talent acquisition team, they're the ones actually going out there to the market everyday. So curious how you engage with TA, but then you got to address the elephant in the room, which is a lot of companies aren't hiring as much right now. Is there still something useful? You can glean from TA's interaction with the market when hiring is down?
Nick Klute
Yeah, I mean, I think TA is a great partner, you got to partner with them, in several ways both understanding the market and pushing like, what your value proposition is, and why this may or may not fit with what they've seen. The one thing that I would caveat this with is, you know, TAs are humans, they will be weighted towards, you know, the latest offer and the person they couldn't get or, you know, where they are struggling to close. And so, again, you know, from our standpoint, what we're really pulling is data out of our ATS versus you know, just we do use, you know, feedback in our recruiters track that we're trying to pull the the direct metrics and, you know, to your point with the, with the market decreasing. Again, this is why I'm very excited for a tool like Compa, which will pull for multiple companies because again, you know, we may hire only 10 within a certain role, but if 20 companies are all doing that now you have 200 data points, right. And that can actually be informative to you as to where our market is going. And so it's, again, it's about quantity. Now, it's also qualities, you have to make sure that everything matches, you're hiring for the same roles, right. But you know, that's part of the just natural process, you'd have to go through with every survey and just making sure that your data is locked in and accurate, right. But then the ability to multiply that effect, especially in a slow market is going to be really valuable.
Charlie Franklin
Yeah, I obviously, agree, I think you're bringing in the external perspective on measures that are directly aligned to what you can see internally just creates that apples to apples view and that can overcome volume issues. When I think about, recruitment, so you made this comment earlier, you just have to have multiple sources of data, and I totally agree. So the recruiter as a source of data, there's actually two different pieces to this. And, probably most comp people would say, well, not every recruiter understands comp, and especially gets things like stock, it's getting detailed here, and like how, you know, how can we use this data? Fair enough, right. But there are some things you can do. I think, with effective training, and effective incentive management for recruiters help understand that when you're capturing this data meaningfully, and layering it into your conversations, you create a better candidate experience, you're driving pay transparency, and then ultimately helping win more offers faster. And so you can play into those motivations and maybe some game for you there. But aside from that, too, you know, regardless of sort of recruiter capture, there's also, as you said, just pulling data from the ATS. The applicant tracking system, right? And so this is, you know, how your offers are performing, right, like how much you're spending? And how is that compared to your accept rate? There are other fields that I think are a little more dependent on recruiter engagement, like decline reason, if compensation comes up, I do think I think that one's interesting, but it's not super reliable, depends on recruiter filling it out, and so forth. But yeah, I guess, you know, are those different sources within TA how you're thinking about those metrics?
Nick Klute
Ya, they are. And, you know, we're looking to get more and more advanced and some of that is self reporting. I think one of the things that's going to be really interesting going forward is top of the funnel dropouts, because of, especially with pay transparency, being what it is right, you have to reveal that upfront. And you know, you can have people leaving pretty quickly, especially if they're not seeing that they're getting necessarily paid in the top or their offers, and in the top half of the range, or whatever it is. And so we've been partnering with our team, and you know, just generally think the recruiting team can play more and more of an advantage to the comp team and helping us collect working with us to see like, what data do we want to collect? What's going to be the most helpful? And then how do we maybe start with things that need to be kind of entered into the free text field? How can we move to drop downs? Have we moved to more and more and more accurate processes? So it's less requirements on a human recording it and more kind of input into a system pulled through a system tracked that way.
Charlie Franklin
Yeah. So we talked about, capturing data from recruiters, we talked about, crowdsource data, you just touched on pay transparency and disclosures. And so I think that's a really interesting observation that there must be some way to measure top of funnel drop out based on published ranges, on your salary posts, or your job postings, right. Is there like a simple way to do that? Have you cracked that yet? Or is it still kind of experimental?
Nick Klute
We haven't we have different teams trying different things. And it's, you know, like everybody else, we're learning. We're testing out, we're seeing what's kind of working, and if it's not working, and we're going from there, but unfortunately, that is not one. Not one that that we've been able to crack just just yet. Still very new.
Charlie Franklin
Okay. Yeah. Curious if anyone out there has experimented with it, feel free to drop in the chat. So a lot of my time when I was in comp, was focused on the world of exec comp, you know, public companies. So dealing with the proxy statement, and for those familiar with that there's a huge amount of legislation that drives disclosure on pay for officers. And you can use that data really meaningfully, actually because there's so much standardization on how all the different payments are reported everything from like very precise, you know, realizable value, when grants are made and so forth. Not really true, at least not for now with salary ranges on job postings. Everyone's seen the articles about the super wide spreads. It's sort of difficult to find a consistent disclosure approach across companies. So I'm not sure yet like how salary range disclosure is going to compare to exec comp disclosure if it can get to that level. But are you using pay ranges on job postings today to inform any comp strategy?
Nick Klute
You're not to the extent that we'd like I think that's again, a next evolution. I think right now, like a lot of people, we're just figuring out what is our approach to pay transparency? How are we handling that? I think the next will be as more and more companies start to adhere to this, and we see this, you know, in more and more of our big markets like California, it will be how do we start pulling in that data to, to this conversation we had earlier, it is just yet another data point that can help you understand like, how do you really compare to some of your direct competitors, and maybe some of those that you are, you know, particularly focused on for this specific skill set versus, you know, I know, we set our we set our peer groups holistically, right. But that's not to mean that every single peer is as applicable to every single job you have. And so this will be kind of that next evolution where we can start saying, hey, you know, I'm really interested for autonomy engineers from this company or that company. And just curious, are we even in the ballpark? Hopefully, as legislation does change over time, that will become more and more accurate, and we won't see these, I think I saw a posting that they paid anywhere from zero to $300,000 for a job, which, you know, not super helpful, right. But I think that's, that's going to change, it's going to evolve, just like everything else we see.
Charlie Franklin
I agree, it's early days, and it's probably going to get better. And if not driven by regulatory or legal action, I think just economically, companies are looking at each other's pay range disclosures, they know, it's just like, if you build a website for a company, and you put a pricing page up, that's one everyone's gonna click on. So people are scrolling down and looking at the pay ranges. So some real estate there, that's getting attention. So I do believe it's going to become sort of this competitive real estate, not only to pitch your company and your value proposition, but I think also an understanding competitors, what you described, that's what I consistently hear with respect to pay ranges on job postings using them for exploring scraping individual competitor intelligence. So instead of, more of a research project of like, have the 1000 job postings up this month, what's the average or something like that? More like, Hey, these are for companies I really care about? What are they doing? Can I learn something about their geo tears, the spread that they're communicating? Even just inferring the midpoint. And can that somehow, you know, help me serve what I'm seeing? I see a question. Here are some interesting comment from Kevin, thanks for sharing this. Said on the posted range discussion, find the candidates state, the towards the top of the range or above it, but they're not dropping out. You're smiling about that, Nick, what does that mean for you?
Nick Klute
I mean, I think you and I had a discussion about this as well. But ultimately, it's always in the candidates best interest to say they're getting paid at the top of the range. I don't know many people that, you know, would say, oh, yeah, I'm getting paid low on the range right now. As long as they're somewhere that makes reasonable sense and doesn't seem just out of left field, it's, it's a bargaining tool, right? This is a negotiation between our company and them, and they're going to put their best foot forward, just like we should be able to put our best foot forward. And to Kevin's point, you know, people are accepting lower and lower in the range, right, we're starting to see the market shift. And the more that we can put this data in front of, kind of like not just ourselves or recruiting team that are our leaders or other partners, we can build that again, just that credibility in terms of like, why we are recommending this is where we target versus, you know, what they may have seen as recently as a few months ago.
Charlie Franklin
Yeah, that makes total sense to me. And, you know, Kevin, for what it's worth, I have an econ background. I love the freshwater economics view of things, which is basically all macro econ is micro econ. Meaning in this case, like what you can expect to happen is the incentive individuals have on the margin. And yeah, if I were a candidate, absolutely be leveraging the company throwing out the first number to drive my price up as high as possible. I do think, though, worth noting, you know, if that's true, should we just throw out this data to tell us nothing? Absolutely not. It is valuable from my perspective, what what we're observing, if we do this well, is the bid ask spread, like on a stock price. And then what you want to understand you know, like company puts out the bit of like, hey, we'll pay 100 grand, the candidate comes back and they ask for 150. The question is, where's the close? If it does, right, and then you can start to learn, you know, should we expect a certain premium on the candidate asks against our bids? And can that inform where the markets going? Nick, you mentioned that you're seeing those come down in the range. unsurprising, right? Like we've all seen, whatever it is now 200,000 people laid off in tech, there's a supply shock in the market, prices are coming down they already have. But that's how I think about like setting that data into context. I still, I feel like for the average comp team, super hard to execute on learning something at scale with that. So I go to like, if you're curious about playing with this data, pick a really meaningful targeted project and see if you can get some value out of it. As a first step, that's how I think about kind of deploying those data sources.
Nick Klute
Yeah, I actually really like that. I hadn't thought of that before this call, but it's now something that we'll probably look into, I think it's a great, again, just a great data point to better train recruiters that, hey, when somebody says this right, realistically, what we've seen in the past is, this is where they're really aiming for. And so this is what we feel would be an appropriate place to try and close them. I think, to your point earlier to how do you partner with recruiting, but this is just another data area that we can capture, you know, it's people falling on top of the funnel, it's what was their first ask us compared to our first bid? And then, you know, we can collect the data on the back end to see where are these people actually finalizing? Right? And, you know, ideally, if we're able to do that enough, I liked the idea was starting with the pilot, and then just expanding there from from there, you know, you can do that on mass, super powerful data point to arm your teams with.
Charlie Franklin
Yeah. So I want to shift gears a little bit, because we're talking about all these new sources of data. And the reason that these are becoming of interest of so many comp leaders is because the market has been shifting so fast. And I think most people are observing, we're in some kind of a cooling period right now, with exceptions, or I need to know where those are. But with all that being said, Okay, thinking about our sources of data differently, and building the stack with these varied sources that are designed to tell us different things. What about process? And I go to this, because, just trying to put my old comp hat on, we updated guidelines once a year. Where does that stand? Should we still just be updating guidelines once a year? Or is there like a process change that you're thinking about that goes alongside the greater volatility and use of data?
Nick Klute
Yeah, I mean, I think once a year is definitely way too little, it will not allow you to keep up with market, what you're just going to end up seeing as your exceptions arise towards the end of the year, people will start to lose faith in your ranges, and any kind of guidance that you try to use in terms of trying to like capture things that are not at the top of the range or to wreck to a certain point in the range for new hires. You know, we're looking at doing twice a year, but ideally, you're moving to is, let's say twice a year, but with some kind of like, always on cadence in terms of like ability to really respond if something just shoots up. And you know, you are and you get enough data points to say, Hey, this is something where we may need to adjust, even in between our cycles, or we need to adjust guidance, or we need to make kind of like a caveat for this for the team. But it's, again, it's balancing the credibility and sustainability portion of it with the ability to just really respond to what's happening now. And so you need to have definitely more frequent than once a year. And ideally, for any, let's just say one job, in particular, the ability to respond like right now, if you really need it, right. And if that's the core job that's going to drive your business forward.
Charlie Franklin
Yeah, I think that's a big shift. And I, I see another question. I want to get to that. But just to share a personal experience from from my world in comp when I was at Juniper Networks and shout out if anyone here is calling from Juniper. This is a number of years ago, there was an issue, there's a retention issue with ASIC engineers, which are like highly specialized and stuff with silicon. And the the leadership for that team at the time was like, hey, we need to make sure our market guidelines are competitive for this role. We looked at it. We did a study we said, you know what, like, our surveys are telling us like, yeah, everything's spot on. You know, basically, it's not us. It's you. And in retrospect, that was the wrong move, because what we eventually learned much later on, is the market had changed. overnight. And instead of traditional networking competitors, who might have been recruiting away ASIC engineers, it was actually our own customers. And this was, again, this is you seven or eight years ago and hyperscalers, like, you know, Apple and so forth, started to build their own ships. And so had we had not only a source of data, but I think, a process on handling fast market changes, we could have seen that and responded more effectively, to not only compete for new ASIC talent, but in that case to retain. And so it is data and process, right? Like, if you're only updating guidelines once a year, and things like that happen, you're going to undermine your talent strategy when the market shifts faster than an annual cycle. Yeah, Chad, hey, thanks for the question. So how is offer data reconciled for the very typically messy job architectures and titles out there? You have varying qualifications, I guess what can you do to kind of get an apples to apples view? It's kind of unwritten this question of like, principal versus staff engineer. How are you thinking about that Nick?
Nick Klute
Yeah, I mean, so for me, the way I think about it is the whole idea of, getting offered data at the moment it comes in is kind of like the sexy side of compensation. This would be the very unsexy side, but the side that you need to get right in order for everything else to work, right. So this is your base your infrastructure, I would not say we have gotten this right. But I think this is where again, you know, if you think about how we're comp teams used to focus, this is where the rubber really hits the road. And we need to kind of keep that strength building there, right, you need to have people that are looking through all the different jobs, working with your leaders working with your partner teams to really understand what is it that our jobs do? What is it that these other jobs are doing out there? What are the definitions? And how will we really clarify the distinction for this versus you know, any others and, you know, hopefully, as we get platforms, surveys, things like that, that can go into more detail, because we are pulling data more frequently, we can get more exact on it, right? We're not just beholden to, let's just say 50 different or you know, 100 different or 200, different job profiles, we can really get more and more exact, because we're collecting more and more specific data, we can actually get into and pull apart some of that mess and create a little bit more clarity and alignment across not just again, you know, internal companies, which is hard enough, but across multiple companies throughout an industry, right. I think so far, we've all been holding onto whatever survey companies have described a role as being but I'm sure there's a future where again, it's multiple different companies all kind of kind of getting very, very exact on what these highly technical roles are, putting that out there and kind of just, you know, working together to really define what makes x versus y.
Charlie Franklin
Yeah, I agree with that. This is something that I spend a lot of time thinking about Chad, you know, with what we're building a Compa, which is structure, its match data, but it's offers based market data in real time. And I talked about this frequently with my team, they, we're always interested in like building sort of another feature another way to visualize the data. But like, when it comes down to it, like the most important thing to get right is matching, and making sure the data is apples to apples, like that's what unlocks the value. That's what differentiates it from sort of a curiosity, you know, crowdsource curiosity to do something that is really usable in a expensive decision for the company. I think, you know, the sort of Rosetta Stone approach that we've all had for years, which is let's find a common language. That is a good foundation. I believe there are investments in technology that we can make to get sharper on, on understanding differences between companies, for example, just understanding the social graph of like, where's talent moving from Company A to Company B. And if you see certain patterns like that, you don't need to rely on a kind of a castle that you've built to say, this is what I think the world looks like. You can just see the organic sort of social graph. But with all that being said, I guess a very reasonable proxy for apples to apples across the market is some kind of a Rosetta Stone. By that I mean, like a canonical job structure where folks are basically opting in and agreeing across companies on this is an apple. Thanks for the question, Chad. Nick, anything else you're thinking about process wise to change given how fast the markets moving? You mentioned moving from once to twice a year on, market reviews, and then sort of ad hoc analyses when they come up. Is there anything else? If you're just like a comp team listening in, it's like, yeah, we know that markets moving faster. What exactly should we do about it? What would you suggest?
Nick Klute
I think it's making sure that you have, frequent and really detailed reviews on your key metrics. So things like, offer acceptance rates, things like, again, top of the funnel, people leaving things like attrition rate. So all of these things are the leading or lagging indicators that something is is going on. And, having this be part of your week, to week or day to day for your comp team members, your comp team leaders, and even reporting to your business that can really help you see that, hey, or look around the corner that, hey, something may be coming, I probably need to dig into this job or that job a little more, we need to be prepared for something to have to shift pretty quickly.
Charlie Franklin
That's smart. Yeah, pick your metrics, right? Like what can you reliably measure that has these predictive characteristics that help you know where to shine a light. And so instead of just reacting to an executive or a leader, waving their hands in the air that something's broken? If you can get in front of that. I see a question, thanks Paul. When looking at equity comp, given all the market volatility is considering dilution constraints playing greater factor in addition to market value data, I'll just say and I want to hear Nick your perspective, but I've just heard over and over again, and he can prove this with simple math. If you're a public company that does not have a dual class, stock structure, ie you're held accountable to Wall Street. Those folks are not letting you double share burn overnight, like it's just not happening. And if your stock price is cut in half, and you want to keep your guidelines where you are, that means doubling your share burn overnight. And so we're seeing alignment, basically, between pressure from shareholders to rein in equity spins, which is, it's almost circular logic, right, like the vicious circle, you have to do it because your share price is lower. But then, because your share price is lower, there's less tolerance for higher burn. That getting aligned with the actual market is cooling off. And so I think the right way to look at this is actually as Nick, you said, look at your win rates, like if you can prove that you can spend less and, and achieve the same number of offers, which you can think of as a proxy for retention for current talent. And that's a nice leading indicator that, you know, that you basically it's the right decision, it's the prudent decision for your shareholders. Nick, what's your take?
Nick Klute
Yeah, I mean, ultimately, to your point, Charlie, you can't just double it overnight. It's not gonna fly, but it is finding the right balance. And again, it's all about testing the waters, how can you test the waters effectively, again, you get in more and more data quicker and quicker to say, hey, where do we really need to sit, because, you know, well, you can't just double your shareburn, you also have to still be competitive, right. And ultimately, it is a market. And, you know, you may not like what the market is telling you. But if you need a certain role, and that's, that's what you need to bring in. And this is the cost of it, you got to figure out how to pay for it. I know, some of the companies have switched more to cash less to equity. And that's how they're balancing that out. There's a number of ways to get around it. But, you know, again, I think the best way in the way that you know, is most effective for the company is really understanding what is limited to the market now versus what were the limits of the market three months ago, because everybody is in the same spot. And to your point. I'm sure a lot of people are not just saying, hey, we'll just hand out twice as twice the number of shares. That's totally fine for us.
Charlie Franklin
Yeah, I've heard that from other folks to some shifts to cash. I've heard that driven by shareholder constraints. I've also heard it because some tech talent, especially kind of earlier career tech talent is just not as not as bought in on the value of stock given what they've observed in the market over the past 18 months. But the other thing I'll add to is when we talk about the market, I think there's a tendency for comp people to sort of talk about the market and air quotes. As this big, abstract thing. Don't be afraid to play small have a ground game, who are your top two or three competitors? What are you hearing that they're doing from candidates? And can you respond on your most important jobs? So and that's a way to win, right? Like you don't have to have like sweeping scalable strategies for everything. I think especially during these trickier times where you're being asked to rein in spend. It's like, now I'm making this up, but if top competitor is Disney and I can see this on their job postings, the salary ranges on the job postings, I'm hearing this from candidates we're sourcing from them or have competing offers. I'm looking at any other publicly disclosed data. Can I make a decision that's going to help me on the margin win that many more offers for a business initiative that matters. And so again, that's just a hypothetical example. But that's my guidance is don't let the weight of market volatility undermine your team's ability to play small. We're at about 40 minutes. Why don't I go and pull up there and just ask any other questions in? I think we've answered most of that come through. But anything else that folks like us to touch on kind of shift gears into addressing any lingering questions? Before we wrap up?
Nick Klute
I will say one of the things that I think came up earlier, but I didn't addresses one of the things that I'm very excited about to use real time offer data is, and I'm sure a lot of people get this, with inflation being the way it is, you know, why is my increase not matching my inflation or my cost of living has skyrocketed, you know, X, you know, 10% 15%, right, why am I not, you know, tier one or tier two cities, right? Or why do we have tiers in general. I think, again, you know, being able to have in the moment data will help us respond, especially, you know, the move to a hybrid workforce, maybe there won't be tiers anymore, I don't, I don't know what the future will look like. But we'll get a much quicker view of where that's going to be, as we have up to the moment offers, and we can compare kind of one to one across those different geos. So that was just one area that's been kind of in the back of my mind that I think is just really going to be a lot more exciting and you know, it's easy to address now that we have kind of real time offers.
Charlie Franklin
I, plus one to everything you said. And I'll just add, I think the other big piece of this is moving into this era of pay transparency. Yes, there's the legislation, but more important than that. It's the accountability, the focus of employees and candidates on expecting more detail, more like objective rationale, instead of a black box and how comp decisions are getting made. And of course, the pay equity side of this as well and trusting knowing with data, that their pay decisions are fair. And so I just I think there's this it's a change, even if the market volatility, the absolute volatility up or down, cools off in the next couple of years. Hopefully, it does knock on wood. I do think we'll we'll be left with a different world. We're not going back in terms of of how we measure the market. Kevin, I see you got another question here. How have you seen companies handling the backing off of equity guidelines spend with maintaining internal comp equity? Anything outside of leaning on cash?That's interesting. Nick, have you dealt with this, this issue of people paying people accepted offers in 2021 and 2022 versus people in 2023.
Nick Klute
Yeah, I mean, that's the situation that we're in. And I think there's, there's a lot of different dynamics that are happening here. One: I'm no longer making what my offer is. Two: We're bringing people in for a lot less than what we are paying incumbents until maybe our range isn't too high. You know, regardless of what the issue is, part of it is education. So nobody took your your base down your base is what it is it goes up, but, you know, inherent with stock ownership is volatility. And that's part of the reason it is what it is, right? The the driving factor. And the reason people want stock, or want to give stock in the first place is it gives you a vested interest in how the company does now, unfortunately, we're at a period where, you know, most people can't actually impact it, because it's a macro economic issue. But you know, the fundamental part of that is, you know, it is a bit of a risk. And, you know, ideally we're keeping people as as whole to what they expect, but also to what the market demands for role is possible. But it is just, you know, it will be kind of a tough time for some people. And additionally, right, it helps to ground us in that like, these people are not alone. You know, I think the worst thing that can happen is you see people that have been with your company for years and helped make your company who it is, and they are earning net less than a new hire walking in the door because they have not impacted been impacted by this. But I think again, that will start to shift as we start to see that the more we test the market, the more we can see we are we are necessarily too high in the market for where we are now into those ranges start to come down over time and so you see less of that discrepancy.
Charlie Franklin
Yeah, and I'll add to that to just the education piece that you mentioned, it's a bit of a tough lesson. But I think serves all of us. You know, stock is an at risk pay element, it's not guaranteed. And many folks have just seen it go up into the right for the past few years. And so that's, that's a challenge. But also, you know, to the degree that you do decide intervention is worth it. Look at your population and cohorts in time cohorts who joined the company when, and that's going to be a really instructive way to understand not only from a comp perspective, right, but if your people analytics team is looking at like, hey, we tend to have, you know, the most attrition after a year when the honeymoon period ends. Like if there are people who joined a year ago who not only their honeymoon period is ending with their new role, but their comp down 70%. And they're really they're a part of a team executing on really important initiative. That's how I'd be thinking about designing interventions to the degree decided prioritizing.
Nick Klute
Okay, I like that. I also liked it that, you know, just setting things up like that, and doing that analysis can help you even if it's not a across the board intervention, its guidance to leaders on how to best utilize, you know, the budget that they do have, right, I think part of what we can do better as a comp team is just always putting this information and the way to think about compensation in our leaders hands so that they can make the best decisions for their business. Right. And that's, that's our goal, and most of the time that's wide reaching kind of initiatives and wide reaching guidelines, but it doesn't always have to be right. It can be much more targeted.
Charlie Franklin
I agree. Dan, I see your question. Thanks. Have we seen many tech companies reducing their equity guidelines for both new hire grant and ongoing grant given the tech sector headwinds? I'll tell you what we see in the data and Compa and then, Nick, I'm curious your perspective to. The answer is yes, absolutely. Companies are reducing guidelines. And, you know, some of us maybe thought this was impossible. But it is happening. Having good data, to educate your leadership team on that is really important, because you're thinking about your comp committee, they've never seen it before either. And so there's going to be some skepticism and concern, especially if you have really key roles where you need to continue to grow and stay competitive, like your comp philosophy is to pay at the top and in the market for certain GEOS or functions or whatever, you need really strong data to prove it to lower it is it's kind of a funny sounding thing to do. But I think it's really important to get tight on that. The other thing I just want to call I've seen it, but I don't know it's that common, I have seen a few companies do it. Instead of lowering your equity guidelines, you can reduce your vesting schedule. So if you and the concern here you're solving for is overhang. So if you have a four year vest, but you're delivering, you know, 25k a year against 100k target for your grant. At its extreme, you could do a one year grant, and you've just reduced your overhang by 75%. Now, we all know that the gap non gap shenanigans that's playing into and I will use that word shenanigans. On the other hand, right, like everyone's trying to figure out what to do and and who knows that experiment could could pay off sort of treating LTI as STI and other vehicles stock, despite the risks. So I wouldn't call that a trend. But I've seen a few companies do it. Nick, what are you seeing?
Nick Klute
Yeah, I mean, we're still just getting into kind of being able to monitor up to the date market data. But I would say all of our leading indicators, in terms of things like attrition where we can bring people in it seems to be yeah, at least it's not up into the right like it always has been right. We're not, we're no longer chasing to keep up with, you know, ranges increasing. It's at best steady state. And we're probably going to see, you know, especially as we dig in more and more, we're going to see that start to get reduced over time.
Charlie Franklin
Yeah, Okay. Yeah. Thanks for the question, Diana. If there any other questions, drop them into the chat. But while you do that, let me go ahead and pull up and share with you some resources and actually compa team, if you can send out a quick poll to just curious what we'll share this out with the audience, how you're looking at real time data out and you want to shoot that out? There you go. Yeah, and this is something that Nick has been talking about. Through our conversation is using Compa. We do have a product that's real time market data based on offers. We haven't publicly launched yet, but we are adding the companies in private launch. So shoot us a note, if interested. It could be a helpful solution to add to your stack. And then let me go and share my screen. So a couple things just to call your attention to. We track pay transparency, it's a free resource, you can check it on your website. It is actually recruiting centric, because we found that recruiters are kind of in this position where now they're on the front lines of pay transparency and need to make sure they're asking the right questions about salary history bans, and knowing whether pay ranges should be disclosed as they recruit more nationally, as everyone's shifted to hybrid and remote. Additionally, for comp folks, I write a newsletter each week on comp and pay transparency. It's free recommend you check it out. This week, I was a little self indulgent and went into a metaphor about how I think market data sources or like the energy stack with solar and nuclear and all that stuff. And then yeah, we have some upcoming webinars to next month talking with Sarah Tilly over at ServiceNow about alternatives to layoffs. And then Cassandra at the New York Times about pay transparency 2.0. So some upcoming events there for you. Thanks, everyone for joining. If there are other questions, Nick, really appreciate the conversation. And thanks. I'll catch you soon.
