The "Secret" to Improving Talent Acquisition with Pay Transparency

For those who couldn’t attend Compa’s recent webinar with Jonathan Lydon, Head of Recruiting for Nuro, here are some highlights and a link to the full recording

Overview

The discussion focused on ways to improve talent acquisition with pay transparency, especially in view of the labyrinth of state laws which recently went into effect. Joining Jonathan was Charlie Franklin, Compa’s CEO, who discussed ways for recruiters to make pay fair and competitive in this era of pay transparency, but also how they can leverage transparency to recruit more effectively and create better candidate experiences.

The current view on pay transparency

According to Jonathan, about 75% of companies are participating in pay transparency, which will likely increase as new laws go into effect. He also has not seen as yet a standard emerge in terms of how to implement transparency. In his view, it’s a mixed bag that will take some time to sort out. 

Compa’s pay transparency map

To help companies navigate state pay transparency laws, Charlie unveiled an interactive pay transparency map for recruiters, compensation professionals, and job seekers to understand what companies must do, can do, and cannot do in different states with respect to disclosing salary data. In addition to current state and local laws, the map also includes information on pending state legislation and identifies states without pay transparency laws. To view the pay transparency map, visit https://www.trycompa.com/pay-transparency-map.

Compliance first; Enhancing conversations second

The speakers addressed the two sides to pay transparency: compliance with state laws and enhancing candidate conversations. 

  • Compliance - there’s no magic bullet for how to comply with laws, and different companies are taking different approaches to compliance. There’s a wide spectrum of implementations, all of which reflect a particular company’s compensation philosophy.
  • Conversations - Recruiters are now becoming brand ambassadors for their company’s compensation philosophy and elevating the bar with more robust, open conversations with candidates earlier in the recruiting process than before. Today’s recruiters are less about the old cat and mouse game of figuring out expectations than it is about laying out honestly how a company determines pay bands and how that fits in context with other benefits. 

Thinking about and talking about levels with candidates

Candidates want to hear how a company defines different levels within particular job categories so they can understand how they can move up over time. Recruiters need to take an active role in explaining the philosophy and the key factors that buttress that philosophy. 

Dealing with dynamic compensation data

Companies are just learning how to get comfortable with new, dynamic compensation data as opposed to lagging salary surveys. There’s a lot of benchmarking going on right now between and among companies, so there’s a lot still to be learned in terms of tracking candidate interest, competitive offers, and close rates. 

Building trust through transparency inside and outside

Pay transparency is an inside-out game, meaning there’s risk if a company is more transparent with candidates than it is with internal employees. If a company isn’t transparent with all, there’s a real risk that trust will be lost. 

Compensation challenges for start-ups in particular

Most candidates who apply to start-ups do so with the understanding that they will likely not be paid as highly as a peer at a larger company because they’re in it for the upside. In start-ups, equity is the name of the game. And different start-ups will have different pay bands based on what type of talent they need immediately. In short, recruiters in start-ups will no doubt face and have to deal with a number of nuances to get their jobs done effectively.  

How recruiters can be more effective and engender trust

Pay transparency will enable recruiters to qualify or disqualify candidates faster and be more effective at their jobs. Likewise, transparency will also play a key role in establishing and engendering trust with candidates by virtue of their conversations and candor. 

How geography impacts compensation post Covid

In the post-Covid era, companies will have to standardize on how they deal with geo-based compensation conversations, especially as the return to office trend picks up steam in the coming months. 

How transparency will be perceived over time

Companies are likely to err on the side of more transparency once they work through the internal challenges for simplicity sake. 

On training recruiters

Companies need to change their expectations for recruiters, especially with respect to communication and negotiation skills. Training them to handle transparent conversations is a must. 

Click here to listen to the full webinar.

Transcript:

Charlie Franklin

Hey, welcome. If you just hopped on we'll get started in one minute. Thank you for joining.

Jonathan Lydon

All right, let's go ahead and get started. Hey, everyone, thank you for joining. My name is Charlie Franklin. I am co-founder and CEO at Compa. Compa, if you don't know is an offer management solution for talent acquisition teams in the era of pay transparency. And I founded the company after a decade in HR as a compensation leader. And we built the tool that I wish my recruiters had. I am joined today by my friend Jonathan Lydon, who I'll introduce in just a moment. Today, you're going to hear about ways to improve talent acquisition with pay transparency. And with new laws in California and Washington having just gone in effect 12 days ago, every recruiter in these states and more are facing new data, new workflows, new communication with candidates. And obviously combined with the broader market uncertainty that everyone's experiencing, it's just a lot to process. So we're going to discuss ways for recruiters to not only make pay fair and competitive in this new era of pay transparency, but also how you can leverage it to recruit more effectively and create better candidate experiences. So before we begin, just a couple notes, we encourage you to submit questions throughout the webinar. And feel free to share your thoughts and insights directly in the chat. And if we cannot answer all your questions within our 45 minute timeframe, we'll do our best to follow up with response after the webinar. And finally, these slides and a recording of this webinar will be shared with you in the next couple days. So now I'd like to introduce Jonathan. Jonathan Lydon is the head of recruiting at neuro one of the leading companies in the market for autonomous vehicles in the world. He has over 15 years of experience in recruiting across Silicon Valley venture, backed startups, and has designed hiring playbooks and best practices for early stage seed and series A startups like figma, Discord, and rubric, and has scaled two startups from less than 100 employees to over 1500. So with all that, Jonathan, welcome. Let me take my screen off here. Thank you for joining me. And there's a lot going on in the world of talent acquisition, why don't you, tell us what's top of mind for you. Yeah, how pay transparency fits in.

Jonathan Lydon

Hi, well, thanks for having me, Charlie. This is an interesting topic, because it's something that's pretty live in action. And it's changed quite a bit very, very quickly. So yeah, I think that the summary for where we are in terms of pay transparency is companies are currently trying to figure out and set best practices around how compliant and how aggressive they're going to be in showcasing pay transparency to comply with the laws, especially the laws that have gone into effect in New York and California. Where we are today is, from what we've seen, and most of the research that we've done internally is that about 75% of companies are participating. I'm sure that will increase as legal compliance comes in. But for the most part, it's like 75% compliant, and there's a really mixed bag and kind of how they're complying across it and looking forward to kind of chatting about both the compliance side as well as like what that means in terms of expectations for recruiters.

Charlie Franklin

Yeah, I couldn't agree more. There's, kind of some thrash going on, as everyone figures out exactly what these laws mean for them. Actually in order to level set, I thought it'd be helpful to share, I've just kind of set the ground for what these new laws are very briefly. Completers are following pay transparency laws really closely. If you're in talent acquisition, it may seem like a bunch of legalese. So I'm actually just going to briefly share my screen again, and show you a resource that is actually available on our website, I'll have my team dropped the link in here. This is all about pay transparency for recruiters. And what you can see here is a map of the United States with what states have different laws in effect. And the right way to read this, I'll take California as an example, because this is one that just went into effect on January 1. From a recruiter perspective, what we're tracking here is what recruiters must do, can do and cannot do. And so in California, for example, you have to provide salary ranges, upon request to employees, those have to get included on your job postings. You can ask about salary expectations and consider voluntarily disclose information. What you can't do is ask about salary history, that's the salary history ban, or rely on history to determine employment. So all kinds of resources on here, like I said, this is available for free on our website, it's geared towards the recruiters, there's a lot of change. I'll just quickly highlight I think what's affecting everybody the most right now is California, Washington, Colorado, and then New York, you may know that New York City just went into effect in November, but the law will apply across entire state later this year. So I guess, you know, with that groundwork in mind, Jonathan, for you and your team, what is the most challenging impacts of this law and recruiters so far?

Jonathan Lydon

So there's two ways to kind of have this discussion, there's, there's the compliance side. And then there's the actual discussion around how you can actually leverage it and take advantage of it, the compliance side is relatively easy, right? So it's posting live, right? It's making sure that you're complying. However, your comp team and legal team approaches the pay transparency law, there's quite a bit of subjectivity in interpretation of the law, they use very generic language, like pay scale instead of bands. So what that's led to, is, I would say, a mixed bag of how people are interpreting it. I know, we all saw the the memes of people posting ranges from $0 to $3 million that's shaken out kind of more into ranges where people are showing either single level bands or multi level bands. Right. So the compliance side is really just kind of what's your comp philosophy? How do you present it? Where it's elevating the bar, and I think what we've seen, particularly with our recruiting team is, it's just changing the quality of conversation you're expected to have earlier in the process. So prior to this law, I'm sure all of us have had this experience of talking to recruiters where you ask them, well, what's the compensation for this role? And they say it's negotiable. Right? Or, you know, it's flexible based on the candidate. And at this point, while that's definitely not recommended from our legal team, that's something where it's just not good enough. And I think that recruiting here, is now being represented as the brand ambassador for your compensation philosophy, and how you decide as a company to pay. And so a lot of that is there's opportunity for you to both explain pretty directly and filter out candidates earlier in the process. And then have that be true when they start? Right. So I think that level is just elevating the bar around what we expect. And what I hope will change is that recruiters are now expected to have more thorough conversations instead of just being really black or white.

Charlie Franklin

You touched on a lot of things there. And I'm curious to dig into some of these and there's certainly a candidate experience aspect of it, maybe let's start there. I mean, if I'm a candidate now, in January 2023, and I'm applying for a job and talking to a recruiter at Nuro. I'm coming in not only with whatever you've put on the job posting about pay, but frankly, whatever, I've googled. So you know how does a recruiter now think differently about I guess, positioning the conversation so that they're not just saying something like, well, it's negotiable and sort of dot dot, dot. I'll share more later. How do they meet the candidate where they are, which is not only do they have more data, but just bigger expectations? About kind of accountability and what gets shared.

Jonathan Lydon

Yeah, the so I'll go back to kind of the the research that we that we did, we mostly did our market research. So it's mostly autonomous vehicles, FAANG companies, very tech, heavy Silicon Valley Tech, heavy. 50% of the companies that we looked at, exclusively posted on their job description, a salary range, right? So it's just explicit, it's like, this company pays this range, right, and no additional context. I think that where that's changed, and what a lot of startups have had to do day in, day out is pitch a conversation around total compensation, because there's no way for startups to compete with larger FAANG stocks, regardless of the market. If they're just gonna go toe to toe on base pay, right. So the expectation here is, yes, you discuss kind of how base pay is determined, you know, compared to geography, how you rank in terms of using like the public tools like Radford or Compa, for pay ranges. And then in addition, like where you sit amongst your peers, and the scope of the level and the job, that all determines base pay, but especially in the comp scenario, where you're dealing with startups, majority of the compensation is not legally required to be shown. So you're explicitly at a disadvantage if you only comply and don't elevate your conversation.

Charlie Franklin

Yeah, I think that's really smart. And, you know, what we're talking about is a more holistic total compensation perspective and recruiter conversations with candidates with which just has this assumption underneath it that recruiters are bringing a lot more knowledge about not only how comp works, generally being able to explain, you know, options in RSUs, but how your programs are differentiated in the market, because to your point, if you're just doing the legal minimum, it's an apples to oranges, whether your company includes a bonus or not, how you think about valuing stock, whether it's options or RSUs. I mean, this is kind of detailed stuff for the average recruiter.

Jonathan Lydon

Yeah, well, hopefully, that expectation will be changing over time, just based on the fact that you're opening the conversation, not just to comp but you're opening it to levels, you're opening it to comparative across the same org. Right, so engineering, there may be distinctions between engineering compensation. And if that's the case, like, how do you resolve that as a recruiter in the first part without essentially losing interest from candidates who are making a decision pretty explicitly based on compensation? And all of that is to say that one of the things that's baseline or I imagine will become baseline is you have to be able to speak with candor to how you're structuring where this where this role lands? Or you kind of say like "hey, we're just looking for people to contribute in multiple arenas", and that's not an explicit enough conversation that will make your job more difficult in terms of actually closing the candidates.

Charlie Franklin

Yeah. Question for you. I know, a lot of recruiters, when a rec gets opened, and they're working with, you know, a hiring manager, maybe the rec open that I'm making up a level a senior software engineer. But you go out and talk with candidates in the market and you realize, you know, the kinds of candidates you're getting or a level above or level below, and you want that flexibility to work with the hiring manager to say, you know, what, actually, we've got budget, we're gonna think about this little bit differently, this person's great. How does the recruiter navigate like that flexibility that's helpful with the guardrails put in place on the job posting?

Jonathan Lydon

Yeah. So I mean, this is live and in flux, I would say that that is not market consistent. Right now, what we've seen is kind of a range where it's a 50/50 split, for companies posting a single level, or ranges that reflect multiple levels. Right, I think it's, I think all of us can understand that it's unrealistic to have this like perfectly scoped position, that then you hire the absolute spot on level for, especially for startups early in their lifecycle. They're not focused on like building the absolute perfect leveling framework. We made the choice to use singular levels. And so we will either than this is TBD, as we will either be opening multiple roles reflecting different levels, so essentially not have an alignment between open positions and the accurate number of headcount. Or we will reflect in our terms, and kind of how we've communicated this, that the level itself and kind of the spec of the role is what we've scoped it to be, but it's candidate driven. Right. So I think that the more frankly, the less information you purchase, the more of a disadvantage you are, because you'll have folks who have assumptions around what their level should be. We have engineers at our team who are like if I'm not an L five by five years in and that's actually the company's fault, not my own fault. Right. So there's, there's confusion around like how You level company by company. And a lot of that is resolved by over communicating on the job description as well as over communicating in the recruiter screen, which means you have to be pretty well aware of the role that you're hiring for.

Charlie Franklin

Yeah, that makes sense. And the other solution that I've I've heard talked about, have not seen implemented yet, in a in a really powerful way yet, is, you know, if you need that kind of flexibility on level, you have maybe a wider salary range then would be appropriate for whoever the specific candidate is. You could link out to a total rewards career page that shares more detail about here's how you here's our philosophy, here's how we think about levels. Here's the factors that drive that. And just acknowledge that, we're going to go through a process of evaluation, that determines level and that has an impact on pay. So I just suspect, you know, because in what, what jogged me saying that is your comment about, if we have a disconnect between number of recs open and headcount forecasts, there's a downstream effect on your ability to just run the operation.

Charlie Franklin

You mentioned a couple of times a, and I see it as a question to q&a. I'll come to that next. I just want to touch on, you've mentioned some research a couple times that you've done. I do think, as I'm sure many folks are beginning to explore there is this sort of competitive angle to new disclosures. And I wonder, you know, what's your experience been so far with mining public information to serve your team's competitive advantages?

Jonathan Lydon

I wish I could say it was anything more than brute force, shout out to our recruiting operations team, which labored and understanding our market position and where we stand compared to, you know, between 75 and 100, of our closest competitors. I do see this as an opportunity not for in house teams, I think this is, you know, companies took time to build their data set. Companies like options impact companies, like Compa, you just, you can't expect this to be an overnight or extremely mature data set, it's going to be subjective. And it changes dynamically, right. So a lot of what we're going to do is at least benchmark, see the impact over about a quarter see if there's an impact to closed rates or candidate interest, we track really aggressively our pipeline performance, as well as just general inbound. So we're able to tell the story. I think one group that we haven't mentioned, which is really critical, less so to, recruiting more to HR, or the internal teams. So these pay transparency laws have the same impact for internal teams as they do external, external is a little bit easier to navigate. Right, you can use it as an opportunity to tell your story. Internal, if this is an exposure of what our comp philosophy is, and you hope that it's the same as what you've communicated to your teams, that can just lead to a lot of challenging manager and HR conversations. And I would not say that, I have not heard that any company has really navigated that explicitly. But it's something where the quicker you can at least tear the band aid off, the better you give your teams to be able to have the hard conversations that we know are coming.

Charlie Franklin

Yeah. So this touches on there's a question in the q&a. How do you see this conversation impacting internal comp? Yeah. And, you know, so exactly that question. The conversations I'm having now with compensation leaders, is their triaging the impact of these new regulations by focusing primarily on internal employees. And I think it's interesting, actually I had an exchange on LinkedIn with a couple of comp leaders about this yesterday. There's a risk, I mean, I guess the last thing you want is more transparency externally on job postings than actually internally with employees. Or maybe the worst thing is that that information is different. I mean, there's a serious trust piece at play here. And you have to be able to coordinate both internally and externally. What's that been like for you? Is that primarily working with the comp team? Or?

Jonathan Lydon

Yes, our comp team has a very strong philosophy around how to be transparent, which is discussing range discussing targets. But let me take a step back, like none of this is new for startups in the sense that there will be differences in total compensation based on when you join an accelerating company. Right. So you're joining a startup for the upside. You're joining it for the equity, you're joining it for the scope of work that you can that you can kind of advance on compared to larger companies, you're not joining it for the top of market cash compensation. Right. And so this discrepancy around, what's the total compensation for my current employee base is something that managers.. my expectation is that managers are capable of having that conversation today. What I think that the advantage here is like, well, yes, these are going to be hard conversations around why did these folks make more than I do? Or why is this role comped higher than the other? I think you have to talk about scarcity, geography level, band in terms of specialty, right? So it's like certain roles will have higher impact, depending on which company you're working in. Right. So a business operations team may be more valuable to one company than another. All of those nuances, you now need to make sure that your teams have the same conversations about those nuances. Right, but you're repeating the same thing. Because I think that's a real big challenge. You can't have the recruiting team and HR team and managers all saying different, like areas of conversation.

Charlie Franklin

Yeah, I agree with that. There are, you know, there's, there's a data piece to pay transparency, certainly workflow, but kind of at the top of that pyramid, in my mind is communication. When you think about building trust with folks, I guess, even just in that example, foundationally, data Wise, you have to be doing pay equity analysis to make sure that there are not discrepancies in the data. And then, you know, workflow wise, the expectation, I think, from from virtually every employee now is that there's some kind of process in place that is fair, and taking advantage of not only data, but the company's values and strategy. But really communication, I think, is where the rubber hits the road. And to your point, if hiring managers, executives, recruiters are not singing from the same songbook, employees are savvy, they're gonna catch it. And, you know, right now, I think especially just the way the conversation feels they could be putting people on blast if they're not cautious about this.

Jonathan Lydon

Yeah. And I mean, to summarize, its comp is extremely personal, right? So you can have a framework for it. Right. And that's great. But that's not going to solve all the hard conversations. Right. So you need to arm. I mean, the philosophy that I'm taking on this is I want to arm my recruiting team with the ability to start to have those hard conversations in the intention that then when folks do start, they won't be surprised. Right. And so if you're able to at least begin to unpeel, the conversation around this is how we think about compensation. And this is how we think about fairness. And this is how we think about communication around compensation. You can at least, I don't know defang, like the threatened, like how threatening those conversations can be, especially for managers. Right. So that's just a big point of view that I just think we can do better in this because there's no way to remove the sensitivity around comp is extremely personal.

Charlie Franklin

I agree. You touched on something that

Jonathan Lydon

I'm glad you agree with me on that.

Charlie Franklin

It is you know, you're poking and prodding on people's you know, it's their personal, it's the base need that you're meeting, everything sits on top of that. You touched on something that is of interest to me, which is kind of this ability for recruiters to work more efficiently by using comp conversations to in my mind, I see it as two things. One, you can just qualify or disqualify candidates faster. And just like getting on the same page, like if they're expecting them to be paid a million dollars, and the position is 150, there's a disconnect. And if you discover that earlier, you you waste a lot less time. So they just think there's an efficiency play here. But the second thing that's maybe more important, and I think what you were talking about too is that building trust, so that offers aren't surprises for anybody, the candidate or the hiring manager, or anyone else internally. So I don't know, talk to like, even if it's hypothetical you're not experiencing yet with your team. Is there something you hope to get out of pay transparency laws? In those terms?

Jonathan Lydon

I mean, look like I think that there's nuance to all of this, I think the intention is to have consistency, right and have your conversations with empathy. And I do think that there's an opportunity to identify folks who are curious about your company for the right reasons. Let's be clear here. I don't think that pay transparency laws are going to be easier for startups, I think they're going to be very challenging for startups, because it does kind of set the baseline around salary compensation, which is where startups have a disadvantage. So hopefully, what you're able to do is make the conversation early enough to not be about salary compensation, right. So that's not the highest point of leverage or negotiation. And you're able to make that about equity and about the upside and about your investment in the company. And that's what can lead a better conversation around total compensation. I think this will iterate a lot. I would be very surprised if we look at the ranges that we looked at over the last two weeks. And if they were the same listed a month from now. Because I think a lot of companies are going to try to be more competitive either through salary or through displaying more information. And that's where I feel like we're going to shake up a lot. But that doesn't change the fact that you should be expected to have a high level of empathy and a high level of strategic conversation around what compensation means at your company earlier on. And I think that's just the the table stakes now for recruiting, right, a recruiter who's going to say like, oh, gosh, I'm just gonna have to check with my manager on your compensation. That's just not going to cut it anymore.

Charlie Franklin

Yeah, an analogy that I've used before and I don't mean it uncharitable in any way is this pay transparency for recruiters, it's almost like the shift from being a used car salesperson to more of a strategic consultant. And what I mean by that is, somebody walks into the dealership, and they don't know how much the car costs, only you do, and you can kind of elbow the price off the windshield, and have a conversation and size them up. Which again, I want to emphasize I don't mean that on charitably, is, I don't think any recruiter wants to do that. But they've had a hand tied behind their back with a lack of data, or worse, data that is not very helpful. If folks are just bringing in whatever they've Googled on both sides. So I see, you know, pay transparency is serving to fulfill, I think what all strategic Talent Acquisition Operations seek to do, which is to be the trusted adviser to the candidate and the strategic consultant to the hiring manager.

Jonathan Lydon

Yeah, and there's a psychology around this in all of these negotiations, right, I will not say that we have done this, but I have heard multiple companies and recruiting leaders and other organizations where the pay scale they're displaying, is not the full range of the band that they can offer. Right, and there's nuance there, and there's a gray area, and whether pay scale is like, you know, actual bands and that conversation. But the reason they do that is because candidates see the top number, and they're like, I deserve the top number, you gotta give me the top number. Right. And so if you're hopefully able to start to have that conversation around their experience, and how they perform on the interview, and how they are leveled, and how their relationship is with the team, as they go through the process, how that can impact the end state of the compensation, you just make your life easier. I think there's for sure going to be an adjustment around people, what they feel like they should be earning versus what the actual offers come in. And, you know, there's going to create sensitivity. Absolutely.

Charlie Franklin

Yeah. And I think, you know, putting more context in the disclosure, can serve, having that conversation the way that you want. And then, you know, my prediction for this is that there's just a lot of eyeballs on job postings that have salary ranges. And it's like, when you're able to come up for air, you get through the internal communications, get your data organized, use it as a marketing opportunity, like to talk about, you know, how how Nuro or whatever your company is, does an amazing job of making sure that people are paid fairly and competitively and you know, whether it's from a startup perspective participating in the upside, if you're a more mature company, the stability of the cash or the outstanding benefits programs like this is, you know, you don't want to miss this opportunity. I think we're, you're getting a lot of attention on your job postings.

Jonathan Lydon

Yeah, and I think the, to go back to kind of the the data we've pulled, which, again, is subjective, and not everyone shouldn't take my information as gospel, I'm sure you can pull information that will debunk this. But what we've seen is it's only about 20% of the rules posted that are of a wider spread than $100,000. Right. So it's, like, majority of the positions that are being posted are, specific, have specificity. Right? And I do think there's like, yes, there's a harder conversation to have, if you're talking to a candidate who requires a salary base compensation of $300,000. And you're only offering offering them 100,000. Very, very different if that spread is much smaller. So being specific and having tighter bands, I do think helps you have a more realistic conversationaround, "okay, we're gonna pay you $100,000. What does that mean, for your family and for your take home and for your ego?" And for all of the parts that go into the negotiation.

Charlie Franklin

Yeah. I see the question here, it's funny it came through from Tara I was actually going to ask you this. Can you provide some guidance physicians remote in the US, and you would hire a candidate in any state? Do you need to comply with laws in the most strict states actually preempt to say, I will share what I've heard, we did a survey of comp leaders. The complexity state by state is like a huge pain. And there's a pretty reasonable heuristic that California is the most strict and to just apply that everywhere for simplicity. That's what I'm hearing from comp leaders. We've heard about 70% of organizations are doing that? What are you guys doing?

Jonathan Lydon

Yeah so, we're posting barrier ranges, unless it's explicit for other areas, right? So we do do geo based comp. Let's let's all agree here that cost of living is not cost of labor. Right? So there's a reality around what you are able to spend should be transparent. However, like if you are explicit in one state, or complying with one specific state go with that geo recommendation. I, again, we'll just we'll just keep sharing opinions on this. This will be my opinion, me sharing opinions. I think this whole the idea of not doing, like geo based compensation is a COVID relic. And I'm not sure if it's realistic or sustainable, especially in a downward market. So we're pretty well, we haven't like published what geo is equal what I do think that's probably the next stage, like you mentioned, for simplicity, right? It's just like if a recruiter can explain tier one, tier two and tier three, very, very quickly to candidates who are in those markets. That's a really important distinction. Especially over the last year, we lost quite a few candidates who would have been remote to companies that were paying barrier comp in Florida or in Texas. And I don't think that's sustainable.

Charlie Franklin

Yeah, I happen to agree with you on that prediction. And it always warms my heart when a talent acquisition leader draws a distinction between cost of living costs of labor Spoken like a true Comp leader.

Jonathan Lydon

There you go. That's a phrase that if you just want to be friends with your comp person, and you just say that over and over and over again, with no extra context, and they they love it.

Charlie Franklin

It's true, it tickles their hearts. We have a question here in the chat, Jonathan, I assume it's for Jonathan, what surprised you most working through the patron's parents the challenges and opportunities with your recruiters and comp team? What's the biggest surprise?

Jonathan Lydon

I think it's too soon to tell. I would say the biggest surprise to me is the market data and how inconsistent it is. Right? So I think that we've seen quite a bit. We've seen a number of companies that I wouldn't be very surprised are. Am I going to name names? So I'll use Google as an example. This is a nice example. Google is posting roles that have multiple ranges and the spread of their postings are over $100,000. Right. They're very, very large, wide ranging. And I would say that they give a lot of context to that. But a range like that, we'll see if that's going to be what shakes out. Right. But that was surprising to me, because Google is known for segmenting ranges and known for, you know, paying a reinforcement engineer different than a machine learning engineer, which are, which are similar skill sets, but there's a nuance to it. And there's like more specificity, they will compensate those roles very differently. So I was surprised to see them post multiple roles and very, very wide ranges. That's been my biggest surprise is like the difference company by company. And I do think that shakes out to a standard sometime this year.

Charlie Franklin

Yeah. I expect that to the data is only going to get better. We're in the earliest earliest days of this law. The other thing too, is that it's going to shake out kind of to the question earlier, and how companies set policy. My guess is that many companies are just going to err on the side of more transparent once they work through the internal challenges for simplicity sake. There's another interesting question here from Dan, thank you for sharing. This is something we thought about too, it's in the q&a raises fears, applicants will not engage based on comp. And so this gets to the spirit of why these laws are getting passed, which is really all about pay equity, and driving. You know, I guess removing from hiring processes, the kinds of practices that we know can cause bias, and then trying to drive data in to make more equitable outcomes. There is this question, though, that if you see a pay range on a roll, and you think, Gosh, I don't deserve that much money, am I not going to apply for it? Is there going to be kind of a self selection problem? Has this come up at all, kind of in your conversations or from your team?

Jonathan Lydon

Is the question. Do you think people won't apply for roles with more comp because they won't think they deserve it? Yeah. I would be surprised if that was the outcome. I think people see roles with with a lot of comp like I should apply for this. This is this would be a great thing to have happen. Speaking sincerely, we have not seen that in terms of people opting out, like we haven't seen substantial drops in applicants this month, you know, over the prior 12 days, we haven't seen a substantial drop. I also think a lot of that it's hard to decouple from the state of the market. Right? Not that many people are moving jobs. There's a lot of like, if there's a there's more of a freeze and a flight to safety. Post COVID, we saw a flight to safety of people going to the FAANG stocks that's you know, why Amazon hired 500,000 people last year, right? And I think that right now we're just in a very tumultuous time, both seasonally beginning of the year, people are like deciding and weighing out their options, as well as based on the market dynamics. So it's a good question. I could forecast, I could predict that I think that we'll see applicants drop across startups, pretty unilaterally. Meaning like, I think people are gonna see what the startups are compensating. And they're gonna say, like, oh, well, I that'd be really hard for me to consider. So that might lean more into like, startups having more sourcing support or referral drives earlier in their lifecycle. But yeah, that's that's a, you know, that's a prediction. I don't think I can be confident in that.

Charlie Franklin

Yeah, that's, you know, so there's, there's kind of the very top of funnel and how the parents disclosure impacts that. I do think, though, the quality of conversation recruiters have with candidates in that first phone screen about pay, I expect will go up, because a lot of companies we talked to when they asked the question, you know, what are your pay expectations, which is the workaround for not asking for salary history bans, you usually get one of two flavors, you get, you know, very little disclosed, which actually sidebars, what I coached friends who are applying for jobs to do. Or sometimes you get people shooting for the moon. And I think with the pay range in place on the job posting, it might serve to improve the quality of both of those risks, I think, knowing what the pay range is and you know, speaking to your reaction to that from the job posting, as well as knowing that if you shoot for the moon, it's way beyond the job range that you know, maybe you're not having the intellectually, honest, conversations that everyone's expecting.

Jonathan Lydon

Yeah, I think at Nuro, we're probably I wouldn't call us unique, but we approach candidates, it's very rare that our candidates only have one offer. Right? So a lot of what we're aligning is comparatively anyway. And if they are going to take a discount, it's like that requires a sophisticated level of negotiation. So I, I hear you and I agree that there's going to be a higher expectation on recruiters to be able to discuss this area. But I also have this feeling that it may not matter if our range is X, and then Google offers Y and it's 100% more than our range, and the candidate is going to try to negotiate for that anyway. Right. So I think that pay transparency is an incredibly valuable first step, it raises the bar for what we expect to have in comp conversations. And ultimately, for those extremely niche positions. I'm not sure about how much of the impact it's going to have to actually close the deal.

Charlie Franklin

Yeah, I think that's exactly right. And, for organizations competing for talent, and in very competitive talent markets, surely these pay transparency laws are relatively, let's say, low bar compared to the pay conversations you'll ultimately have with the best talent, where you're going through the detail of how stock options work, the growth story for the company, and everything beyond comp, of course, why somebody would join in the first place. And, honestly, you know, I think about you, from your perspective characterizing sort of startup versus FAANG, for candidates who are trying to compare pay Apples to Apples between big tech and startups, they might need a little self reflection on what they really want. These are just totally different value propositions.

Jonathan Lydon

Depends on your reputation, right? Yeah, I hear all of that. And I think that the so one thing that to kind of popped into my head is that there's a reality, where Nuro, and our best practices around recruiting, we've always had the standard that recruiters are capable of having that level of negotiation. Right. Nearly entire, like, I would say, there are some exceptions, the vast majority of our offers, it's the recruiter driving the majority of the negotiation, not the hiring manager. I would not say that's the norm in the industry. Meaning like, I think that there are so many recruiters, there's so many skill level experiences that a lot of hiring managers take the negotiation from the recruiter, which is fine. But I'm telling this group here, you should change your expectations for recruiters, like what baseline is for recruiters should be that they're able to have this level of like negotiation and communication. Right. And if that's not the case, for the recruiting team that you have or people you work with, this is your opportunity to invest in like making sure that they get the training and experience of figuring out how to do it, because that'll only serve them going forward.

Charlie Franklin

I guess, with that knowing we just have a few minutes left. Maybe one more question for you on that point. Recruiters are at the center of pay transparency laws in so many ways, which is sort of a funny thing to say you think compensation but in practice, recruiters are feeling a lot of this are on the front lines. My question is, what's one thing recruiters can do to get better at navigating conversations about compensation?

Jonathan Lydon

That's a great question. The first thing that comes to mind is, it's understanding, like, I'm going to speak from the startup point of view. It's understanding the value of your equity. It's understanding the comparative to other companies you compete with, it's how faster business is growing, the best thing that a recruiter can do to make themselves differentiate as that brand ambassador for the company, is be extremely familiar around the trajectory of the company and how they're doing, have the business case down so that you can have the conversation with more authenticity, around like, why the upside is significant, why the company is going to continue to grow, and why you work there. Right? I think that like, pay transparency, kind of what I've said this whole time is like, it's a good thing for our industry, it is not the ultimate decision maker, why people take jobs, right. So you need to be the person who's being able to reflect how this business operates, and why it'd be a great position for them to fit into.

Charlie Franklin

I couldn't agree more. With that, if there any final questions, we've answered quite a few, drop it in the chat, and we can squeeze it in. While those, if any of those come through, I'm gonna go ahead and share just a couple of things back on my screen here before we wrap up. First of all sharing this because it came up in our conversation recently, Jonathan, and this has been helpful to a number of folks. I publish a newsletter, it is mostly geared towards comp leaders. I know, some folks in the webinar here are in talent acquisition. But if helpful, we put together a framework for quality of pay range disclosure. And I've seen, I think some reaction, this has been pretty helpful, especially out on LinkedIn. So check this out, you can access this by finding our newsletter, our team will make sure you get a link to it. We talked about you know, basically up leveling your disclosure from the bare minimum, towards, you know, putting more context bringing in the bigger picture with how your comp works. And then you're really getting your values and strategy on to those those pay range disclosures. And, finally to, again, we have that pay transparency map as a resource it's free on our website. It's geared towards recruiters. Check it out, we update it as the laws change, which they're doing a lot. They obviously had some big changes on January 1st, there's more coming later this year. Additionally, Compa will be hosting another webinar in February, with a focus on how tech layoffs are changing compensation now, so stay tuned for more information about that, including date, and speakers. And with that, any final questions in the chat or anything else, Jonathan, that you'd like to add that we didn't get to today?

Jonathan Lydon

No, thanks for having me. It's dynamic. So if you disagree with me, or you've seen different things like please shoot me a note on LinkedIn, I'd be happy to jam on this stuff. It's we're still all trying to figure it out on our own.

Charlie Franklin

Well, great with that. Thank you, Jonathan, for joining us today. Thanks, everyone for joining our webinar, and everyone have a great Thursday afternoon.