Latest / Beyond the Paycheck / The Compensation Issue Nobody Has Solved Yet
Transcript
- Kelsey Willock (00:42) Welcome Chris Toney, Senior Director of Total Rewards and HR Operations at Quest Software. Happy Monday and thank you so much for joining us today. To kick us off, I'd love for you to share with our audience a little bit more about yourself, your career and background and where you're calling in from today. Chris Toney (00:58) Hey Kelsey, happy Monday to you too. It's great to be here. Thanks for having me on the show. I'm calling in from a town called Franklin, which is about an hour south of Boston. I've been in the HR space for ⁓ over 15 years now, which was a bit unexpected because I was actually an English literature major in college. And truth be told, I'm actually quite bad at math. So how I ended up in Total Rewards is actually a It's quite a shock to me, but I like Excel, I like analytics. And I think with the technology today, you can really kind of be left or right brained and bring your perspective to total rewards and compensation in particular. Most of my career has been pretty much all of it in the high tech space. Did a short stint in HR operations and then moved into compensation. And from there, I've always had a comp-focused role, but as you know, I've progressed in my career, expanded it to benefits, got back in HR operations, and then HR ES. Kelsey Willock (02:01) Well, I also was an English major in college, so we could probably take this conversation fully off track and talk about all the books that we love, but I'll try to keep myself. So one of my favorite questions to start off with before we get into all the brilliant work you're doing in total rewards and HR benefits and more is tell me your earliest memory of money. Chris Toney (02:08) It sounds great. Yeah, I have to say, it's probably my first communion. Because I remember at the end of, you know, your first communion, I don't really remember any other church stuff or anything like that. But I remember getting a lot of money, or at least what felt like a lot of money at whatever age that happened at. It's been a long time. And what was interesting is like, I remember getting a combination of cash and then like savings bonds. And being so young, mean, the cash I understood, but the bonds was kind of a weird concept to me. So I knew I was getting all this stuff, but I just, think back now and it was, you know, I feel really fortunate that I had a bunch of adults in my life that were setting me up for a financial success at even such a young age where, again, I understood the cash piece, but like savings bonds and even some stocks was really foreign to me, but I was able to just kind of. trust the adults around me that they were setting me up on good financial footing. Actually, some of those bonds I ended up, after graduating college, they'd finally matured. I was able to sell them and buy my first car. Kelsey Willock (03:32) How cool is that? I haven't heard this story yet, the experience of having your first money conversation around a first communion, but it totally makes sense. So many of us, we get gifted things, even in a letter from a grandparent with 20 bucks in it, going to funeral. What was your first job? And do you remember what you spent your first paycheck on? Chris Toney (03:33) Yeah. Right? Yeah, for sure. Yeah, so my first job was at Shaw's supermarket. Actually, both my parents had had careers at Star Market, which is owned by Shaw's. And so I got a job there, started out just getting carriages and eventually worked up to working ⁓ as a cashier, which was stressful at the time because again, I'm not great at math, but you know, got the keys on the register. I don't remember a first purchase, but it was long enough ago that I remember getting the paper check and actually having to go cash it, which seems like such a foreign concept now. But I remember the feeling of having the cash in hand and how much more real that feels, I think, than today. It's just direct deposit. It's kind of like almost imaginary money, you know? So I do remember that quite well. Kelsey Willock (04:47) Yeah, I think that even for me, I remember going to the bank to cash checks or cash gifts and things like that. But my favorite part about it was just getting the lollipops because that's my memory of the bank. Chris Toney (04:59) Yeah, Yeah, for sure. They still have lollipops where I go. usually now it's my kids though that get them. I'm happy to just have the cash in my pocket. Kelsey Willock (05:10) So how do you think your money story has impacted how you think about pay benefits to rewards and more for your employees? Chris Toney (05:19) Yeah, well, think there's a couple of different aspects of pay. And they sort of always, in my mind, seem to get sort of convoluted and jumbled up into one. But I think, first and foremost, when we think about compensation, and Daniel Pink actually talks about this in his book, Drive, like, you need to make sure that you're paying like a fair and competitive enough wage that you're sort of taking money off the table as an issue, right? And certainly there's certain roles where you see that, where people are barely making enough. They are probably distracted by being able to pay the bills or pay off the college loans or provide for their family. So I think that's one aspect that I think a lot about. especially my parents working at a grocery store growing up, money at times was tight, although they always provided for me and my brother and sister. The other aspect is more of that, the fairness, where people are really concerned with how they're paid relative to each other and I think to a lesser degree, the market. And so that's one that's always fascinated to me. I remember having a CEO who would talk about, it doesn't matter if we're paying $10 less than the company down the street, as long as the people in this building are being paid fairly relative to each other. That's a much more visceral and meaningful experience for them than what some company down the street's doing. And that's always stuck with me when I think of employee pay. Kelsey Willock (06:58) Well, you bring up a really important topic that I think is an incredibly hot topic right now, which is pay transparency and fairness. But more broadly, when you think about the breakdowns in terms of pay and benefits going on today, what do you think is the biggest breakdown? Is it pay transparency? Is it something else or maybe a combination? Chris Toney (07:20) You know, I... I think one of the biggest challenges is generally compensation as a discipline is a bit prescriptive. And you'll oftentimes meet comp professionals who have sort of a dogmatic approach to the comp methodology and the pay bands and sort of the ways that we enforce compliance to the structure. And I think that's important, right? Because we're like stewards of the business and we... need to make sure that we're paying fairly and equitably and also sustainably for the business, right? Companies can't just spend money haphazardly. But I think there's an aspect of pay that sort of gets lost when we try to force it too aggressively into a structure. And that is that it's a deeply personal experience. And I think especially over the last, say, 10 or 15 years, As we've really normalized people moving roles more frequently, people's pay can, you you can have two people that are in the same place in their career, but one stayed with the same company for 10 years and one switch companies three or four or five times and their pay can be wildly different. And that, you know, you can tie back to things like annual mirror budgets averaging around 3%. Whereas of, you know, if you go to market and you go through a hiring process, you might expect 10 to 15 % increases. And so. I think that's the tricky thing with pay is like you want to have it standardized and sort of compliant within a framework, but it's also, again, it's such a deeply personal thing to each person and their journey and sort of what they expect to earn in their next move. I don't think we've quite figured out how to reconcile those two things fully quite yet. Kelsey Willock (09:07) Yeah, because it gets even more complicated when you think about, I remember in the beginning of my career, millennials hold something crazy, you know, a new job every two years, something like that. And there's a lot of economic benefit to it. Whereas from a company perspective, there can be a lot of costs in terms of, you know, retention challenges. So how do you create those incentives for people to stay while also recognizing it may not be sustainable to give people 10, 15 % raise on a Chris Toney (09:19) Mm. course. Kelsey Willock (09:37) basis. So it's certainly nuanced, but I'm very excited about, you know, the regulatory changes coming out that help, you know, systematically answer some of these deeply complex challenges. Chris Toney (09:49) For sure, I mean, I think one great step in the right direction was having to post salary ranges on job postings and really just bringing the conversation to the forefront. I also really liked, it seems like it was many years ago now, but the shift from saying, what are you making today to what would you like to earn in your next role? I think that's kind of a subtle shift, but. Kelsey Willock (09:56) Right. Chris Toney (10:14) you know, as a comp professional, think like that is the right way to frame it. It's like, what's the role worth? It doesn't really matter what you made in your last ⁓ job per se. Kelsey Willock (10:23) How do you communicate those types of changes, whether it's to senior management at the company and even the managers that are really in the weeds of these hiring processes, how do you help them adjust changing landscapes? Chris Toney (10:33) Mm-hmm. Yeah, I mean, I think a lot of it is just raising the awareness when it's something compliance related. ⁓ You know, I've oftentimes had really strong relationships with the HR business partners within my org. So think collectively going to the managers and really being sort of partners and advisors to managers has been helpful. Talent acquisition is another one. working with the recruiters and doing enablement sessions. So I think it's sort of having like multi-touch with the business, right? It's them hearing it directly from me. It's me enabling the HRBPs. It's me enabling the talent acquisition folks to just make sure the messaging to the business is consistent and aligned. So I think that's a huge piece. And then, you know, I like to... use compensation programming as an opportunity to really embed a lot of this stuff into the organization, right? Because it's such a high touch time with your managers and your leaders. So, you know, of course they want to know their budget, they want to get their planning sheets and run with it, but it is a good opportunity to kind of pump the brakes and talk through some of the compliance and other like kind of landscape changes that may be new to compensation. Kelsey Willock (11:51) So you touched on your taking over this world of benefits as well as not only total rewards. I'm curious in your experience if you've ever seen the introduction of a new benefit that you've gone from just attracting talent to really transforming the lives of your employees. Chris Toney (12:08) Yeah, think, I mean, probably the big one that I've looked at at a few companies that I've worked for now is the fertility stuff, which is personally important to me. My wife and I actually used, went through IVF to have our daughter. So that to me was a really exciting one to start to see employers take that on. Kelsey Willock (12:17) Mm. Chris Toney (12:29) It can be challenging because that tends to be a more expensive benefit to add on. But that's one that in particular, mean, you know, just bringing life into the world and raising children, like anything that a company can do to support that I think is incredible, especially if you pair it with a generous parental leave. Kelsey Willock (12:48) Right. I love that example and it's certainly from a cultural norm perspective. I wouldn't say it's expected yet, but it's such a massive win for attracting folks to companies when it's introduced. We're also at a really interesting time though right now where healthcare cost increases are putting a lot of top-down pressure on, folks like yourself as we think about building out really strong programs. So how do you communicate the value particularly for programs like that that might be more expensive and go beyond the traditional just healthcare debt toll etc. Chris Toney (13:29) Yeah, so I mean, in terms of like, do you mean like to kind of pitch it internally to get buy in to add those types of benefits? Yeah, yeah. It's a good question. Kelsey Willock (13:35) Exactly. Chris Toney (13:39) I mean, a lot of benchmarking, which I think is one of the things that Comp and Benefit share is just the ability to take a look at what's happening in the market and then to come back to your leadership with like a ⁓ data-backed recommendation about making changes to your current ⁓ operating model. So, you know, I've been fortunate to have worked with a lot of great brokers in the benefit space and that ability to work with them to get the benchmarking data. and then obviously to be incredibly diligent through the RFP ⁓ process. So making sure that you're looking at multiple vendors, getting a lot of quotes and then really being able to frame it not so much as should we do this or not do it, but which one's the best one to go with in terms of not just value but price. Kelsey Willock (14:29) Yeah, it makes a lot of sense because I imagine the cost is a big component of it as well as the storytelling. ⁓ What's the measurable impact you're looking for when introducing programs like that? Chris Toney (14:37) for sure. You know, I think it depends. mean, in the benefits space in particular, like utilization is obviously a huge one, right? I think another area that sometimes is overlooked but can be really beneficial is looking at things like in your HCM, like your termination reasons or even candidate rejection reasons. So I think to the extent that you can partner across HR operations. to make sure you're sort of doing that diligence, that fact finding, and then recording it. The ability to see if it's impacting people's decision to join your organization or to stay with the organization. I think that's one place to kind of measure ROI. And then I'm also a big fan of, especially in the benefit space where I think the anecdotal component is a bit more. tenable than on the compensation side, which maybe has to be a bit more objective. I like round tables. So going across regions and sitting down with pockets of employees and just hearing about what's working and not working for them and being able to take that information back to the broker. So those are the of the ways I like to measure utilization and impact. Kelsey Willock (15:56) I love how you think about it both qualitative and quantitatively because I think of immediately the Yelp review idea that only really the most vocal people will engage in even feedback. So making sure that it's not just about who's filling out the survey, but it's also hearing and conversation how things are going. Chris Toney (16:00) Hmm. Yeah. 100%. And I will say with the round tables, like whenever I've put those lists together, it's always a few of us in HR and we like, we know who we're picking. You you pick a couple of happy customers and a couple of unhappy and then maybe some middle of the road people. So, yeah, you know, you bring up a great point, but really being deliberate about getting a nice cross sample of the population. Kelsey Willock (16:27) Thank What benefits trends do you think will shape the employee experience most of the next year? Chris Toney (16:47) You know, I think probably the biggest one that we're seeing a lot and it's been kind of a roller coaster ride is a lot of the weight weight loss stuff has been really interesting to see. It was covered and now it's not covered and seems to be a path back towards recovery. And that's always so interesting to me because especially as ⁓ of the science behind it changes rapidly. Like you see like declining costs and a greater appetite, ⁓ no pun intended, you see a greater appetite for those types of benefits to be covered. So that's one that's super interesting ⁓ to me. And then I think just broadly like you look at the way AI is being incorporated into the landscape. And I think just people's ability to better understand even benefits that have existed for a long time, but really how to navigate or utilize them. I think that's gonna be interesting to see how even long standing benefits maybe change or evolve over the coming years. Kelsey Willock (17:54) Yeah, you know, it's such a good point because our benefit systems are getting much more deeply complex, which is positive in many ways, right? They're getting more and more helpful and more custom and personalized. But what that also means is there's greater complexity to them. you know, many. Chris Toney (18:02) Mm-hmm. Mm-hmm. Kelsey Willock (18:13) Even value points are often missed. was just on a recent conversation talking about a fertility benefit and the company didn't realize, or the employees of the company didn't realize there was also doula care involved. The perfect example of, you've got great benefits that are evolving, but the communication of how they're evolving is still a major challenge. Chris Toney (18:25) wow, okay, yeah. Mmm. Yeah, and that's something that me and my team struggle with all the time is with benefits in particular, you know, there's this constant need to be looking at it from the 10,000 foot view and then really like the two foot view, right? And I think that like sort of micro, macro dynamic can be really disorienting where it's like, ⁓ you know, I should participate in retirement. And it's like, okay, well, there's your 10,000 foot view and that makes sense. Kelsey Willock (18:47) Mm-hmm. Chris Toney (19:04) Then you go in there and you see there's how many different funds to allocate across and there's bonds versus mid market and large cap and looking at things like gross expense ratio. So yeah, it's just benefits in particular can be really challenging to kind of scale at the high level concept, but then you get down into the weeds, it can be very intimidating to say the least. Kelsey Willock (19:30) Have there been any tools, features you've built in-house, even cultural changes that you've enacted that have helped address that? Chris Toney (19:37) At Quest, not yet. I've been with Quest only since January. But one thing that I've done before, I mean, it's quite low tech, but seems to work well is just having some sort of like a benefits channel, whether that's in Slack or emails. So actually hiring for a position recently and I was talking to the candidate about, liked the way they framed it was better than anything I've seen or done. It was like wellness postcards. And so they would just feature like one benefit. I think it was once a month. But I find like that monthly cadence of just kind of spotlighting a benefit can be really, really beneficial. And then of course, you know, that type of thing is very easy to compliment with a lot of the major. carriers and providers, you know, have resources available to do webinars or even come on site around the time of, open enrollment, for example, and help employees better understand and navigate certain benefit offerings. Kelsey Willock (20:43) I love the example you gave because it's also, you know, it's not an additional cost. It's especially if you have some type of internal communications channel, which some do. It's just the reminder that we are all so inundated with competing priorities, that continuous reminder rather than just, you know, for instance, open enrollment is so important. I think there was a go for it. Chris Toney (20:50) Mm-hmm. Right. ⁓ so yeah, it's interesting because I think one of the biggest challenges in the total reward space in general is the amount of ⁓ investment and spend that companies put into not only their benefits, but their compensation structures. And then some combination usually of like a lack of transparency or maybe enablement, like the employee perception of that investment isn't always there. And I always think back to, there was, it's old now, like 2011, but there was a, you can still find it on YouTube, it's a work span Mayo Clinic study about pay perception. And I guess they did a survey in the employee population, it's like a 17 % positive perception of pay. And so what the HR folks did at the Mayo Clinic was without spending any additional dollars on their comp structure or their salary ranges, ran a ton of enablement and really helped managers and employees better understand how they benchmark and how they set the ranges and how they manage pay within the ranges. And I think the year over year change was something like 17 % to 80. without again spending even an additional dollar, was really just, it's just educating folks and making sure that you're doing a good job advertising the benefits and the compensation structure that you already have in place. Kelsey Willock (22:41) Given the access to information that we all have at our fingertips, it makes sense that people want that transparency, even just that how does this calculation get made? Is there intention behind this decision? So I love that example and I'll definitely be seeking out that video. If I can't find it, I'll follow up with you after so you can put it in the link to this podcast. I think it'd be a great source of information for folks to follow up on. Chris Toney (22:58) Yeah, please do. Kelsey Willock (23:08) So we're pretty much at time. So I have one final question for you as we wrap up. What's a 30 day experiment our listeners can try to boost their company well-being or even financial well-being? Chris Toney (23:20) Yeah, this one isn't probably totally bounded by the 30 day, but I think the biggest thing that I can't say enough is like, check your 401k, you know, or whatever type of retirement plan you participate in. Not to be dropping references left and right here, but John Oliver on last week tonight had a great ⁓ segment he did on it years ago and talking specifically about the gross expense ratio and and people not understanding like how much of your investment may actually be kind of going away in fees. So I think with the 401k in particular, it's not just, are you participating? It's, you know, does your employer have a match? And if they do, what percent is it? And then are you contributing enough to maximize your employer match? And then another thing a lot of people don't realize is usually there's a vesting terms associated with ⁓ the employer match portion. making sure that you're kind of navigating all those. That's one of those areas where if you're switching a job too frequently, you could actually be losing some of that retirement money. again, not totally bounded by the 30 day piece, but I really can't stress enough like how important it is to make sure you're participating to the max on 401k. Kelsey Willock (24:38) Hey, it could take you 30 days. It could also take you one hour to do it. Just the important reminder is to make sure that you actually do it. Well, thank you so much, Chris, for your time and your candor on all of this phenomenal information that you were able to share with us. I think that it was so tangible, and I certainly learned a lot from you. So deeply appreciate you joining us in this conversation. I'm curious where our listeners can connect with you beyond it. Chris Toney (24:42) That's true. That's true. for sure. I mean, LinkedIn's always a great place to start. on there every day. I think my URL is just like LinkedIn, Ford slash Chris Tony. So easy to find there. Cool. Well, Kelsey, I appreciate you having me on. It was a pleasure and it's always great to meet a fellow English major. Kelsey Willock (25:23) Well, we'll connect offline and talking all English literature. We want for our audience with it. Well, thank you so much and have a great rest of your week. Chris Toney (25:32) Thanks, you too, bye.