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Remote Work, Compensation, and Age Dynamics: Unpacking Digital Health Workforce Trends · StartUp Health NOW Podcast

• 0:00
  Welcome back to StartUp Health NOW, the podcast where we celebrate the entrepreneurs and the innovators who are transforming health. I'm your host, Logan Plaster.
• 0:08
  [gentle music] Today, we're talking about work, specifically the digital health workforce, and we're talking with the one and only Polina Hannon, senior principal at Aequitas Partners.
• 0:18
  I had the pleasure of working with Polina for a few years in my early days at StartUp Health, and I don't think anyone has a better grasp on the digital health ecosystem.
• 0:27
  She's worked with hundreds of founders and executives across healthcare. When she moved over to Aequitas, an executive recruiting firm in the digital health space, I knew she was gonna help a lot of people.
• 0:38
  One thing she did, and the reason behind this interview, was help launch the industry's first and certainly most comprehensive workforce survey.
• 0:46
  If you work in digital health, you've probably seen information about this floating around in your inbox.
• 0:52
  In our conversation, which took place at Vive in Los Angeles, we get into exactly what Polina has learned after four years of conducting this workforce survey.
• 1:01
  Of particular interest to me were the trends around remote work compensation, attitudes towards hiring remote workers, and how work priorities shift as we age. Let's get right into it.
• 1:14
  [upbeat music] We've talked many times in the past- We have... but never in the interview chair, so great to have you here. I'm very nervous. [laughs] Yes. Uh, I'm sure you are not.
• 1:24
  [laughs] Um, you know so much about this industry. You've been around a long time, but your most recent work is fascinating to me and will be to our viewers.
• 1:32
  For four years, Aequitas has been doing a, uh, compensation survey. What do you call it? Compensation study. Okay. [laughs] A compensation study- Yeah... specific to this market. Mm-hmm. To digital health? Yes.
• 1:43
  That's okay. So a digital health compensations, uh, study, I would say maybe the first? Yeah. The first ever. First, uh, and, uh, certainly largest. First- Yeah... largest, and now consistent over four years- Yeah...
• 1:55
  so that's really, really useful. Thank you. [laughs] And so let's just talk about some of the things you've learned. This most recent one came out in January? In December. December. Yeah. Um, high points? Yeah.
• 2:07
  Things that you found curious about this study? Yeah. Yeah, so, um, to take i- uh, kinda take a little bit of a step back, so why we're doing it in the first place, I, I think is important as well.
• 2:19
  So Aequitas builds up leadership teams for high growth, uh, companies in this digital health healthcare space, and throughout all of the growth within digital health, um, there's never really been consistency in terms of how should we be compensating the individuals who actually make these companies run, and- It's just a black box Right?
• 2:42
  Huge black box. Totally. Um, you don't know it based on stage of company, or how much capital is raised, or what the company is doing.
• 2:50
  Everything is a little bit of ups an- uh, up and down, and you're relying on anecdotal information- Yeah... or information that you have to pay thousands of dollars for in order for you to be able to get.
• 3:01
  So, um, four years ago, we kinda sat around and thought, "Should probably do a compensation study," because our name means equity in Latin, and- Mm...
• 3:12
  what better way to spread a equity of opportunity and information- Yeah... than to, uh, do a compensation study? So, um- Plus, very practical. High level- Yeah...
• 3:20
  you know, headhunting, recruitment, you gotta know- Absolutely... what's the rate. Absolutely. So we launched the ex- uh, executive digital health compensation study, and it's been
• 3:35
  very interesting over the last, say, couple of years. In 2020 and 2021, compensation from a cash position was going up, up, up. Mm. Money and capital was free.
• 3:45
  I'm sure you've heard this from [laughs] a variety of- Yeah, yeah... entrepreneurs and investors, that there was tons of cash coming in, and so in order for you to compete for the best talent, you had to pay them.
• 3:56
  Mm-hmm. So all of a sudden, 2023 rolls around, and 2023 was a little bit of an odd year from a venture standpoint.
• 4:05
  You didn't, certainly didn't have as much, uh, capital coming in, and so when we're talking to execs or when we're talking to company leaders, they're like, "Must be plenty of, uh, humans out on the market.
• 4:18
  There is reductions in force all around." They must be desperate. They must be desperate. We're gonna go back to, like, 2019 compensation. Not [laughs] at all. Oh, okay. So while compensation- When you say not at all...
• 4:31
  Compensation wasn't down. Okay. It was relatively flat. Okay.
• 4:35
  So what we saw across all the functions that we m- uh, measure, we measure all the major functions that you would have within a, uh, within a startup organization. Um,
• 4:47
  comp was kind of 1% to 3% up across, uh, across the board. There were a couple of pops up. Uh, so sales and revenue leaders saw a pretty big boost. I think it was close to 7% or 8%.
• 5:04
  Um, business development, individual contributors were down, um, and that was the only really major function that saw a downturn in compensation. Okay. Okay.
• 5:14
  But most of that is based off of how you're compensating those, uh, leaders as well. Got it. So it's maybe you're not paying them as much on a base, but they're still making that- And you dig into some of those details.
• 5:27
  Uh, you're still... Yeah, you're still making that up. Yeah. So that's, uh, for us, uh, when we're looking across the board, everything is pre- uh, everything is still pretty flat.
• 5:37
  Because at the end of the day, you need great leaders, you need great execs in order to build companies in an increasingly complex market. Yeah.
• 5:47
  A- as we both know, you know, that compensation is just one piece of the pie. Sure. Building your ideal team and, you know- Yeah...
• 5:53
  we're talking, uh, to a lot of founders at StartUp Health, and they're trying to get the best team on a limited budget. Yeah. So talk to me about-What it takes to bring in, uh, top talent. Mm.
• 6:04
  Maybe you, maybe you're struggling to meet those, those top numbers- Yeah... and so you have to make it work elsewhere. Yeah. How, how do you do it? So compensation comes in a variety of different levers.
• 6:15
  So the most practical ones are going to be your base, your bonus, and your equity. So at its ear- at the earlier phases, what a company really has going for them is going to be the equity.
• 6:29
  How do you communicate that upside- Yeah... is going to be a really big thing.
• 6:32
  But what we've seen over the last several, uh, quarters is that it's, it's not just the equity that's going to get somebody engaged, or the mission of a company that's gonna get somebody engaged.
• 6:45
  It's honestly the leadership itself. Okay. So what do the founders know? How do they run their business? Mm. What is the stability of that, uh, of that entity going forward, such that somebody may want to take a leap?
• 7:01
  Mm. Um, so I think getting real- This is a person that I want to follow, be managed by. Exactly. Yes. Exactly. Yeah. When, uh, so part of our compensation study really looks at why are folks leaving- Mm...
• 7:14
  or what would make them want to leave.
• 7:17
  And consistently over the last few years, and particularly in, uh, this year, um, outside of a, you know, reduc- a full, a full-blown reduction in force, one of the reasons, uh, that people are leaving, that is the top reason, is lack of leadership in the company.
• 7:34
  Mm. And one of the, uh, reasons why they would join another, uh, company, they may not be saying compensation, but they are saying leadership and stability of that organization. Interesting.
• 7:45
  So sta- our perspective is stability, or at the very least perceived stability, is almost the new currency. Interesting. Um, are you learning anything about people's desires to work remotely? Yeah.
• 7:59
  So it's, a lot of, uh, companies have started to go back into a bit more of a hybrid. Hybrid, okay. Um, a hybrid model.
• 8:08
  A lot are going into, um, like three days in the office, uh, two days remote, that, that kind of thing. Which I, which I love. Yeah.
• 8:15
  But once you, once the genie was out of the bottle in terms of talent being from anywhere in the world, you know- Yeah... how do you, how do you deal with the desire to have a hybrid workplace? Yeah.
• 8:24
  I think it's, you know, um, it's honestly up to the individual who's running the company at the end of the day in terms of the way in which they want to build up their company and build up the culture. Yeah.
• 8:39
  So we are seeing, even within our search work, uh, the CEOs are requesting that there is a little bit more of a geographic constraint- Mm... uh, to the search. Interesting.
• 8:53
  Um, one of the things that, uh, we initially thought is like, oh, if you're a company that is based in San Francisco, but you recruit out of anywhere else in the country, you're gonna, uh, get great talent- Yeah...
• 9:06
  but they're gonna, uh, want, uh, lower compensation. No, everything is normalized. [laughs] Interesting. Okay. Effectively, maybe- So just 'cause you're from Toledo- Yeah... doesn't mean you wanna make less- Exactly...
• 9:16
  than the person in San Francisco. It may be in part due to our compensation [laughs] study that we're releasing, what people are making. Interesting. Okay. Right? So that- That's huge. Yeah. What you just said is huge.
• 9:26
  It's, I think it's... Y- you have to pay for the value of the talent- Yeah... that you're, that you're bringing in. And, uh, sometimes there's going to be trade-offs.
• 9:35
  If you do want somebody completely in-house, and you want, uh, to bring, uh, somebody into an office, you're gonna need to look at what's around you. You're gonna make some of those trade-offs.
• 9:47
  So I think, uh, companies are still in that decision mode. Yeah. Um, I also think that, that it depends on how large your organization is. Sure. Um, if you...
• 9:59
  Listen, you have to be able to afford real estate in an office- Yeah... uh, first in order for you to be able to, uh, bring- Yeah... your, uh, your team in. Um, and so- But it's just, yeah...
• 10:09
  every company's kind of reacting to it a bit differently. It's philosophical.
• 10:12
  But yeah, culturally, it is interesting to hear that you're seeing on the front- front lines that people are starting to ask for a bit more regional focus to the search. Yeah. Like, actually tighten it in. Yeah.
• 10:20
  Actually, the time zones are kind of becoming a problem. Yeah. They're kinda... I don't love it. Yeah. Uh, I'd like to see them every now and then. The culture maybe is not what I want it to be. Mm-hmm.
• 10:30
  Um, and, and you're, you're seeing that kind of, the first hints of that would be in the job search- Yeah... itself. Yeah. Um, very interesting. Um, you know,
• 10:41
  what's kind of, you know, sort of piquing your interest here- Mm... we're, we're at ViVE, and you're walking the floor. You've got an interesting sort of cross-industry view. Mm-hmm.
• 10:50
  Uh, and also obviously the, on the recruitment employment side. But, like,are there trends that you're sort of curious about here? I, I think, um, everyone is talking about value-based care and AI.
• 11:02
  It's, uh, almost a, like, I mean, you could create a [laughs] nighttime drinking game [laughs] in terms of how frequently you hear some of, uh, some of those terms being thrown around.
• 11:14
  What I'm really curious about is the companies that are trying to work with different types of stakeholders, and really pushing, uh, the boundaries there.
• 11:24
  Um, how can we actually, uh, line up the incentives between hospitals and payers?
• 11:31
  How can, uh, we bring specialty pharmacy and, uh, pharma in along for the ride in order to align their incentives with the cost of care or the access to care?
• 11:41
  And so I think that the jury is still out in terms of some of the bigger buzzwordy trends, uh, that we are seeing. But the companies that will, it... The companies will have staying power.
• 11:54
  They need to create that longitudinal, um, framework in order to actually de- deploy their technology in these brand-new environments in order to align the incentives between the stakeholders too.
• 12:07
  When I think about those new environments, whether it's value-based care, AI, I think about, like, what are the interesting sort of experience elements- Mm...
• 12:15
  that now are becoming more valuable to employers?Based off of those trends. Yeah. So, uh, I... Is...
• 12:22
  There's sort of like the really obvious skill sets that everybody wants, but then obvious- but then there's sort of like the less intuitive- Mm...
• 12:28
  uh, elements, like, "Oh, let's make sure we get someone who's worked at this company- Yeah... 'cause we want that." Yes. Are you noticing anything like that? Oh, and we, and we see that all the time.
• 12:37
  You see kind of transferability- Mm-hmm... of, um, of skillsets that somebody wants.
• 12:42
  Like, "Oh, I want somebody who has done, for example, the Redwood program at DaVita," and so that would be a nice skillset to have in order to bring that here. So there's that level of specificity. So... Oh, yeah.
• 12:52
  "I want someone who's done that for so and so." Yeah. Yeah. So there's a bit of that. But- "Now do it for me." Well... Exactly. But what we actually see a...
• 13:00
  I mean, you, um, see it at the company level, like in terms of vintage, "Oh, I want somebody who has, who was at that company in these years because they will have seen a certain set of growth." Okay.
• 13:13
  What we're, uh, what we see with companies at the earlier stages, particularly like Seed, Series A, is like composite roles.
• 13:23
  "I want a product leader who also can talk to customers and therefore be a little bit more commercial." Mm. Yeah.
• 13:28
  Or, "I, uh, would really like, um, a, a finance leader who can not only help me raise capital, but can also look at my operations and figure out what, uh, what can be improved over time.
• 13:43
  I would like a sales leader who also knows how to do marketing." So you're trying to combine a lot of things in one. Okay. And so you're getting... Uh, part of it, I think, is a little bit cash, uh, constrained.
• 13:55
  You're trying to, uh, to get a little bit more- Yeah. To employ someone. Exa- exactly. But the, uh, the other part is you have to understand how nimble somebody has to be- Yeah...
• 14:04
  in order to be able to be impactful within an early stage organization, in order to be able to flex into different territories within the company.
• 14:16
  I- has technology somehow made more blending [laughs] happen between roles? Yeah. Or is this just what happens all the time? Uh- I think it, uh, I think it's just, uh, what happens. Yeah.
• 14:28
  Um, certain, uh, certain individuals are just keen in that build mode, and they will do whatever it, whatever the company needs and whatever it takes. Yeah.
• 14:37
  And then they build it up, and they're, they're no longer interested in the scale and the tech, uh, part of it to really accelerate it, and they're gonna go into a brand-new company where they can build something else from scratch.
• 14:49
  Yes. It's just how certain humans are wired- Yeah... uh, so to speak.
• 14:53
  And so I'm sure that there's technology that makes all of that possible, the way in which we communicate, whether it's project management, uh, tools, or other things that we've had to adapt because of the remote environment.
• 15:05
  Um, but I think it's, uh, the persona of the humans who actually come into these organizations that truly makes it work. Yeah.
• 15:12
  One thing I, I'm curious about in terms of the workforce is just how baby boomers and millennials- Mm... and Gen Z are just sort of like thinking about their lifetime, their life priorities differently. Yeah.
• 15:23
  Are you seeing any of that play out? Yeah. Yeah, we do. Um, we see that, uh, play out in terms of individuals, how they want to shift, um- Mm... into new, uh, into newer roles. So we talk to people all the time, right?
• 15:37
  "I'm no longer interested in just being cog in a wheel. I wanna do something a little bit more, uh, mission oriented or mission driven." Sure.
• 15:44
  Or even individuals, when we talk to them, they're like, "Oh, I'm pas- uh, I'm passive. I'm, uh... But I listen." And then you tell them about a mission of the company, they're like, "Actually- Mm...
• 15:54
  uh, one of my parents is going through this. This is now really interesting." Interesting. Interesting. Um, so we absolutely see that, uh, see that happen. Um, I think you- it's, uh...
• 16:09
  The, uh, the earlier that somebody is within their career, they also tend to be a little bit more mission driven, um, frankly because you're able to take on just a bit more risk- Yeah...
• 16:21
  um, at that, uh, at that point of your, um, of your life, career. Maybe there's like a, there's like a curve. A little. A little bit. A little bit. Where at the top is you're more concerned about compensation. Yeah.
• 16:32
  I think, uh, it, it depends on, uh, what you have, uh, going on personally as well with family- Yeah...
• 16:36
  kids, like where they are, um, where you are within your life, um, in terms of how risk averse or drawn to it you are.
• 16:46
  Um, some folks are also just gluttons for punishment [laughs] and will go b- back into the entrepreneurial game, um- Yeah... any day of the week.
• 16:53
  And m- at that point, again, mission coupled with who is driving towards that mission is gonna be really critical. Love it. Polina, thank you for taking- Thank you... the time with me. Thank you to Aequitas for- Yeah...
• 17:06
  doing this study four years in a row. You're doing a service for the industry. Thank you. And, um, it's been great to learn more about the trends in the industry- Such a delight...
• 17:13
  and have you here in the interview chair. Thank you very much for having me. Any time. Thank you for coming. [laughs] Thanks for listening to Starter Health Now. We'll be back again with another episode next week.
• 17:25
  [upbeat music]