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David Wrangham, VP Total Rewards at Vimeo · Beyond the Paycheck

• Kelsey Willock (00:42) Welcome David Wrangham VP of Total Rewards at Vimeo. We are so beyond excited to have you today, particularly on this Friday afternoon. To kick us off, I'd love for you to introduce yourself to our audience, share a bit about your career and background, where you're calling in from, and your current role today. David Wrangham (00:58) Sure. ⁓ My name is David Wrangham. I'm the Vice President of Total Rewards at Vimeo. In terms of my career and background, slightly interesting background ⁓ because I grew up a little bit all over the world, which gave me a little bit of a global focus. So I spent about six years in Uganda growing up, about five years in the UK and the rest of the time in the Northeast of America. And today I'm calling in from the Northeast. in Harvard, Massachusetts where it sunny and snowy. Kelsey Willock (01:28) Wonderful. I am calling you from cold San Francisco where there is no snow. I'm going to us about that. So before we dive into all the amazing things you're doing at Vimeo, I want to learn a little bit more particularly about you. So if you'll indulge me, can you start by sharing a little bit more about your earliest memory? David Wrangham (01:49) Absolutely. This is one that think is maybe dear to us in compensation because it's really a reflection of inflation. But I remember as a kid, for a dollar you could get a 20 ounce soda and then three pieces of gum because the soda was 85 cents after tax and gum was five cents. man, that was just when I was a kid and sodas are like 250 now. It's wild. mean, it shows you both. ⁓ the benefits of compounding interest when it's in something like your 401k, but also just how much money you lose from inflation over time. It's wild. Kelsey Willock (02:24) And how do you think that shaped how you see security or even responsibility? David Wrangham (02:30) within sort of the compensation field. Kelsey Willock (02:33) Not necessarily. You can talk about it more broadly, but if you want to talk about it in a compensation standpoint, you absolutely can. David Wrangham (02:41) You know, I think what it really brought home to me is just that money really changes over time, right? It changes in its cultural significance and it changes in its buying power. You know, so something where the year 2000, a hundred thousand dollar job was really seen as, you know, this sort of transitory state where you were going from, you know, middle income to upper income. You move on to 2025 and in many states, $100,000 is not enough to live a comfortable life with a family, you know, according to these various sites that measure ease of life and access. And in order to achieve that stability, you know, I think people have to be very careful and conscientious about how they manage the resources. Because if you're not paying attention and you take your eye off the ball, you know, these concepts that we have around wealth and what it means to be stable, we can achieve those and still not actually achieve stability. Kelsey Willock (03:44) I love that answer because it's so right because it's also not just about where we are and where we're coming from and what we need. It's how we grew up. Right? And it's what we learned for you in your case, from very young age, you understood the power of money, as well as the D power of money as time goes on. And so it's an interesting angle to take as a total rewards leader that really also deeply understands that it's not just about the rewards we give people, it's understanding how to benefit long-term from said rewards. David Wrangham (04:16) Well, and I think sort of an example there is, you know, different forms of money actually have different value, right? So if you have, you know, if you're a sales commissioned employee who is, you know, experiencing a lot of volatility in your paycheck quarter to quarter, you may be taking home a very reasonable amount of money at the end of the year, but because that's not coming through as salary, that's not going to be counted towards your ability to repay loans. which means you're going to have a much harder time getting a mortgage. So a dollar of commission is not worth the same as a dollar of salary, certainly when it comes to things like your ability to buy a home. And then by the time you get into equity and some of the variability there, vesting terms, everything else, know, these are very different reward vehicles, even though we speak to them in the same breath and we call them all money. Kelsey Willock (05:08) How do you educate people on that difference? Or do you at all? David Wrangham (05:12) I think when it comes to thinking about things like that, that's more of an executive education piece, right? And in my experience, one of the things that I've run into a lot is for very seasoned executives, very seasoned board members, often very wealthy individuals, they can have a little bit of a hard time conceptualizing this because they are so used to maximizing the financial advantage at every step. Kelsey Willock (05:18) Mm. David Wrangham (05:36) that they don't understand that other things can actually take precedence. So for an example, I've worked with some companies where they're looking to shift some of their compensation from equity to cash. Typically, when I've seen this happen, based on employee feedback and things, most employees seem reasonably comfortable taking about $0.50 on the dollar as they shift from equity to cash. So if you were going to get a $100,000 equity award, you'd be happy with a $50,000 cash award that has all of the stability that comes with cash and none of the potential volatility. That is a concept that I think people who are used to just maximizing their income at every turn have a hard time with, right? Because for them, the risk of the volatility is so low because they have other assets, other funds that they can use to cover any gaps if... Kelsey Willock (06:01) Mm. David Wrangham (06:29) a certain asset suddenly dips in value. For employees who are still young, growing families, have a lot of obligations for their cash, they may just really, really appreciate the stability, knowing that no matter what happens, they can rely on this much money coming into their account on that date, and that allows them to plan and move through their life just a little bit more smoothly and calmly. Kelsey Willock (06:56) I love your angle of also thinking about it in terms of tenure and not just tenure, but also responsibility at the company. think it's a great perspective. So if you'll indulge me, can you tell me a little bit more about your first job and what you did with your first paycheck? David Wrangham (07:04) Yeah. Sure. My first job, I worked at ⁓ Thunder Sports in Wellesley Centre in Massachusetts. My boss was a man named Adam Adams, which is bizarre, but he claimed that both of his parents blamed the other for that decision. And ⁓ I got the job to pay for gas for my car and I spent my first paycheck on gas for my car. Kelsey Willock (07:35) I love it. That's a common answer. think about, you get your first job around the age of 16, the car ⁓ spending pattern makes just so much. David Wrangham (07:43) A little bit of freedom to actually go different places without being taken there. Kelsey Willock (07:48) Yeah. And how do you think both, you know, that early experience of understanding inflation and even buying, you know, not just your first or your first gas at the pump. How do you think that has influenced how you think about pay and benefits for your employees? David Wrangham (08:06) So I think I mentioned earlier, I grew up in a lot of different places. we, you know, I said we spent six years in Uganda, we did, but we spent it in six to 10 month chunks and we would go back and forth and we traveled a lot. And I think, you know, when it comes to money and wealth and sort of the stability that that implies, I do always try to take it from the cultural context that it exists in. Kelsey Willock (08:12) Mm-hmm. David Wrangham (08:34) You know, money means different things to different people. There's this great, the island of Yap is this island, right? And the people there made coins and the coins that they made were these like huge pieces of volcanic rock that are about six feet across and that are carved into round circles and they have a hole in the middle and they don't move, right? So, I have a coin in my yard, I spend it on buying something, it doesn't move from my yard. I just tell everyone, yeah, I gave that to Steve. And now everyone knows that Steve's coin. Right? At one point, they were moving one of these coins between two islands in the boat tank. didn't, it didn't eliminate the value of the coin. Everyone knew there was a coin at the bottom of the ocean and everyone still agreed on who it belonged to. So it still had value and continued to pass ownership. You know, and this is where this is not dissimilar to Bitcoin, right? Where it's just like that Bitcoin exists and we all just decide who owns it based on a record system and that works for everyone. But I do think this like example of these, you know, 500 pound stones being shipped from islands to island and sinking kind of really helps bring home a little bit how culturally specific this is. And so like looping back to your question, you how do you think about this? How do you process it? I think you need to understand, you know, it's clearer that benefits are very culturally specific, right? 401k is very much a United States thing because of tax law and culture. You don't have 401ks anywhere else in the world, but everywhere has salaries. So it's easier to think that a salary is the same thing everywhere. But again, it isn't right. Like there are, there are rates of pay, there are cultural ⁓ benchmarks. and where you fall versus those benchmarked influences, how people view themselves and their pay within their own cultural context. And you actually, since employees are experiencing the dollars you are giving them as a feeling of sort of progress or stability or failure to progress, whatever it might be, you need to take these things into consideration when you are allocating them. Because it may not change the value that you give them, that may come from the business. But it changes how you talk to them about it and how you understand their expectations and their reactions. Kelsey Willock (11:01) How do you stay in the know on this cultural context, especially as an organization that imagine are in multiple different places and potentially even countries? David Wrangham (11:12) Yeah, I think you have to be a really good listener in comp. You know, and I think this is true sort of throughout, right? You a lot of problems that are not fundamentally compensation based present themselves first as compensation, right? So an employee saying I need a raise because I'm being worked too hard. That could be a manager problem. That could be a staffing problem. That could be an organizational design problem. It might be a comp problem. But generally speaking, I think people are quicker to identify comp problems than they are, you know, they identify them more often than they actually exist. And so I think, you know, being in comp, being in rewards, huge amount of this is listening. And a huge amount of it is making sure that you're listening to the people on the ground. Right. Because again, perception of money changes based on your experience with it, your tenure, your wealth, your everything else. You want to be close to the ground. You don't want to be being told by country leaders. or by executives how their P1, P2 level employees are feeling. Kelsey Willock (12:18) Right. I think that is a perfect segue into talking a little bit more about what's going on in today's challenges. So where do you think that compensation and benefits break down most often today? David Wrangham (12:26) Hmm. I'm going to take a very US-centric view on this just because the globe is a big place and benefits are different everywhere. Kelsey Willock (12:38) Yeah. David Wrangham (12:41) I think that US benefits break down from their cost, and it's a healthcare cost driven issue, and it is incredibly complex and spiraling, but it actually likely doesn't get the attention that it probably should. I was at a conference a couple of years ago, speaking about how you stay in the know, conferences, keeping your network strong, talking to people you know. Director of benefits at Brooks at the time, you know stood up and everyone was talking about AI and he said look you're all talking about AI and how it's gonna help our employees pick the best health plan out of three Right or it's gonna help them decide do they contribute? 500 750 or a thousand dollars to their HSA These are going to be helpful, but they're not going to move the needle because you aren't moving the needle with those things right the issue is that depending on estimates, American health care is now something like 17 to 19 % of GDP, right? That is funded almost entirely by corporate benefit programs. I mean, there's also government, largely by corporate benefit programs, because we pay the most. If you get that number back in line with other countries, and we start to address the spiraling costs of health care, that means you're, you know, So other countries spend about 10 % of GDP on healthcare. If we cut our spend to 10%, that's a recession because that is like 10 % unemployment just there. And that's where this, you know, these benefits issues are really, really complex and really, really tied in, not just to the benefit offerings that are being offered by your company or your employer, but like fundamental with tax code, with medical policy and There's nothing that I'm seeing that's really being done at a large scale, which does mean that healthcare spend as a percent of GDP continues to tick up and it continues to make it worse for the final fit. Kelsey Willock (14:54) It's my job to keep this conversation to 20 to 30 minutes, but I have so many more questions here. So I'll only ask one follow-up. don't have to answer if you don't feel comfortable, but I'm curious what you think might be the solution to something like that. Do you think it's government intervention? Do you think it's something else? Really curious. David Wrangham (14:56) I know. All right. So I don't know. It is unlikely for that companies will continue to be able to shoulder the burden of healthcare expenses for an indefinite amount of time. Right? Current global medical inflation is give or take about 10%. Doesn't seem to be changing. Doesn't seem to be coming down. And actually when you look at countries that have traditionally had lower medical inflation, it tends to be picking up and you tend to see almost like an export of first world diseases to these countries where you're seeing, you know, spiking rates of diabetes and other, you know, heart disease, things like that. So the indication is everywhere is that it is becoming more and more of an issue. I don't think that there is an answer that lies entirely on a corporate solution. So there would need to be some sort of mix of policy and tax. and probably corporate partnership because that's how we structure a lot of these support structures in America. But it's going to take a lot. Kelsey Willock (16:28) Well, I really appreciate you sharing that with me. I know it's not an easy question to answer and also one that can be highly politicized. So thank you for sharing that. It's nice. So I'm surprised to me, I've interviewed about 250 senior HR total rewards heads of benefits leaders over the past year. And one of the things that has been, it's not shocking because it's in the discourse, but I've heard, you know, healthcare costs increasing far beyond 10%. David Wrangham (16:36) No, not at all. Kelsey Willock (16:55) year over year, particularly in this past year, 20, 30, 40 was the highest I've heard. And that's not so difficult. You can beat that. David Wrangham (17:00) Beat that. I know someone who's running HR for a consulting company in Boston who had a 72 % increase this year. Kelsey Willock (17:12) Alright, you certainly did beat that. That is extremely high. ⁓ But it's not unbelievable. But it is unsustainable. David Wrangham (17:15) Yeah. Yes. And I think that's the real issue is that thus far, right, between achieving some efficiencies with healthcare delivery and adjusting budgets at the corporate level, companies have by and large been able to pull it together. But I will just tell you, from the point of view of the person sitting in the seats having the budget discussions on an annual basis, it gets hard. I mean, it gets... for companies that are very, very interested in doing everything they can to support their employees and really, really stand by their like philosophical statements, it is still incredibly difficult to work even, you know, moderate levels of coverage into the budget. And for companies that are really pushing for those high levels, they are going to either need to sustain their levels of very, very high business performance, or when those... profit margins start to come down because they hit a rough period, the benefits are going to have to come down as well. Kelsey Willock (18:23) So we've talked a lot about health care. I want to talk a little bit more broadly about benefits programs, changes that you've enacted that you have seen help move from attracting talent to really transforming the lives of your employees. David Wrangham (18:39) Mmm. This is an interesting one. So I think generally speaking, benefits programs starting in 2020, 2021 started trying to do too much and you have like a big amount of fragmentation in the offerings. Where like going beyond your core basic three health dental vision, you started to see a lot of benefits being offered that are not expected to be participated in by most of the employee base. Right? It's just there for the people who want it. Generally speaking, I think a well-run benefits program should achieve a couple of things. One is it should provide services to the participants at a cost that is less than they would achieve on their own. Right? There's a number of voluntary benefits programs now where, you know, hey, sort of slap us onto your benefits program and we'll give your employees access to discounts through a store or something. Generally speaking, I haven't seen a lot of cases where those discounts are particularly meaningful or like more meaningful than what you can find. And from my point of view, that's effectively selling your employees data for a, you know, questionable benefit. And so if it's not genuinely providing a financial benefit, if it's not fairly easy to understand, so employees, understand what they're entitled to. And if it's not broadly beneficial, not meaning that every employee needs to actively participate in it, but that there needs to be like a, you know, a decent body of employees who really going to look for it, I don't think it's worth offering. And I think generally speaking, employees do much better with fewer benefits that are better funded and more meaningfully impact their lives. been with a smorgasbord of benefits all over the place, each of which they need to remember to use and to call at the right time and they don't. Kelsey Willock (20:45) And I imagine analysis paralysis happens. You know, it can seem great to have this massive Rolodex, but it doesn't mean you're going to flip through it. David Wrangham (20:54) Well, and that's the thing, right? Like, my wife and I were talking about this, bought our son a bike last year, and we prepaid for a tune up after a year, right? Like extra 10 bucks. There's no way we are getting that tune up. You know, like even talking about it now, we're not going to remember to get it when the time comes. Also, we both grew up and rode bikes our entire lives. And none of our bikes had tune ups when we were kids, because I don't know, do you really need that? And so it's like, Kelsey Willock (21:11) you David Wrangham (21:24) And that's sort of how I feel about benefits is you can often sort of slap a logo onto a program or something for fairly cheap. But if people aren't going to remember it's there, if it's not easy to use, if it's not at their fingertips, are you actually providing any service? And I don't know. Kelsey Willock (21:40) So for those high impact programs that you're talking about, what's the kind of impact that you're looking for? David Wrangham (21:47) I want to see a meaningful impact that actually changes people's behavior, whether they're sort of conscious of it or not, I'll get to that. And one that, look, fundamentally benefit programs are provided to enable employees to do their jobs better, right? Like we provide healthcare to your family in many cases, because we don't want you worrying about your family's healthcare because we know how distracting that can be. And so please come work for us, we will help pay for that for you. I think 401k design is in many cases where you have the most option to achieve these kinds of things. Things like automatic enrollment to ensure that all of your employees are saving, annual increases to people's enrollment because you know that your employee population isn't saving enough and you also know that if you tell them to save more that they won't and you also know that all of the studies show that if you just pick people up, you know, a percent a year, that they, it doesn't bother them. They do like it in the end and they save more for retirement. So, I mean, if there's one thing that I think all rewards leaders should do just to help all of us over the next 50, 60, 75 years, do what you can to increase people's retirement savings because that is another crisis other than the healthcare one. that seems destined to come to our country. Kelsey Willock (23:09) and already is happening, especially given. ⁓ What compensation or benefits trends do you think will shape the employee experience most in the next year? David Wrangham (23:10) And already is happening. There we go. In the next year, I mean, it's got to be the job market, I would think. And just the sort of the paralysis that's coming from the wave of applications fueled by AI, that's it seems. I went to college with a ⁓ Business Insider reporter, Aki Ito. She writes some really good articles on this. So I just, for anyone who's interested, I highly recommend. Kelsey Willock (23:45) The last questions I'm going to ask you is how people can get in touch with you at the end. So I'm sure people will be reaching out to get connected to those articles. David Wrangham (23:53) Sure, reach out to me on LinkedIn. My personal email is david.ragnam at Gmail. You're welcome to reach out to me there, Kelsey Willock (24:02) Awesome, thank you so much. So you mentioned AI. One of the things I'm really curious on, and we can take this more broadly, are specific tools that you're using to help you pretty much measure and better understand impact, whether it has to do with pay equity, well-being, even health care. What are some tools that you think our listeners should be aware of that you're specifically using and you found value in? David Wrangham (24:05) Hmm. Mm-hmm. So I haven't had a lot of opportunity to work with lot of AI tools yet. I've used some, so we have a, you we've got some corporate tools that we have access to, but I think we've had a lot of changes in HR and with the recent acquisition, this just hasn't been a priority ⁓ of late. You know, high level, my understanding of the tools that are available is a lot of the benefit comes from benchmarking or like generation of job descriptions. These seem to be the two areas that like there really is a meaningful benefit. The job description seems great. Everyone should just make sure to review them and make sure that they actually align to what the job will be and your company's culture. The benchmarking one, I think is an interesting one. know, Matt Shulman, who's CEO of PAVE, puts out some really great reviews and articles where he's digging into these things. I think what he found is that, you know, All of the major tools that he used produced benchmark numbers for common roles that were very reasonable. The issue is that you can't explain them. Right? And that's where, you know, we talked a little bit earlier about is compensation a math problem? Is it a psychological problem? Like, what are we actually doing here? It seems very clear that AI produces a number that is reasonable. If you have a onboarding team, recruiting team that can also convince your employees that that is reasonable, then that's fine. If your employees don't trust it and you can't explain it because you don't actually know why those numbers are the specific numbers. And generally speaking, I don't believe there are AI tools that will actually, you know, break out the formula for you and show you exactly what they did. then you've got a problem. And then, you know, there's a question, I think, about are the efficiencies worth it within your cultural context. Kelsey Willock (26:22) Because unless you feed it that data, it is taking data from the cultural context of everyone, not just your specific workforce. It's such a good reminder that the reliance on AI tools without the appropriate information bases and context can be potentially even doing more harm than good because it can put you off the right track. David Wrangham (26:26) ⁓ There you go. Well, and that your comp program can be as strong as you want it to be, but if you can't convince employees it's strong, doesn't matter. Kelsey Willock (26:51) Right. David Wrangham (26:51) You know, if your commission plan is so complex that no one has any concept of how much money they're going to make, even if it's the best commission plan in the world in the end, no one's going to work for you. Kelsey Willock (27:03) Absolutely. My last question for you is what's one 30 day experiment our listeners can try to specifically boost financial well-being at the company or even engagement? I'm particularly excited about your thoughts on financial well-being though as you've mentioned lots about retirement and beyond. David Wrangham (27:26) So I haven't done this, but I've wanted to, for some time at some point. One of the things that comes back to me very clearly a few times a year is that employees often don't understand the rewards programs that they're participating in. You can give open enrollment presentations, you can share documents, but a lot of people out of sight, out of mind, they're not engaging at this time, and so they engage when they have questions. And that's when you learn how confused they are. I think you could do a lot of good with almost like a daily quiz. You know, just like asking people, Hey, like what's our vesting schedule? You know, multiple choice, just pick, just tell us what it is. You know, how, how often will your money double if it's invested in an index fund? Cause this is important for a 401k. You know, what is an appropriate number for you to retire with based on your salary? Like what multiple of your salary should you have? We can say all the right things and we can host the webinars and we can host the office hours. People can show up and one or two people can walk away with something. But I think if you really want to know what people think and feel and understand, it's actually on you as a team to do the outreach. And I think you'll be surprised. I think there are a lot of gaps. Kelsey Willock (28:53) And what really it boils down to is how do you make something that can really feel dry, be more engaging and fun? And gamification we know is often so powerful as it pertains to behavior change. And so I absolutely love that perspective and I'd love to even try it with my team. David Wrangham (29:00) Yeah. Give it a shot. I bet you got some confusion about your 401k in there. Kelsey Willock (29:19) of course. Well, David, it's just been such a pleasure speaking with you. Some of the basis of information that I took away most from our conversation was your emphasis on quality over quantity through benefits, how small changes such as automating retirement increases can really impact folks. even if they don't know it, how health care is right for disruption, especially as it's on the backbone of the employer market and we are at such a critical time of need. So thank you so much for this. And again, for anyone listening, you can connect with David on LinkedIn directly. It's such a pleasure to have you. Thank you so much for your time. David Wrangham (30:01) Thanks so much, Kelsey. It's been a pleasure.