Latest / Beyond the Paycheck / Michael Downey, Director, Total Rewards at DataRobot
Transcript
- Kelsey Willock (00:42) Welcome Michael Downey, Director of Total Rewards at DataRobot. We are so beyond excited to have you today. To kick us off, I would love for you to introduce yourself to our audience and particularly have you share a bit about your career and background, where you're calling in from, and your current role today. Michael Downey (00:59) Sure, thanks. Yeah, thanks so much for having me. Yeah, my name is Michael Downey. I'm the Director of Total Rewards at DataRobot. So I manage the Comp and Benefits in Immigration. We're in about 14, 15 countries. And my background is mostly compensation. So I started actually as a teacher. taught ⁓ math and phys ed for a few years, but I've been in compensation for over 15 years now. So that was kind of... where I kind of grew up. I'm in Calgary in Canada. So I worked in oil and gas for the first part of my career. And I've been a data robot for coming up on five years here in the spring. Kelsey Willock (01:37) I'm definitely going ask you some more questions about your early part of your career, but we'll get to that in a bit. So before diving into that and all the amazing work that you're doing, I'd love to share with our audience a little bit more about you. And can you share with me your earliest money memory? Michael Downey (01:55) Yeah. So I actually have a, I have a, I have a money memory from when I was about, I think five or six. And I went to the store, like a convenience store by my house and we were buying, I was buying five cent candies. And I remember going up to the till and I put one of the five cent candies on it. handed the guy a quarter and he kind of just handed me back 20 cents. And then I put another five cent candy on and he was, he was looking at me he, cause he could see I was holding more and he's like, how many do you have? And I said, five. He said, just put them all on the counter. And I said, well, Kelsey Willock (02:02) Mm. Michael Downey (02:24) But if I put all five, the sales tax starts to round up at 25 cents. And so it would be 27 cents and I only have 25. And so he just said, just put them all on the counter and let me pay with the quarter. And that was that. Kelsey Willock (02:39) Where do you think that kind of mindset came from? Having that kind of a realization as a five-year-old is something that I don't think everyone shares, super interesting. Michael Downey (02:50) Yeah, I don't know. think it was, I mean, I hope it wasn't because I was often going to buy candy at the store, but I think, I think it's that I would have been, I would have noticed it once and I would have been like, well, that's weird. And it was like, then kind of, Hey, there's something bigger going on here. Like there's more than meets the eye maybe at, with this money thing. Kelsey Willock (03:09) Yeah, and how do you think an experience like that shaped how you see security and even responsibility? Michael Downey (03:17) Yeah. mean, cause even so I had a, I had a paper route too, from an early age. And I think that those, even that idea of like, this is something that you have to do. You have to do this every day. It's not like, maybe you do it. Maybe you don't. it's like, no, the newspapers get delivered and they get dropped off and you got to take them out every day. it doesn't matter if it's raining, doesn't matter if it's whatever. And so I think it kind of, there was very early and I'm positive it came from my parents, but just an idea of, yeah, there's, there's responsibilities that come with this and now you get money. ⁓ is a benefit to this, but you need to earn it. Kelsey Willock (03:50) Great. So was that paper route, was that your first job? Tell me a little bit more about your first job and what you did with your first paycheck. Michael Downey (03:54) That was my first job. Yep. Yep. My first paycheck would have been pretty minimal. think it was kind of a paper that got passed down through a few siblings. But ⁓ it was mostly just saving. Like this was back when you would take your money to the bank and fill out a deposit slip and you'd have to kind of, it was a whole thing. It wasn't just like today where you're just tapping and whatever. And I remember we saved up and we bought a Nintendo. Me and my brother, we both pitched in and bought a Nintendo one. Kelsey Willock (04:03) Thank Michael Downey (04:26) Christmas or something like that. So I think even from a pretty early age, was like, you can, this stuff can add up. Like if you kind of play your cards right, you can get some, big ticket items. Kelsey Willock (04:36) but you still always have to remember the sales tax. Can you tell me about a recent embarrassing purchase that you've made? Michael Downey (04:39) That's right, 100%. I mean, most of my most of my recent embarrassing purchases are probably just toys or apps for my kids. you know, I was thinking about it if if I go back a bit further, when I was in university, we're just going Lethbridge and I had very little money as a student, but I was like, fine with that. That was kind of the idea. And I remember going to the grocery store and there was a huge can of crushed tomatoes for 98 cents. And I was like, this is perfect because the pasta sauce was like four or $5. And I was like, I just don't have it. So I'll just get a whole spaghetti with crushed tomatoes, which did not work out as I thought it was going to work out. But I remember that my roommate came home and he had got a student loan and he came home with a PlayStation and that was his first purchase with this student loan. And I remember thinking like, there's no way that this is, this is how this is supposed to work. I was thinking like, this is, this is probably not going to work out well for him in the end here. Kelsey Willock (05:43) Yeah, what a dichotomy, right? One person is trying to save a couple dollars and the other is using it to spend because they probably saw a couple hundred dollars in excess in their account. I imagine there were different money stories in both households. How do you think your money story, in particular your story from childhood, has influenced how you think about pay and benefits? Michael Downey (05:46) Yeah. I Yeah, I think that, again, I always, I think that there was just always a natural curiosity about there's, there's more to all of this. And I was reminded of like, ⁓ I worked with, I worked at a place called Swish LA, which is big in Canada. And it's like, Cracker Barrel meets Kenny Rogers Roasters, if you want to give an American version, it's something like that. So, but there was a ⁓ girl I worked with and she was a manager and she, She told me that she turned down a raise because she didn't want to get moved into the next tax bracket. And even then I didn't have a full understanding of tax brackets, but I was like, something's missing. Like this doesn't kind of play out. And I used to give presentations to employees for years. And I would give that as an example. One, I would say never turn down a raise. But two, I just think as there's a bigger picture there of like, there are elements to your comp that you're not understanding. Um, I remember going to, we would talk to, there would be field workers again, working oil and gas and field workers. heard stories about them leaving for 50 cents more an hour on the raise, but we had a 15 % pension or leaving like a gold plated benefit package again, for kind of this near term and not even, not even that it was like, Oh, you're taking money now versus money later. It was that I think that there's just this misunderstanding of the value of these comp and benefit plans. We saw it all the time with people resigning right before big RSU or stock option vesting dates. There was like, if you just waited 10 more days, you would have got $5,000. Like, you know, that there was, there was just this, again, just a basic understanding and almost just like, this is too complicated. So I'm just going to not even ask the question about it. Kelsey Willock (07:57) And how do you think being a teacher has allowed you to improve that understanding or misunderstanding of pay and compensation benefits? Michael Downey (08:05) Yeah. And so, so it's a great question. And I think what I'm seeing now, even more than ever where we have, again, there's, there's this misunderstanding of the total rewards, I think in general, but now we have this, this huge overlap coming with pay transparency and the, the, the, big part, okay. Of course there's salary ranges and Hey, you know, the salary ranges posted and things like that. That's what kind of people first think of when they think of pay transparency. But I think of the data. Kelsey Willock (08:17) Mm. Michael Downey (08:35) that people are able to find online. There's huge amounts of data that people can find online, whether it's from a website like levels.fyi, where you can kind of go in and see those different things, but even just asking chatGPT or asking Google Gemini. was speaking at a conference in September in Toronto, and I said, what does an accounting manager make in Toronto? It was like a room full of comps. professionals. And I said, I'm going to start naming numbers and you kind of raise your hand when you think I've hit the number of what does the county manager make in Toronto. So it's 60, 70, 80, 90, know, when hands are going up. And I was saying, no one asked me what company is this for? Because if this is for an airline that maybe the pay is low, but you're going to get all these travel perks or this is a bank, but maybe the pay is moderately competitive, but you're going to get a huge pension. Like that there's these other pros and cons that they weren't, uh, even Wayne and even what is an accounting manager? Because if you're, if you're, ⁓ you work at PWC and you manage a team of accountants, so you manage eight accounts, you're the accounting manager. But if you work at a local furniture store and there's 25 employees and you're the accountant, you're also the accounting manager. But both of those accounting managers are Googling the same thing into ChatGBT, what's an accounting manager making Toronto? They're getting the same results. They're going to their boss and saying, This is what Chachi BT says the County Manager should make. But again, I think that there's just, it's even more information than ever without the understanding of what all goes into build some of those packages. Kelsey Willock (10:11) It's so fascinating because when you really think about it, it's such a personal experience too. It's not just the size of the company, it's how many hours they expect you to work and the level of your experiences. Kind of leads me to my next question, which is where do you see compensation benefits and pay break down most often today? Do you think it is pay equity? Is it pay transparency? Is it understanding your total rewards or is it something else? Michael Downey (10:40) I think it is that understanding. I almost think that this having more data is almost causing more, it's causing more need for leaders to be trained on how to speak to this and employees to just have a basic understanding of here's your whole comp package. Here's how this works. Here's your benefit package. Here's how this works. I think that that's where it's breaking down and there's just a huge gap and it's not gonna be a nice to have. It's gonna be, you have to. because you're posting a salary range or your employees can Google all this information now. I think that leaders are past that point where they can maybe get away with not talking about it. They're gonna have to be trained on how to speak to it. Kelsey Willock (11:21) How do you think, how do you see those breakdowns affecting who feels empowered versus stuck at work? Michael Downey (11:28) It's huge levels of mistrust. That's kind of the big thing is you feel, because again, employees outside of comp, again, I've been in comp. I understand that I kind of live in a bubble where I get to see all this data, but employees don't know if they're being paid competitively. And their default would be, I'm not, because their default would be thinking, I have a friend in so-and-so and they're paid more. So I should get paid more. And I'm not knocking for boys or anything, but that's Kelsey Willock (11:31) Mm. Michael Downey (11:57) I think it's just kind of a natural thing to think my company's trying to pay me as little as possible. Whereas people in comp know that is absolutely not the case. Like, no, we want you to be paid competitively and things like that. I think that that's a real, real break down there. Kelsey Willock (12:12) You had mentioned that it's incredibly important for leaders to really become better conduits of education, specifically around understanding total compensation. Can you share a change or an enactment of leadership and action that has moved from attracting talent to transforming lives? Michael Downey (12:33) Yeah. So I think that the, the, the biggest example, the best example that I've seen is pain for performance for real. Because most, most people, when they, again, I've talked, spoken to managers and I've seen it enacted for years. You had an average year. Here's a 3 % raise. You had an outstanding year. Here's a 4 % raise. It's not really paying for performance. It's like. tweaking for performance. So you have two people sitting side by side and this person's absolutely crushing it and like going above and beyond taking extra work and doing all these things, but they're not actually getting paid for performance. There's just like a level of expectation because it's easier for the leader. It's not a hard conversation. So it's easy to just kind of do that. We actually got rid of our quarterly bonuses because there was just no differentiation. had employees that They were all just kind of receiving the same bonus. Again, we weren't really paying for performance, but what I've seen done really well is going to one employee, having that difficult conversation to say, look, you're paid well, we're happy with the work you're doing, but you're not getting an increase this year. And then taking that and going to the other employee and saying, you had an outstanding year, here's a 9 % raise. And I think that that's where it gets to be transformative and where you can really start to make an impact and employees. especially those top performers are really feeling that differentiation. Kelsey Willock (14:01) And can you share with me a little bit about the measurable impact you saw from that change, whether it was, you know, retention, higher levels of engagement, the company, even equity. ⁓ Michael Downey (14:13) Yeah. And I think that, I think we saw that through top talent, lowered top talent turnover. And you see it and you see higher engagement too, again, because they're saying one I'm, being seen, I'm being recognized. They see the extra work I'm doing. We're there, we're promoting more often and we're really highlighting those people for leaders to say. Just keep a real close eye on this subset, make sure that you're really impacting these people and addressing these people. And I think that we've really seen it through our engagement and lack of attrition. Kelsey Willock (14:45) And are you implementing that kind of bonus strategy across business units where often we see specifically bonus directors is with sales folks? Are you doing that with specifically those types of marketing sales teams or are going beyond that? Michael Downey (15:01) No, so this is mostly in the R &D and G &A side of things where the sales and the commission were, for now, it's still a more traditional commission-based structure. Kelsey Willock (15:13) What compensation and benefits trends do you think are going to shape the employee experience most over the next year? Michael Downey (15:20) And this might not be shocking based on what I've seen so far, but I think that paid transparency is it again, it feels like people think like, isn't that over? We're again, we're posting the salary ranges and it's like, it's just, it's going to be more and more. But I think that the it's misunderstood as a negative businesses are kind of shying away from while we'll post the ranges when we absolutely have to. ⁓ there's all kinds of data around. find better candidates faster and things like that on the recruiting side. but on an internal candidate side, it builds incredible amounts of trust because you're showing employees, this is your range, this is where you're paid, this is why you're paid. You can have these great career growth conversations to say, know, we have you paid here, here's why, this is the requirements of the next level, you're not quite there yet, but these are the things that you would need. And this is a kind of a basic timeline that we would expect to get you there. And I think one that's maybe the most forgotten. ⁓ is telling employees that they're paid above market. Because employees, again, they don't know what the range is. And again, their default is, I'm not being paid what I should be being paid. And so if you're really able to show and prove to employees, this is our market range and we have you paid at the top end and we're happy to do it because we're really happy with your work. Kelsey Willock (16:42) One of the things I'm hearing from you is that it's almost as though you're treating your employees like you're treating a customer. Like so often in talking to customers that we let them know we're giving them so much value for a lower cost. It's a really traditional strategy to market. In this lens, we're... We're similarly thinking about our employees as though they're a customer of the company. We're giving them enhanced value. And I really love the way you're thinking about that. Can you share with me a little bit about how you have leadership adopt that mindset and really make sure that they understand the need to keep pay fair and equitable? Michael Downey (17:22) Yeah. And so it's, it's a great question. And I think that, you know, when it comes to, when it comes to equity, again, leaders have a really tough time not being equitable. That's actually, I think that that is actually kind of misunderstood. but it's also, it, they have a difficult time kind of explaining why or understanding why would I want to be transparent? Why would I want this kind of thing? we have, There's two great stats that I found. This was from a pay scale study from a couple of years ago, but that employees are 50 % more likely to leave a company if they believe that they're paid below market, even if they aren't. And 42 % of employees who are actually paid above market believe that they're paid below market. So just by leaders, again, maybe not wanting to have that conversation, not wanting to be transparent. it's actually to their detriment because again, the employee default is this position of, think I'm paid below market. So I try to kind of give them this mindset of if an employee is paid above market but doesn't know it, are they really paid above market? Because you're spending hundreds of thousands or millions of dollars to pay all these employees above market and they're not getting credit for it. It's just crazy. Kelsey Willock (18:40) It's so important though to share the data because without the data I think that it's easy for our minds to race to think, if I show my cards maybe this person will want more. ⁓ But in reality, reality is that retention is incredibly expensive. Turnover is incredibly expensive. So just sharing the information like you shared, I can't do the quick math on my head, but it sounds like that's actually really affecting people if we just withhold that information from them. People are smart. They can do the math and why not be more forthcoming with it. Michael Downey (19:15) Exactly. And like I said, with chat, GPT and the Google Gemini and all that, they're, finding that information, even if you're not telling it, they're going to fill the gap and they might fill it with data that you're saying, I don't know where that came from, but that's wrong. So it's way better just to get, get ahead of it. Kelsey Willock (19:31) So you've mentioned a few AI tools, whether it's ChatGPT, Gemini. What tools are you specifically using or data sets to help measure and improve pay equity or even well-being? Michael Downey (19:44) Yeah, I mean, so we do use a lot of AI tools. ⁓ Again, there's, and it's just, we're still in the infancy of AI. Like it's just the tip of the iceberg. know, we see with, we use Workday and so Workday is introducing AI tools to look at the data better and helping managers. Again, it's kind of feeding managers that data, making it, this is that much easier. I'm handing it to you on a platter so that you can make these decisions. One of the tools that we found most beneficial is like, retro tech as benchmarking. It's like, not, not, not, and again, you can just do this in a spreadsheet or Google sheet, whatever, but it sets the foundation for all of your comp decisions. Um, and so, so I have like a, I'll give you like the 10 second version of, what, what I've, we've do every six months here as a company, starting with the executives. We meet with them and say, at, first of all, there's no expectations change coming out of these conversations. I'm not going to ask you to change a title or change a level or change a pay or anything like that. We're just trying to confirm our current benchmarks for all these employees. And then we say, let's have a look at your directors. Here's all your directors. Who's the anchor? Who's the kind of, this is for sure. This person's definitely a director out of all these directors. They're the kind of middle of road. They're a director. And who's the outliers? Cause the outliers are the ones that maybe they're a senior director or maybe they're a senior manager. Like maybe it's a little bump up, bump them down. So it's anchors and outliers that you're doing for each level. And then saying, looking at all these people and is it, Hey, this person should be higher. Let's promote them. Great. Let's wait for the formal process. do a promotion. Hey, this person should be lower, but they've been here for 20 years. We're not changing it now. Fine. That's a legacy one though, because what I don't want is a manager on another team saying, Hey, if Jerry's a director, then my person's a director and we go, Jerry's a legacy, don't worry about Jerry. Or is it just wrong? We go, how did this person ever get mapped to a director? They should be this level. You have this great side benefit of having these talent conversations of saying, well, let's talk about that. Cause again, it's the role that you're benchmarking, but the performance and all that kind of things come up. So I find that having those conversations, having that benchmarking, because that's your foundation for all of your comp. You can't talk to employees without it. You can't be transparent without it. You can't be have be equitable without it. So it's just going and actually having these conversations with leaders to say, tell me about this group of people, tell me about this group of people. I think it's just, it's something that every company can do. It's free. It's not groundbreaking tech, but it's like this is, you have to do that before you do any of more exciting stuff. Kelsey Willock (22:27) You've also created my new favorite word, retro tech. Well, thank you for sharing that with me. Can you leave our listeners with one final thought around a 30 day experiment that they could try to boost either financial well-being for themselves or even engagement? Michael Downey (22:30) You Yeah, mean, so I would, for your engagement, let's focus on the engagement. I think it would be a really interesting exercise to, if you're in comp, to go in and just see who's paid above market and pick one of those leaders, talk to those leaders and say, have you ever had a conversation with these employees to tell them that they're paid above market? Do they know where they're paid within the market? And the answer is almost certainly gonna be no. And then you can talk to them about, why haven't you? What's the kind of hesitation? And then trying to figure out, how can we communicate to these employees that they're paid above market, but it's intentional and we're happy to do it and that it can be a really positive thing. Kelsey Willock (23:33) I think it's such a tangible example that people can take away because I certainly learned from you that I think it was 44 % of people that are overpaid don't believe that they are and that's absolutely sticking with me. Something I'll even take away to review it in conversation with my company's employees. So thank you for sharing that. It's been a really wonderful conversation, Michael. Thank you so much for joining us. As a recap, some of the things that I learned from you, particularly around your earliest money memory and how being a teacher has led to a career with such a focus on better educating your employees rather than keeping them in the dark has been really inspiring. Also being more discerning around bonuses to really motivate the highest performers at the company. It can seem simple, but something that we can so often forget to do because it's quote unquote easier, like you had mentioned. Remember to tell folks that are paid above market that they are because it can be incredibly costly not to. You also shared some brilliant insights around how to really empower managers with data so they can better focus on pay equity. And then finally, thank you so much for sharing a bit more about retro tech. I think we can so often be caught up in what are all the new tools that we forget to step back and actually just have conversations with the folks that have some of the most valuable insights at the company. So can you please ⁓ leave our listeners with where they can connect with you after this conversation? Michael Downey (24:59) Yeah. mean, LinkedIn is probably the best. it's I'm Michael Downey at DataRobot. That's probably the easiest way to find me. Kelsey Willock (25:07) Wonderful. Well, I hope you have a wonderful rest of your day. I know it's the holiday season, so it's very, very busy, but I know that our listeners will deeply appreciate this conversation. Hope you have a great one. Michael Downey (25:17) Yeah, thank you so much.