Dino Zincarini – ADP Pro Series 2022: Compensation Strategies in a Turbulent World

Connect with Dino Zincarini:

Connect with Dwight:

• 
• dwight.brown@salary.com

Connect with David:

• 
• 
• david.turetsky@salary.com

Podcast Manager, Karissa Harris:

• HRDataLabs@salary.com

Production by Affogato Media

Resources:

• Compensation Consulting Services
• HR Data Labs Season 4 Episode 2
• HR Data Labs Season 3 Episode 25

• “In particular, what's been interesting to me, looking for bigger trends, has been that the entire comp strategy is starting to be questioned. And that's a much bigger question that people haven't really been prepared to ask.”
• “HR has opportunities everywhere there's challenges. These are also exciting opportunities for us. Data cleansing is an opportunity to elevate the value of the information we curate. Compensation disruption is an opportunity to elevate our value in leading a change in an area that would otherwise hurt a company. These are all opportunities to really show why we're here and the value we provide.”

Announcer: 0:02

Here's an experiment for you. Take passionate experts in human resource technology. Invite cross industry experts from inside and outside HR. Mix in what's happening in people analytics today. Give them the technology to connect, hit record for their discussions into a beaker. Mix thoroughly. And voila, you get the HR Data Labs podcast, where we explore the impact of data and analytics to your business. We may get passionate and even irreverent, that count on each episode challenging and enhancing your understanding of the way people data can be used to solve real world problems. Now, here's your host, David Turetsky.

David Turetsky: 0:46

Hello, and welcome to the HR Data Labs podcast. I'm your host, David Turetsky. Today we're going to do something special. We're on the road at the ADP pro Summit. Here in San Francisco, California. I have with me my friend and colleague Dino Zincarini. Dino, how are you?

Dino Zincarini: 1:00

Hello, David.

David Turetsky: 1:01

You guys might remember Dino. Dino has been on the program many times. We're not going to go into his background other than to say, Dino is a consultant with Salary.com.

Dino Zincarini: 1:09

I am.

David Turetsky: 1:11

And we are very proud to have you.

Dino Zincarini: 1:13

Aww, that's very kind.

David Turetsky: 1:14

But we are going to put you on the spot. Dino, what is one thing that no one knows about Dino Zincarini?

Dino Zincarini: 1:20

I've already talked about my barf bag collection.

David Turetsky: 1:22

You have talked about it many times.

Dino Zincarini: 1:23

Now that we've said the thing we can go on to what this whole conversation supposed to be about.

David Turetsky: 1:30

So the topic we want to talk about today is compensation trends and kind of the tales from client assignments. And Dino is gonna give us a little bit of insight from what he's seen talking to clients in 2022.

Dino Zincarini: 1:50

Yeah, it's been a really interesting year so far, obviously, for a lot of reasons. But in the comp world, what I think used to be a pretty predictable space is starting to get a little chaotic. And that's throwing people for a loop because it's not something that was expected. That's happening a lot through the pandemic. But this wasn't one of those areas, I think that people went into this crisis thinking would have to be questioned. So we're seeing a lot of things. Obviously, there's, within markets, labor markets are being disrupted. So hey, you know, we're having a lot of turnover in a particular job. Does that mean we're out of sync with the market? That's a pretty traditional problem and question to ask. The volume of it has increased. So that's one thing we've seen. But in particular, what's been interesting to me looking for bigger trends has been that the entire comp strategy is starting to be questioned. And that's a much bigger question that people haven't really been prepared to ask.

David Turetsky: 2:52

And I think it's actually coming from to two different sides. One is that a lot of organizations haven't reviewed their comp strategy in many years, especially given that they had so much work to do during the pandemic.

Dino Zincarini: 3:02

Right, they took it for granted. It's just there let it keep working.

David Turetsky: 3:05

But there's also been so much change in how people work, right?

Dino Zincarini: 3:09

Yep, absolutely. And the remote work, you know, at the beginning of the pandemic, it was just let everybody worked from home. Fine, right? The big focus on that really, was IT and management practices. Can they actually log in from home? And then how do managers keep that connection with people? And how do we keep the culture alive? That was the focus at the beginning. Probably because everybody thought, sooner or later, they're just gonna come back to the office. Well, you know, it's later and yes, people are returning to the office. But there's also a fundamental shift now. A lot of people prefer working from home. And many companies are pivoting to offering that as a permanent benefit, as a way to attract and retain employees. You're seeing now I think I was just reading about Apple and other organizations that are struggling to get people back into the office.

David Turetsky: 3:54

Well some have mandated it and had been harshly rebuked and had to reverse.

Dino Zincarini: 4:00

Yes! And so suddenly, there's a lot of change happening here. And the problem with physical location is most comp strategies are tied to where you're physically working. So now, what happens? If we aren't tied to a specific office and we can work from anywhere? Well, wait a minute, what's the basis of our pay? If it's not geographic, what is it? And that's causing the disruption to the comp

David Turetsky: 4:26

And while it doesn't change the fact that strategies. when you're recruiting in certain markets, you're going to have to either pay premiums or discounts based on those specific markets when you recruit. And I think the issue you're bringing up though, is employees that are currently at an employer that went and got hired at a location but now we're working remotely, that's the issue, right?

Dino Zincarini: 4:49

If you have a location based pay strategy, which pretty much everybody does, and then you break the requirement to be in a specific location, and people are free to go anywhere they want. Well, wait a minute, are you still going to pay a San Francisco premium for your programmer when they've moved to Des Moines, Iowa? What happens? What happens when people start moving around what happens when you embrace remote work, and truly let people locate wherever they choose? What's the basis of the the pay? And the the trickiest case, of course, is somebody who has a relatively high pay because they were working in an expensive market, like San Francisco or New York, and then moved to a cheaper market, do you cut their pay?

David Turetsky: 5:31

Well, and I think what we've talked about specifically is that there needs to be policy in place.

Dino Zincarini: 5:36

Absolutely.

David Turetsky: 5:37

And currently, while most of the policy in place that deals with that is based on a company relocation of the employee, when the employee self relocates, and says, I want to move because I want to go to a lower cost area, because you don't need me in the office anymore. What happens without having that policy in place? It's kind of a gray area, right?

Dino Zincarini: 5:57

It's a gray area, and it creates a lot of equity problems. If this is something that each manager is negotiating or arbitrating, independently, yeah, why does one employee get treated differently than another? You're setting yourself up for a world of hurt if as an organization you aen't thinking about this. So this is requiring us to rethink comp strategy at the very foundational level. And I don't think a lot of people have thought of it that way. They're still reacting to this particular disruption and not getting in front of it.

David Turetsky: 6:24

And so one of the practical problems that they have is they need to answer this today. They there needs to be something today that they need to work on, so that they can answer that issue today for managers making those decisions, making those one offs, but also to step back and talk about what is our culture? How do we support this? And make sure it comes from a leadership level, Top Down, Right?

Dino Zincarini: 6:46

Absolutely. And how do I turn this into a foundational thing for my company like compensation really is maybe even an advantage visa vie my competitors or others in the industry, it's an opportunity for those of us who work in comp, to really shine and show the value of what we're doing in an area that's kind of been taken for granted, I think for a long time.

David Turetsky: 7:06

And if they don't, it becomes an area of conflict. And as you say, it could open themselves up for liability, potentially, if different deals are being made one off, and then people find out about it. And then audits get made on why did you make decisions on this basis. So they really do need to look at this today.

Dino Zincarini: 7:24

Absolutely. And the reality is, other companies are doing it. So standing still is not an option. I don't know if you've seen recently the message coming out of Airbnb, but their CEO very publicly came out and embraced remote work, and said, Alright, we're done, we're done with having everybody be in one office, you can be anywhere in the world you want. But the comp element of that, they also thought about, and he came out and said, we're only going to have one salary per country, we are benchmarking to an average for the country, I think in the United States, it's based on where they currently are, and then everyone is going to just be paid on that. And it's your choice as an employee where you locate and where your cost of living can be balanced with that pay.

David Turetsky: 8:05

And I think what's beautiful about the Airbnb example is that it fits in line with not only their corporate culture, but with their outward marketing culture. And so they are basically saying, Look, you shouldn't tie yourself down to one location, go be go experience the world. And if they're now their corporate culture now says, look, go experience the world still work with us, we want you here we value you. We're just going to be changing things a little bit. Obviously, they're going to be some people who get off the bus. And they're going to be more people who look at it and go, Hey, that's a corporate culture, I can align around. And I want to be on that bus. I think well, one other thing that I would love to get your feedback on is pay transparency when it comes to this, that now that all of these structures and all these policies are now coming into the fore? How does that change a corporate culture where they may have held a lot of those things back as kind of company secrets and not publishing structures and market pricing. Now, with this kind of move, how does it change their ability to communicate their competition policies and practices?

Dino Zincarini: 9:06

It's a bold move. But I think it also solves more than one problem. It solves this issue of geographic independence. But it also solves the problem of pay equity in some way, a lot of the secrecy is what drives some of the equity problems we have in compensation. So by embracing a really simple compensation strategy based on one price for labor across the country, it means they can be far more transparent about this as well. Here's what we pay for a programmer, full stop. And that's it. There's no doesn't mean everybody's paid the same. There's going to be a salary band within that area, right, but at least you know what you're getting. And that is going to go a long way to creating transparency and trust in the organization when they're recruiting and when they're trying to retain their staff.

David Turetsky: 9:52

And I think I love your comment about pay equity because because there's that understanding, everybody knows what the criteria is. Everybody understands what the bands are. And everybody can judge for themselves and raise their hand and go, Hey, listen, I don't think I'm being paid fairly here. Can we talk about this? It enables and opens the conversation. Whereas before, people were very secretive, they were worried about bringing it up, they didn't want to fetch or complain about it. But now they don't have to. Now they don't have to stay silent, they can be open as they want, as much as they want to.

Dino Zincarini: 10:25

Yes, on a topic that used to be taboo.

David Turetsky: 10:27

Totally taboo.

Dino Zincarini: 10:28

And you know, look, I'm not trying to glorify Airbnbs particular example that works for them, they're obviously in the business of encouraging people to move around anywhere they want. That's literally how they make their money. So it kind of makes sense that their comp strategy aligns with their actual business, that's not going to work for everybody. We're not saying that that's the case. But it does require you to dust off this comp strategy that was probably fixed in place a long time ago, in a completely different reality. And question it. Is it an issue of setting that expectation that now where are you locate, and as a result, your cost of living is your choice, not your employer dictating of a salary based on the cost of living and where their headquarters are? Sure, then let's keep going with that what works for you. We have to come up with something custom that aligns with your culture like Airbnb did, that will also work for you at a practical sense with your business.

David Turetsky: 11:18

And I think where you're also getting to is, do it now. Realign today. There is no ability to wait on this to, to have meeting after meeting and contemplate it, you have to have your leadership team aligned to it, make sure they're bought into it. But get going.

Dino Zincarini: 11:37

Absolutely. You don't want to come out with a public statement saying we are doing x and then having to backtrack to why. Because your employees aren't on board.

David Turetsky: 11:45

And in some states, they can't wait. They have to be publishing their ranges when they're recruiting. So it's not like they can wait, there is transparency that's being required now of them. So it's not like they have a choice. They literally have to do a lot of these things anyways.

Dino Zincarini: 12:03

Good point. So why not get started?

David Turetsky: 12:04

Exactly.

Announcer: 12:07

Like what you hear so far, make sure you never miss a show by clicking subscribe. This podcast is made possible by Salary.com. Now back to the show.

David Turetsky: 12:18

Let's talk about practical examples of things that they can start with Dino. I mean, we just talked about the job postings. But what would you think of is the first step in this process?

Dino Zincarini: 12:27

I think the first step would be to look at that comp strategy. I think a lot of companies really don't even know what it is. It's the sort of thing that gets dusted off once a year when you have to do a review. But really engage your HR department. And I'm talking to executives here and leaders in the company to understand what is what is the basis of it? How do we fundamentally value in terms of money, all the different jobs that we do, make sure you understand it. Because if it is based on pinning everything to one of your three offices in the country, then okay, you now you know where the problem is, especially compared to where your staff are located. So getting some basic metrics in place as well, knowing where are your staff? How has that been changing over the last two years of this pandemic, to understand the scope of the problem, and whether you have a problem would be stopped one. So get those HR analytics working for you and then once you understand alright, do we have potentially a discrepancy here between our strategy or our comp philosophy, and the reality of our workforce? Engage your comp team or call somebody like us to help you out!

David Turetsky: 13:29

Yeah, I wasn't I wasn't hoping for the shameless plug. But thank you, you got it. The one thing I would add is, is that what I've seen from a lot of companies that I've been consulting with is they need to do a little bit of work on the data, and making sure they understand where are people? Where are people working? And where are people reporting? You know, where are people living? Because sometimes those three things are very different. And I'll give you an example. So we have people who may have moved away from their reporting location, and the reporting location is where's your boss? Where's the work that you were hired for? But then what the work location is, is where are you actually doing the work? And so understanding those three things, and making sure they're there in your system will help you understand when you're having these conversations, are you talking to people who who've stayed where they are in high cost areas, and it's going to be a different conversation, when you talk about how this new system is going to work to people who are have moved to lower cost areas. And now you have to explain to them what the policies are.

Dino Zincarini: 14:30

Good point. And also maybe review some of these jobs to identify, Okay, we've done this in the past with critical jobs, this notion that there's some jobs that if you don't have a person in them, operating at full capacity, your company is not going to be able to deliver its good or service, maybe also adding into that location, which jobs must be in a specific location because we have a facility there or there's some other critical need, where remote is not an option. Identify those just so we know as we start to allow thing was a move, what has to remain fixed.

David Turetsky: 15:02

And, of course, when we're talking about these things, industry matters, right? If we're talking about a food service industry, you know, you're gonna need people who are working in specific locations, whether it's a manufacturer, food manufacturer, whether they're in retail, and they have restaurants, obviously, you have to be able to staff those, right? So they have to be in the office. But then some of the back office people, the finance, the accounting, the HR, the logistics, the support people, they don't need to be in the restaurant, they don't need to be in the office, they don't need to even be in the plant, potentially. Some HR people do, obviously, but industry matters here. And so we're going to need to your point, we're gonna need you to be smart about where does the work require that it has to happen versus where can it

Dino Zincarini: 15:44

Absolutely. And all these questions need to be happen? asked and answered relatively quickly. So time to get your HR team working.

David Turetsky: 15:53

And HR team, this is a big opportunity. It's not like this is going to be a lot of work. I mean, yes, you can hire consultants to do it. But at the end of the day, it's going to solve a lot of problems for you. So I guess what I'm saying is, don't fear it, embrace it, make it be part of what you need to do in order to be successful now retaining people, and being that culture champion for your organization to be more successful?

Dino Zincarini: 16:17

Absolutely. This is the value of HR, this is why we're here.

David Turetsky: 16:19

That's right. Dino, any other words of wisdom, any other examples that you wanted to end the podcast with?

Dino Zincarini: 16:34

Only that this is a real opportunity. I think we've that's been a theme in the HR Data Labs podcasts is that HR has opportunities. Everywhere there's these challenges, these are also exciting opportunities for us. Whether it's, you know, data cleansing is an opportunity to elevate the value of the information we curate this example where, you know, compensation disruption is an opportunity to elevate our value in leading change in an area that would otherwise hurt a company. These are all opportunities to really show why we're here and the value we provide. So I'm excited to help people see their way through it.

David Turetsky: 17:11

I'm excited too. I think there's a lot of opportunity here for HR to drive change and to be be what we need to have happen now to be culture champions.

Dino Zincarini: 17:21

Absolutely.

David Turetsky: 17:21

Dino, thank you very much.

Dino Zincarini: 17:22

Thank you.

David Turetsky: 17:24

Thank you, everybody for listening.

Announcer: 17:26

That was the HR Data Labs podcast. If you liked the episode, please subscribe. And if you know anyone that might like to hear it, please send it their way. Thank you for joining us this week, and stay tuned for our next episode. Stay safe