ADP MOTM 2023 – Pay Transparency’s Benefits and Challenges

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:

• How to Achieve Pay Transparency for Your Company
• What is Pay Transparency
• HR Data Labs Season 5 Episode 18
• HR Data Labs Season 5 Episode 16

• “Pay is always [an emotional topic] when you sit down with your employee . . . make sure they’re emotionally ready to have a conversation.”
• “There are a lot of challenges [with pay transparency] and one of them is that compliance cost is extremely high.”

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, pour 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
We're going to talk about what is pay transparency. We're going to talk about the effects of pay transparency on your organization, we're going to talk about why it's important to you. And I imagine that there might be some of you here who operate in California, New York, Colorado, Massachusetts, or one of the other states or Commonwealths that are actually implementing laws, regulations, even when it's counties are implementing different or had implemented different regulations, than their states did, maybe even prior to the states doing it. We're gonna talk about what it's, what its effect is on things like pay equity. And to the people who had been affected by not having the same fair pay as everybody else, and what pay transparency does for those people and giving them that opportunity. This is all preambles. So we're going to talk about a lot of those things. And we're also going to talk about some of the not so obvious effects. What are the things that are downstream implications for systems, for processes, and for the people who run them? Okay, we're also going to share with you some research that we did, we did a pulse survey across almost 700 organizations to find out the preparedness, the readiness and what people are actually doing around pay transparency, what their feelings on pay transparency. We're going to get to that in a bit. Why don't we get going? So a few things I have to tell you is I'm not a lawyer. Although there is a David Turetsky who is ADP, senior ethics lawyer now, literally, you can't make this up. My friend Jane Smith says that there's only one Jane Smith at ADP, but there were two David Turetskys. A lot of the things we're going to talk about because it relates to law, I can't give you legal advice, you need to talk to your general counsel, you may even need to get outside counsel, to be able to help you with these things. Because there are ramifications for how you attack these things. And we're going to talk about some of those. Next thing is, I am passionate about compensation. I'm passionate about HR, as you've seen, if anybody's ever seen me present before, I use flour, flowery language, I get really excited. I get really into it. And I've been told to calm down. I don't have that gear. So I apologize. If I say things like S H I T, sugar iced tea, I don't mean it. It just gets me there. And it's probably better you're not a compensation expert. But it's compensation experts have already probably started to address this in your organization. We are going to talk about compensation expert's opinion on this and what they're going to need to do to prepare for pay transparency. But you don't have to be a compensation expert. And the last one is I am not selling anything here. But I have to say that I work for Salary.com. It's a 26 year old startup in compensation. And we do things like we have HR data, we do compensation market surveys, we have technology that helps compensation managers do their job more efficiently. And we're dealing with things like skills and competencies. We also do consulting and I represent the consulting organization. I have a few colleagues that do as well here. My background is I was with ADP for 16 years. I originally built ADP talent management at a company called Workscape back in the early 2000s. And we got acquired by ADP. And then I built the ADP data cloud I was the chief product on ADP data cloud, which actually right now they're doing a really good session with my one of my best friends, Brent Weiss. He's a brilliant guy giving a presentation on analytics. So if you want to know about analytics, I can answer questions. But I've been doing compensation for over 35 years. And this is the purest intersection of where HR process, payroll process, compensation comes together affecting every company here. All of you and all of them out there who haven't joined us, they're all affected by pay transparency. And so as we get into it, we're going to talk about what you can do to help, and what you can do to prepare for what's coming. Oh by the way, it's here already. And it's affecting, if not every one of you in this room, certainly everybody out there as well. So this is what we're going to go through, we're going to talk about pay transparency ad nauseam. We're going to talk about its benefits, we're going to talk about what it is, what it means in certain states. We're going to talk about where the states are that are adopting it soon, we're going to talk about that survey I talked about, we're going to talk about what you can do about it. So we're going to talk about what exactly pay transparency is. There's a lot of rumor about pay transparency, there's a lot of incorrect information about pay transparency. People think the only thing it is about posting ranges on your job postings for candidates and that's all. That's only one little piece of a much bigger problem. And one of the problems is that it's a bigger issue than just recruiting. I start with that, because that's the one thing that everybody knows, right? In some states like Colorado, soon Massachusetts, New York, California and some others, they require you to have a relevant pay range on your job posting. Everybody knows that, right? That's kind of table stakes. We've all heard about that. But the other problem is, is that you need to make sure that every stakeholder in your organization understands how pay is conducted, how pay is decided. I worked at Morgan Stanley in the early 1990s. We were making money like crazy. And we actually had a down year in 1994, when someone from the Wall Street Journal wrote an article called Down and Out on $250,000 a Year where that was someone's base pay. They didn't get a bonus because we had a bad year. And when our managing directors and our executive committee heard people were sharing their pay, they immediately sent an email. Sorry, it was a memo. Remember those really secure memos that had really secure red string that went around two red dials on really secure manila interoffice memorandums envelope? And you can see who it went to the last 25 or 30. Yeah, for some of us who are really old, that's, that's what I remember. Well, we sent out that memo saying, if someone talks about their pay, no matter how important they are to the organization, they are terminated immediately with cause. And why is that funny now? Well, first of all, there was no such thing as the Internet back then. There was the watercooler or everybody knew everybody because they all went to the same master's program. They all knew each other because they were in the same associate for analyst program in this bank, or that bank, or their spouse work for that guy. And so they all talked. Well, we put down our foot and said, you're gonna get fired if you talk about your One of the first things these regulations do is say you cannot pay. fire someone for talking about pay. What does that do? It encourages people to talk about pay. Okay, good thing or bad thing. That's fascinating, because if you don't educate people, and I'm talking about all stakeholders, including employees, if you don't educate people on what pay transparency is and how it affects you and your organization. And so these laws and regulations that stipulate how you provide data are critical that everybody understands them now. And again, I'm saying I can't provide you legal advice. You have to talk to General Counsel, because if you operate in California, there are very strict rules about this. Very strict rules, not so much in New York, but they're still very important rules about what you can say can't be in New York City versus New York State, because New York City Law doesn't go away just because New York City, because New York state created its own law. Right? And so when you look at who has already provided legit legislation on wage range disclosure, I want you to think about this doesn't mean that you will have a headquarters in that state. It means you only need to have an employee who works in that state. They don't have to reside in that state. Does anybody have employees will reside in one state and service states? Yeah, a lot of you right? And so that's one of the big problems. And then understanding the differences between the municipality laws and the state laws is going to require us have a General Counsel, keep us honest about what is necessary to be able to be following the absolute correct legislation. So there are also differences in the laws. That means if you take one approach, you may have to tailor that approach not just to the municipality or the state, but it's probably best to take the lowest common denominator approach, which means what's the state that has the most regulation, the hardest step? Let's comply with that. And hopefully, based on what your general counsel tells you, it will apply to all of the states, as long as you make sure, based on your general counsel, that you are. And we're going to talk about the ones that actually go a little bit beyond that, and upon request is a really big, important thing here. An employee in California, we're gonna go to this in California side can actually request to see the pay range for their job, and their job description. Just a show of hands. How many of you have your job description completely up to date? Okay. Alright, well, that's scary, right? Because if you're operating in California, and one of your employees says, I want to see that, what are you gonna do? You're gonna run like crazy to get that job description updated. And we deal with a lot of clients right now to operate in California, who we're writing a lot of job descriptions. We're doing a lot of work on that, because it has to be accurate. Your pay ranges have to be accurate as well. And your pay range can't be from 2020. I will tell you right now that if its old, be better be relevant. Because if it isn't, you're providing that to that person and that's a violation. We're going to talk about what some of the violations add up to. You're going to have to sit with your general counsel and talk about this. The one thing that's important here that we've never heard before ever, is this thing here. In May, you're required to provide an accounting of your contractors, and how they're paid. Why would they do that? Anybody? Why would they do that? Why would the state of California ask for that?

Audience Member: 12:16
To make sure that, to have them pay taxes?

David Turetsky: 12:21
Well, taxes is an interesting concept, I didn't contemplate that. They want to make sure you're not paying your contractors unfairly, because they're going to do the same analysis that they're going to do on your other employees on your actual W2 employees. So they want to make sure you're not making someone a contractor to get around the fact that you're paying them unfairly. Let's go next slide. That one's an important one. This one passed after that one passed. And while the penalties are very similar, between New York and California, this one isn't, doesn't have that reporting requirement the California has. And that's why when I said before, you might want to go lowest common denominator. By the way, you may not have to report for California, there's a certain number of employees you have to have. Talk to your general counsel. But they have made it obvious that they want to make sure that you're paying people or that you're disclosing to people their pay. And by the way, that's not just on new hires. It's also on anybody who's going for a promotion, or a job change too. You have to disclose the wage range. So before we get into the benefits, and some of these are going to be obvious, and you're gonna say, well, I could have thought of that. The one thing I want to bring up everybody is that it's an emotional conversation. Pay is always emotional. Whenever you sit down with your employee, it's never a hey, how's it going? Hey, here's your increase. You love it? No. It's my family relies on this money. I was hoping for a 10% increase. Why aren't you giving this to me? I don't think I'm paid fairly, because I talked to my other colleagues and blah, blah, blah. There's emotion on the floor with this. It's dripping out of everything. So before we get into these challenges and benefits, the first one I want to tell you is my counsel to managers has always been when I was a practitioner, always schedule this when you're not doing anything else. Don't talk about the weather. Don't talk about the Knicks, or Rangers or Giants or whatever the sports team is you love together. Make this factual. Ask if they're emotionally ready to have a conversation, because if they're not, reschedule. Workplace violence happens because people are having a bad day and have a negative conversation. I'm terminating. I'm not giving you the increase you want. I'm sorry, I had to promote the other person and they catch them wrong. I've always told managers straight up, don't do that. Make sure the other person is emotionally ready. And that is double for when it comes to things like talking about pay. And that's why training is important. So the first benefit is, it's the law, you've got to do it. If you have one employee in California, you have to, you have to fill out this requirement for that one employee. Doesn't mean you move them out of California. By the way, they don't have to live there, as I said before, again, talk to your general counsel, it could be working there. The second thing is, it's the right thing to do. Obviously, we have people of color here, we have women here. And we all know that today is Equal Pay Day. That's not a good day, that is a very bad thing. And if you don't know what it is, there's plenty of stuff online, you can look it up. And it's not the same for all of us. It's the right thing to do to tell people what the wage is you want to pay a job. And for those of you who've heard of incidents, where people go into a conversation with a hiring manager, and they get told something different than somebody else, it happens every day, all across the country, for good managers and bad managers. They just do stupid crap. This is what I was talking about. The other thing to mention on a less emotional note is, there's this thing called the internet now, and people can look this stuff up. So whether you're telling the truth or not, they know what the range is. They can go to Glass Door or Salary.com and find out what's the wage range for that job. So you could tell them something, but they already have the information if they're really good at what they're doing. So it doesn't make sense in 2023 to not do this. Okay, the next thing is pay equity as I said before, there are disadvantaged groups, it's true, it happens, we know it, we've experienced it. And so paying people fairly, equitably, is an outcome of this, it is! If you're gay or straight, you're man or woman or whatever, it doesn't matter! Because you want the foundational information going into a job interview, you can make the right business decision for you. Who knows, it pays for the manager because the manager doesn't have to make shit up. Pardon my french again, I'm sorry. But they don't have to, because now it's obvious, it's out there, it's on a document that this person has in front of them. The next thing is, this helps with a DEI message. If you build this into your culture, if you build this into what you do, you don't have to worry about people feeling that they're being treated differently. Because everybody's on a level playing field. They all have the right information. And that helps your company culture. It gives you an opportunity to say we're embracing this, we're going to do the right things for you, because we care about you. But this also helps with career development discussions, we're in a war for talent now 1000 times for 10 years. We want to keep good people! If I'm telling you what your career is, I'm giving an opportunity to know what's your next step. And you're going to say what does that have to do with pay transparency? Because you're developing job descriptions now you can publish them and not worry about it. You can show people what's the difference between a skill level in one job and another one. We call this career frameworks. And you get current frameworks out to people, they say, Oh, wow, if I take this one class, this skill, I can get promoted and get into that job. And it gets me a pay range that I like, and I feel comfortable with. My family can feel more comfortable? It's great for you, it's great for your company, you'll keep those people that you want to keep. And when I wrote this, I said to myself, people aren't going to believe I have to say this. Because sometimes we're very immature about pay. As I mentioned before, it's an emotional topic. But it provides those mature business people with the information they need about their careers. If you aren't paying what they need to survive, they're going to make a mature decision to find another job. This is not personal. It's about business. And if you had the information about what's the next role for you, and what is right or wrong for you, you're gonna make a mature decision as an employee, right? So why not think about the people around you? Anybody know what the HR blame game is?

Audience Member: 19:23
It's what HR told me to do!

David Turetsky: 19:25
Exactly. HR told me I have to do this. HR told you that? I never told you to tell them that. I told you that the budget for merit is 5%, I didn't say you had to give them two. I told that manager that you have to pay for performance. So this gets you out of that. If you're in HR that you haven't heard that before. I swear it happens. I've literally been told by employees, my manager told me that you told them they have to do this. And I showed them a merit matrix. Oh my God, they now know what a comp ratio and performance means! They now know that there was guidance that we gave the managers that if somebody was at the low end of their range, they got a higher increase than if they were at the top end of the range, especially for higher performance. So it ends the HR blame games, because everybody is now knowledgeable in why and how pay is managed. And we've actually found, and we're doing some research on this part of the research we'll show you in a little while, that companies feel weird now about their merit increase process if they're not doing it fairly. And it puts more pressure on performance management to set actual goals that are measurable, and not subjective at all. Because if now everything is open, and you as an employee know how pay is managed, then you can get mad at your manager, if your performance is better than what they rated you as. And if the results of your pay increase aren't what the merit matrix says, it puts pressure on it. I'm talking about the reaction in a little bit.

Announcer: 21:15
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David Turetsky: 21:26
Unfortunately, there are lots of challenges. And one of them is compliance cost is extremely high here. Because for those of you who didn't raise your hands when I asked you about your updated job descriptions, you must update your job descriptions. They must be accurate. You must benchmark your jobs again. You must create fair pay ranges. You must do that in a way in which enables you to make sure that you can communicate these things. And training, you must train your managers and other stakeholders. You must communicate your employees about how pay works. Because if they get a hint that they're not going to get that information, then they're going to start asking questions, they're going to feel emboldened to ask questions, and you cannot tell them I'm not telling you anymore. It's not really against the law. But the other companies that are your competitors are going to start doing it, and you're going to be behind. And that's what I mean about rebuilding pay programs. The reinvestment in new job architecture, what I mean by that is look at your job table when you get back to where it left, like tonight, look at how many jobs you have versus how many employees. I've seen workforce now advantage, enterprise, lift beyond I've seen job tables that have 10,000 rows with only 5000 employees. Okay, yeah, maybe some of them are inactive. But if they're not inactivated, you're gonna get people like recruiters who are gonna take some of those old roles, and you're gonna have crazy stuff going on. The reason why I'm bringing this up in the context of job architecture is, there's a place in most of these systems to hold the job description when you're done there. These things should just gonna record for the most part, right? Well, whatever your HR system of record is, put the job description in there. That's where all that information should be in that job table should be accurate. So when we talk about revamp job architecture, making sure that you've painted the job table with all the information you need to do accurate reporting, not only to the states, like California, but also to your employees and your stakeholders. Make investments in market data, no comp person use one source of data. ADP has got an awesome one called the ADP data cloud. The benchmarking is phenomenal. They have a million employers, and 40 million employee records, and the data is great. Of course, there are other vendors that have that information as well. But if you invest in good market data, then you can point people to and we use five surveys, and we have three survey jobs that fit your job description, and we combine them to create a composite. And here's what that job data shows. I understand that. Having that information is better, having more than one source is better than having one source because one source can be inaccurate. Making decisions off of inaccurate data is bad. So I like to call it triangulation. And the last one, and we're going to talk about this in a little while is that market adjustments are going to be important. We used to budget 1% for market adjustments, you know what those are? Somebody is below market, somebody's below their range, we have to get them an adjustment to minimum, you've heard of that adjustment. But now we're gonna get situations where you're gonna post a job. And someone's gonna be in that job currently, and they're gonna get paid less and trying to come to you or their boss and say, I'm going to quit unless you fix my pay. We've seen some egregious examples of this, where if somebody is $60,000 less than the job posting. It happens, I promise you. And you can't pay that all at once. There's no way. So what you can do is put people on a plan to increase their pay to get there. But you have to start sitting down with your CFO and saying, Look, we looked at our market data, we looked at our pay ranges, we see this as our gap today. And every time you post a role, you have to do two things now, make sure you have that relevant pay range, we also have to look at the people who are currently in that job and say, Where does this fit amongst the people that we currently have in that role? Am I paying this job more? And if I am, are the people who are in that role today low performers, who are okay with this? Or are they high performers, and we could lose them? So it forces that because your employees, I bet you and I will bet you quarter on this, I can't afford it if I bet everybody $1 so I'm just gonna bet a quarter, take my word that you're gonna have in the next six to 12 months, you're gonna have someone come to you and say, I saw this thing online, I'm paid less, what do I do? And you have to give them great advice. The worst challenge of all is this one down here. But it's not just the fines to have fines for non compliance. It's not just about the fines, it's that how does that make you look in the world? Non compliance is I'm not going to do anything. We don't need to, it's never gonna happen to us! Is it? I'm not gonna ask if anybody has had that. Posting wide ranges. I'm gonna give you a good example of this. Actually, it was another example too. But this is a, this is a bad thing. You cannot post really wide ranges, because it will look ridiculous. And you will have people really mad at you. It's also against the law. How about not training managers. Do you guys train managers today on pay? Good, I got some headnods. That's great. For those of you don't, I promise you, it doesn't cost more than non compliance will. It also doesn't cost more than losing a really critical resource that you need who leaves because you're not paying them fairly. The other thing is not disclosing to employees. It's literally the law in most of the circumstances and most of the Commonwealths and states. So not doing it, again, is against the law. And that's the fines issue. The California requires you to keep the existing data for years, a lots of different fronts, but in this one, especially, and the records, and not disclosing is not an option. We've all had that issue where you don't disclose things to whether it's the CCP, whether it's the EEOC or California, other issues, that's not it's not gonna work. They'll get it from you, or they're going to fine you for it and continue to fine you for it. And the last one is create postings that have nothing to do with the job that you're posting. So has anybody seen this example? This was a news. Netflix posted a flight attendant job. And the pay range was 60,000 to $365,000 a year. Anybody do the math on the width of that range. It's right here. Sorry, I should have highlighted it. Oh, sorry $385,000. Anybody know any flight attendants who get paid almost $400,000 a year? Do you think that might have been a mistake? Well, it may have been, but it's gonna cost them money. And it also cost them reputation. It was on every major news outlet for at least a two or three day cycle. And it made all the internet like ablaze. Whoa, whoa, this is pay transparency. Haha. That's what literally people were saying. And this is an example of non compliance. Yes, they put in an overall market range for this role is typically, however, anybody going to apply for this job, has cause for action to say that's not a relevant range. They can report them to the State Department of California. I forget who the reporting entity is. It's on their website. And they will get fined for this. But it also makes them look like idiots. And if a comp person sees this, they're gonna call that recruiter and have that recruiter fired. Because I hope the comp person didn't do that because that comp person should get fired if they did. By the way, there's never been a survey that has shown 60,000 to $385,000 a year for a flight attendant, I promise you. I've conducted surveys I've been in survey companies. There's an audit that goes in that would prevent that from happening. By the way, that's in California I think. But still, this is bad. This is noncompliance. And they will suffer for this, especially the next time they give an increase in their rates. So one of the obvious answers to this question is, why not now. And I just want to point out the next one, this is the right thing to do. And as I mentioned before, if you've ever been that candidate who went to a job and went to four or five interviews, and said, Can someone please tell me how much this job is paid? I'm almost a finalist here. How come no one's told me what the pay range is for this job yet? I invested maybe 10 hours my time in this job. Oh, I'm not getting it. But they could have self selected out of it, despite having gone through that they probably want to, but they could have self selected out by knowing that the pay range wasn't for them, if they did find it out. And if they did get the job. How many of you have heard of situations where people have gotten a job offer, and it's way below what they want, but they go, may as well take it. It's not what I want, it's not fair for me. But I'll work my way up. I'll get an increase here or there. That's not fair. It's unfair. And by the way, it sets the person back, from an emotional perspective. So it's the right thing to do to tell people so they can want the job, feel like it's appropriate for them and feel like they're getting what they need out of it from the beginning. And the second of all, which I shouldn't have put second, which Okay. So why it's important, okay. It's the right thing to is, it's a freaking law! For those of you who operate in a state that doesn't have it, I promise you, your legislature is contemplating it. And it's coming in some of the strangest do. It touches everybody, not just employees, not just states. We're gonna get to that, right. Let's get the pulse survey first it was coming, but I inserted this first. So we're going to talk about, go to the next one. This is some of the managers, candidates, and even your customers, because they're statistics about how we conducted it, we had almost 700, I thought it was six, almost 700 participants. What we wanted to understand is the effect of pay transparency. And here are some big headlines, more than half of the participant state of the the ones who are going to see that you're posting jobs and the organization is already prepared. Should I ask? How many of you are prepared for pay transparency? There's one person who is like. I'm not going to call them out. And for the rest of you, thank you for being honest. All of you. This is And as I was saying, if you do not work or live in a state that ranges. They're going to look, I promise you they're gonna look. doesn't happen have transparency, it doesn't matter. These are the ones that say you can't ask for salary history. hard, it's gonna take time. And if you were willing to come to You cannot ask somebody what they used to get paid. Why is that important? You guys know about Lilly Ledbetter? Prior pay acts were why she got paid, underpaid for many years. And she won a really huge court case? And she got a lot of money my session, figure out what it's gonna take to get there. Okay, for it. And that started laws about not basing pay based on what you earned before. Because if you've been underpaid forever, and especially a lot of people have had that problem. we can start now, you're gonna need help. 45% have a plan for These states have said, you can't ask anymore. And it simply just happened. A lot of these have been on the books for a long time. These are the ones that have current transparency providing manager training information. And I think that's laws and regulations. And as I said, this is not red or blue, There's no going back here. These laws will not be repealed. Nevada, Cincinnati, Washington State, Colorado. Okay, the rest are rather blue. But this is just the start. This is where pending legislation is going to be. And we've we've broken it wonderful. But it should be 90%. Because that means half still down by Transparency versus pay equity, because at the basis of this is the fundamentals around pay equity. And everybody understands pay equity, right? It's looking and making sure that the people that you're paying today, in don't know how pay runs. And the last one, 46% do not have a plan substantially similar roles have no statistically significant gap in pay. Meaning if I pay one, one group of people 50,000 And another group of people 52,000, if the statistics of the makeup for providing employees with training. 46 don't have a plan. of that population, don't say that's statistically significant, then it's okay to have that. But it'd be nicer if you got rid of that gap. Right? That's what pay equity laws try It's not a Republican Democrat issue. State of Colorado was one and do. So this is a question that you all need to answer. By the way, that doesn't mean that 54 do. There were a lot Who's in legal here? Yeah, I've had one in the past. Payroll, HR. Who's a generalist in HR? Thank you for being honest. that said, I don't know, I'm not ready to answer that or I'm not Finance. Hey, welcome our finance collegue! Compensation, my brother, and recruiting and talent acquisition. Hey, welcome. Oh, okay. And then he does all of it. Because I know sure. Suffice it to say pay transparency is providing ageda. Mike there Yes, yeah. So now we're gonna go through why this is important for each one of you. So in legal. You need help. This is complicated. And the one that I wanted to say that I wanted to call out here And again, I'm not a lawyer. I don't want to be. This is bad. I mean, this makes things hard. Because now you have to balance compliance versus costs and all that other stuff. You need to of the first to put in a pay transparency law, and they are document requirements for everybody internally to follow that say, this is how we're going to do this. And you need is they want to reward their top performers. 29% are not to sit down today, with your legal team, if they haven't already started doing this and say, how are you going to do this with us? Because they are absolutely required in these confident that their performance feedback based merit increases conversations. Don't even go to your CHRO first, go to your general counsel and talk and say we need to sit down with the head of HR. And we need to talk to them about this right now. The next one is payroll, HR people, the rest of you. So when I say look at your job table, I mean, look at your job table. gonna suffice. Remeber I was talking before about performance You know, we all know you can export it, right? Whether you're workforce now, vantage enterprise, export it, and then look at the active rows first. Okay, and look at your active rows and make sure that it's consistent, that it's obvious, management? That's what I was talking about. 76% and this was that there are differences between jobs, and find out from not a blue state by any stretch of the imagination. I mean maybe your TA recruiting, as well as your compensation staff how many descriptions we have and how many we don't have. And we're going to talk about that because you need to then make sure that encouraging. 76% said that it will not cause them to reduce they're modern. That you can refine them, that they're right, they're accurate. If you provide them to new employees, they don't crap all over them. This isn't what I do, and they just the range performance based increase and base pay. I'm very by the way, if it's not what they do, and you've been basing your market pricing based on those descriptions, that market prices will be challenged, and it won't be valid. Okay. And then you're going to need to help create those reports that happy that happens. But they're going to need to train managers go to California to the State Department or whoever is doing that. The next one HR, you're gonna have to talk about what the rules are today. And if you have a handbook, and it mentions, you can't talk about pay, you got to get rid of that page. You really do. And you got to talk about what the right on how to get better at merit increases. And this was also 35% they are more now than they were before. But this is not rules are. Because the time is now. It's now you have to do that, you have to create new policies. And then you have to talk about what training means. And you need to start this probably should have been the first one, start at the top. said that it would be positive or mostly positive, and only 17% Tell them what's going on. Tell them they need leadership needs to buy into this right now. Compliance is absolutely a must. So sit with General Counsel and your leadership team outline for them, if you want to give them the presentation if you like. So would be mostly negative. That pay transparency is you know, with finance, you need to sit down now and talk to them about what's the cost of this for first implementing it and next, what are the potential for fines and accruing for fines, they're gonna happen. Whether or not you post ranges, you're gonna get mostly positive or mostly negative. That's great, but people who challenge them, you're gonna get a candidates who challenge them, and you're gonna get fined. It's gonna Republican Democrat. happen. It's just the cost of doing business, allow for it to still leaves a wide range of folks who aren't sure. happen. But you will also need to accrue for it so you don't get hit with a liability that will hurt your business. Those people in compensation my brotheren, you have a lot of work to do. We're the ones who typically help create job descriptions with talent acquisition recruiting, and they're going to come to us and say, Okay, I heard about this transparency thing that you learned about MOTM. Lovely. What are we doing first? Are we doing the active recs? Are we doing the recs that we've got budgeted? Because we've got a lot of them. Everybody's still hiring like crazy, then you're going to need a market price all your jobs. Now there are some companies, I'd like to get a show of hands if you guys know, if you don't know, it's okay. How many of you use traditional salary structures? Okay, it's okay if you don't know. You do. Okay. Does anybody use job ranges? Basically, job ranges are you take market pricing data, you take the midpoint, and you do something like creating 80 to 120 around the midpoint. And that will suffice in the circumstance, you're creating a relevant range of pay around a job, right, for that market data. For hopefully a composite market data. That's going to be critical, because those ranges will be the ones you use for posting. Now, you could use your grade ranges, but typically your grade ranges yeah, they're gonna be 80 to 120. But you're gonna have jobs that are around the midpoint and some will be lower, and some will be higher. Here's another problem that we've been talking about a lot. Most of these municipalities have minimum wage restrictions. And you need to make sure that you're not running afoul of the minimum when you make those ranges. And that's not obvious. Comp needs to worry about that. Comp people typically go eh, it's probably fine. Because I've been a comp person for a long time, we say that. It's not, especially as pay ranges have gotten larger. Over time, we're talking about 15 $16 in a lot of jurisdictions right now. And you need to pay attention, whether they're tipped or not tipped. And by the way, you all know, again, not legal counsel here. But you all know that it's better to be a non exempt employee to follow the law than to make a job exempt, right? The DOL is never going to come down on you if you make everybody in the company nonexempt. But if they ask, why is this job exempt, and it shouldn't be, then you're in trouble. Well, that has to be one of the issues that we deal with now. Because manager's natural inclination is to reduce costs. And what's one of those big costs? Overtime, but you've heard it, you've seen the statistics if you've used the overtime cost metric that exists in the AP Data Cloud Analytics Suite. It's really expensive. And so one of those things you really need to consider as you're looking into those descriptions is the FLSA as well. Look at the adjustment to minimum cases very carefully. That's that piece I talked about before about budgeting that we're gonna need to pay attention to. Because if someone's already below minimum in the job they're in, they're already out of compliance. And they're already going to be problems for you. So make sure that you budget that into your next pay cycle. And if you haven't yet, that's the first thing to talk to, when you're sitting down and talking to your legal counsel, say we've got $350,000, in under minimum conditions right now, what do we do about them? They'll say, oh give them the minimum. Because that should been your policy all along anyways, right? And some times this stuff just happens and it comes up on us fast, especially if you're doing if you're moving your midpoints from year to year based on salary structure movement, that's going to be important to look at those steps in minimum cases. And the last thing is for recruiting, you are critical in this process, you will make this process either work or fail based on the fact that you are now the new consumers and best friends of comp. Now, of course, you used to be best friends before, because you used to say what's the pay range for this job, right? We keep hearing in the market that the pay range is this? What's your opinion? What do the surveys show? What have you heard from your survey company? How's the movement going in this job? Now they become your best friend. And again, if you guys haven't seen the ADP Data Cloud, they have this thing called a talent market insights explore and they have the annual comp explore, which shows you payroll data from last month. It shows you a pay range for a job for base pay and total cash for last month based on the data that they collect from table from last month. So it's a relevant pay range. I wouldn't use it exactly. Again. I would mix it with other pieces to make sure that it fits. But that's going to be data that you recruiters desperately need, they already need it. But this has been going to be even more important now that they have to post that range on the job. And one person when I was talking about this with a company, they said, Hey, are you going to talk about the fact that you could be talking about national range or local market range like Colorado or or New York or Massachusetts or, or one of the other states? And I've said, you know, what, show it off. Show it off. If you have a national strategy, and you use geographic differentials. Talk about it. If you have five jurisdictions that you're operating in, show them, what's the harm? What's the harm? Eventually, they're going to know, especially your employees in those jurisdictions, there are no secrets anymore. No secrets. This law abolishes secrets. So why bother? Say it! Publish it! How many of you live in municipalities that require pay disclosure for your mayor, for your head of education, for your police, or your sheriff? A lot of us do if you actually look, look on your website when you go home for your town pay. They don't make much, which is not by accident of course. You've been living in that well forever. we've ignored it. Because it's not us. It doesn't relate to us, or at least it does. We don't pay attention to it. We put blinders on. Hey, are you listening to this and thinking to yourself, Man, I wish I could talk to David about this? Well, you're in luck, we have a special offer for listeners of the HR Data Labs podcast, a free half hour call with me about any of the topics we cover on the podcast or whatever is on your mind. Go to Salary.com/HRDLconsulting to schedule your FREE 30 minute call today. So let's stop and ask questions because this is now the point where I'm going to stop talking. And I want you guys to talk. Tell me what it is that you're dealing with with pay transparency. If you have any questions about pay transparency.

Audience Member: 47:11
When you were saying that you can't have too large of a range? What is that? How do you know?

David Turetsky: 47:19
So just some of the states are more precise than others. That's why I said talk to your legal council. In compensation, we've always use the 50% spread, meaning 80 to 120% of the midpoint of a job's market rate, or of the salary range. 80% to 120%. I know that it seems like it's 40%. But then divide the 40% by 80%. And that's 50 percent spread. People who are in comp go, you're nuts that's 40%. It's not 40%. Right. And I had to do the math one time, I'm like, wait a minute, is it 40? No it is 50. Have you ever done that, have you ever doubted yourself on that one? Yeah, even it seems nuts to that's a 50% spread. That's fine. It's 25% down and 25% up. There are some companies who do it wider. That's your culture, disclose it. Say we use an 80% range, we use a 50% range. There are things called asynchronous ranges, where we do a smaller from minimum to midpoint, and we do a larger from midpoint to maximum. Why? Because we have a lot of experienced workers, and we want them to be around a long time. We don't care that we're paying them a lot, because midpoint is what the market rate is. So if you're paying more than market rate, it's gonna get expensive. I don't care. I want that experienced worker. So you can push out the maximum. So that's what we call asynchronous range. It's not synchronous around the midpoint. Good question. Yeah.

Audience Member: 48:51
Um

David Turetsky: 48:56
Yeah, that's gonna be complex. And that's why I've said talk to your General Counsel, because I don't know the requirements to be honest. I've studied though, but I can't be conversing. But the minimum is you have to give gender ethnicity and pay about those people just like you do on EFC. But I think you also have to give a range as well.

Audience Member: 49:18
And have to provide the actual job title?

David Turetsky: 49:20
Oh, yeah. Yeah. We in fact, did EFC when they were redoing the EEO one. This was six years ago, I think. They were going to change the EO1 the reporting requirements around the center of the government. And we had suggested to them that they collect job title and we suggested they collect total cash. Because you know that reporting all it is is EEO one category, gender, ethnicity and pay, now hours too. Especially when it comes to the hourly rate, which isn't exactly how you calculate hourly rate. But they collect that information, so why not collect job title? Yeah, it's gonna be all over the board. We also suggested if not job title, collect the Onet number, they Onet tag. Because most of us actually participate in surveys, you can get o net, using that pretty easily, o net's terrible kind of taxonomy. But at least it gives them an opportunity to be able to say, the range of pay for that job in that jurisdiction is this to this, and you're paying outside of that. So it would give them more analytics around that they are deprived. So we want them to do a little more analytics on it. We also discuss the ADP Psychology.

Audience Member: 50:40
Yeah, no, no, I have a union and non union folks. And so these union have straight flat fee, I mean rate, is that going to be chill in reporting the fact that it's just one way?

David Turetsky: 50:54
No, if fact I have clients who have separates? And they say the separate for this job where the rate for this job from hire is this. That's what it is.

Audience Member: 51:04
Okay. What does it mean to benchmark?

David Turetsky: 51:09
Great question! Great question, thank you for asking it. Benchmarking a role means you're doing a study to look at how people pay in the market. You can buy surveys that exist that are published data from companies just like yourselves that say, here's what I pay from the minimum to the maximum for this role. Some of them actually provide the incoming data, the individual employees in each job, and they match their job to the survey taxonomies. The survey has lots of descriptions, and they have job codes and job titles. And they say this accountant one matches that accountant one, or this accountant one matches that accountant two. They do a little bit more than the one does. Then they take all that data and they collate it. And they run the statistics on it against across all these companies. And they do QA on it to make sure there's not the 385 versus 60 in a job. And then they post it statistics and some charge for that. Or they charge for the participation and you get the data on the backend. Typically, they start the process in March.

Audience Member: 52:10
Most of the ADP products have analytics that do benchmarking across the whole region of the United States.

David Turetsky: 52:17
That's correct, including Puerto Rico. And the annual comp explorer is the one that does that pay range, those pay ranges that match jobs around descriptions. Yes.

Audience Member: 52:28
Do you have any general advice of pitfalls like, oh, they just messed up? I'm not reading job descriptions. It's a challenge.

David Turetsky: 52:37
Yes, stop description suck. Because jobs never stay still. Never stay still. They're constantly evolving. I've seen some companies who've made job descriptions that are four pages long. And I tell them don't do that. I've seen them put only skills in, don't do that. I've seen them put only responsibilities in, don't do that. Have a balance of information in there. There is no such thing. As someone who can do 40 responsibilities. It's not possible! Take the top five responsibilities that person does. And then that's what you describe. Because everything else is just what you make that person do, not the job. You're describing the job, not what the person does. So my advice is sit down with a group of managers who have that job, say I'm going to create a description. I'm going to send it to you for you to evaluate. And then I want you to tell me what these people really do. Not what Bob or Barbara or Mary does. That's not what we're asking, What are they supposed to get done? What do we need their essential duties to be? Then you also have to put down what required education there is, what working conditions the people are in. Don't make it too complex, because nobody will understand it. Make it consumable. This is what you're using to hire people. And if they read it, oh, by the way, don't put any acronyms in it. How many of you live in a world like ADP? Everything's an acronym. I mean ADP is an acronym itself, right? And so we live in that world. If you put those acronyms in a job description, I promise you, no one will understand you, even if you're a national brand, so spell things out for people. Those are my top few for job descriptions. The other thing is if your descriptions have a copyright date, of 2019 or earlier, or 2020 Earlier, throw them away. They're no good anymore. I promise you, nobody doing the same work that they did four years ago, especially with the pandemic.

Audience Member: 54:41
How often you should you update them? Every year?

David Turetsky: 54:44
So you know how during daylight savings time you're supposed to change the batteries in your smoke detectors? That's my PSA for the day. I'm not saying every six months, but I would ask your managers during the review time, right before you do reviews, review your job descriptions as well. Wow, you're gonna help me do merit and you need me to do the performance IU. And you want me to look at the job description? Yes, because when you sit down with them to go over their pay and their performance. Maybe it's a good time to talk to them about what their essential duties are, to remind them.

Audience Member: 55:19
One last question. Any thoughts on who should own job descriptions?

David Turetsky: 55:25
Own job descriptions? If you're in a world where managers did their jobs. I think managers, because there's the ones. I know that skepticism. There's a word they're gonna use when you talk to them about that and say it's your responsibility. And literally it is. And yes, comp can own it, recruiting can own it, but does comp and recruiting know what that job does? No way! There's no way! We don't know, we can guess! We can take from our Salary.com library job description. And you can paste that into a job description and you can send it to ta manager and they're going to say where did you get this crap from? Cause we don't know! We're just using what we have! Or you can get one off the internet. They're the ones who need to own the content. And I know it's funny because they're never going to own it. But they have to, because if they want someone to get the work done. At least they can they can audit it. They can tell you whether it's right or wrong. It's great question. Thank you so much for your time. You guys are awesome.

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