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[00:00:00] Announcer: This is the Build A Vibrant Culture Podcast, your source for the strategies, systems, and insights you need to turn your dreams into your destiny. Every week we dive into dynamic conversations as our host, Nicole Greer, interviews leadership and business experts. They're here to shed light on practical solutions to the challenges of personal and professional development. Now, here's your host, a professional speaker, coach, and consultant, Nicole Greer.
[00:00:28] Nicole: Welcome everybody to the Build A Vibrant Culture podcast. My name is Nicole Greer and I am here to help you build a vibrant culture. And today I have an amazing guest again. This guest today is Jason Smith. I met Jason Smith at the SHRM, the Rock Hill SHRM, the Society for Human Resource Management, and we became fast friends. Jason Smith is the Principal Compensation Consultant -that's the PCC for all of you- with Gallagher's Compensation and Rewards Consulting practice. He is based in Columbia, South Carolina, where he is responsible for attaining and leading general workforce and sales compensation client engagements. Jason has been a compensation practitioner in the industry since 2006 and joined Gallagher in late 2023 to put all his experience to work for Gallagher's clients. His past employers include Gannett (USATODAY), First Citizens Bank, Denny's. ( Don't you love a Grand Slam? Everybody say yes. Put it in the comments. Love a Grand Slam.) Palmetto Health (now Prisma Health). Jason also served as the president of the Chain Restaurant's Total Rewards Association. That's the C-R-T-R-A and at-large board member for the South Carolina Healthcare Human Resources Association. Jason received a BS in Business Administration from the University of South Carolina and holds four certifications from World at Work. He is a CCP, a CSCP, a GRP, and a CBP, that's a lot of Cs and Bs and Ps. And he is also a faculty member for them. Please welcome to the show Jason Smith! How are you?
[00:02:05] Jason Smith: I am great. Thanks for having me.
[00:02:07] Nicole: Yeah. I'm so excited. So poor Jason. He's at the SHRM meeting and I mentioned the Applebee's and he's like, oh my God, I was the Applebee's! So we're like brothers from another mother. We got this Applebee's history. If you've been listening to the podcast, I used to work at the Applebee's and so did Jason. But Jason, tell us, how did you get into HR? Usually people kind of fall into it. How'd you get into this biz?
[00:02:31] Jason Smith: Well, it was really because of Applebee's. You know, most of my dearest friends to this day are people that I worked with at Applebee's 20 years ago. And Applebee's was a much different animal 20 years ago than it is today. But yeah, it was partly because I was bartending one day-- actually, so I'll go back a little bit further. I didn't tell you this part. My first actual job out of college was working at the unemployment office in Sumter, South Carolina.
[00:02:56] Nicole: Oh my gosh, what a great first job! You can't make that up! That's fantastic.
[00:03:00] Jason Smith: Yeah, no, you can't, and I mean, I had a marketing degree, but all the jobs for marketing majors were sales jobs and I didn't want to do that. So yeah, so I went to work there. It was on a temporary grant with the state, and that temporary grant did not get renewed because of budget cuts and stuff like that.
[00:03:15] Nicole: See, nothing has changed y'all. People are like, things are bad. And it's like, well, it's always been like this. Anyway, go ahead.
[00:03:23] Jason Smith: So effectively I got laid off from the unemployment office, and that's been a fun story for me.
[00:03:29] Nicole: That's hilarious.
[00:03:31] Jason Smith: I walked out the back door on my last day and came around, walked in the front door and applied for unemployment, but... actually I did not apply for unemployment. So I managed to go back to bartending at Applebee's, for a little while. And I was in there one day and these two ladies came in for some happy hour drinks. And I was actually picking up a shift for somebody. I wasn't supposed to be there. But these two ladies came in and I remembered them from maybe six months before? And remembered their drinks. And so, they they were really impressed with that, I guess, and had their drinks. So.
[00:04:00] Nicole: Customer service, people. Customer service.
[00:04:01] Jason Smith: Yeah, one, one was a Gold Rocks margarita, and the other one was a Glen Livet on the rocks. Anyway, so I talked to them, gave them my story about getting laid off from the unemployment office. And I was washing glasses at the other end of the bar and I noticed them talking and snickering, kind of whispering to each other. And I went over and asked them what they were talking about, and they just came out and said, would you like to apply for a benefits counselor job at Palmetto Health?
[00:04:25] Nicole: What?
[00:04:25] Jason Smith: Sure. I didn't even ask what it paid. I just needed a job. And it definitely wasn't my wheelhouse, but they saw how I handled them and it was a big customer service job, for the employees, to help employees with their benefits and everything. So yeah, two weeks later I had the job and it worked out from there.
[00:04:42] And then three years after that is when the compensation manager came to me and said, Hey, I was wondering if you'd like to apply to become part of my team. And I said, well, that, that's great and all, but what do you do? I don't, I dunno, about compensation. Right, right. So yeah, so I, that was 2006 and ever since then I got really into compensation and really enjoyed it and enjoyed being good at it. Yeah. So that's how I ended up here 20 years later almost.
[00:05:08] Nicole: That's so fantastic. Well, it's so crazy that we have this in common because I was at the Applebee's, I was running around, I was doing front of house, and woman said to me, come here a minute. Let me give you my business card. And I was so young and not with it yet. And she's like, just call me. I'm like, what do you want me to call you about? I didn't understand. And she's like, just call me. I'm like, okay. And so I called her, with one of those phones that was actually attached to the wall with a cord. And same thing. She's like, I think you should try property management. So, I don't know. It's a thing. You gotta start somewhere. And when I was at Applebee's, this is probably your case too, they asked me to train people. They asked me to be part of the training process, which is HR, don't you think?
[00:05:50] Jason Smith: It is.
[00:05:51] Nicole: Yeah. So, here's the thing. If you want to get into HR, maybe get into food service, maybe get into retail and work your way into the crevices and the cracks like we did.
[00:06:02] Jason Smith: Right.
[00:06:02] Nicole: Yeah. So compensation. We're gonna talk about compensation today. And everybody's like, show me the money, right? So we've got employees on one hand that want more money, more money, more money. And we've got employers on the other hand, like, I don't know if I can pay this. So there's a lot to take into consideration here, and I know most of us as leaders and HR professionals, we want to know how to do it right. So let's tap into the serious brain of Jason right now. All right. So my first question for you, Jason, is how should leaders, right, so just a leader who's got a team who's trying to pay them
[00:06:37] Jason Smith: Yeah.
[00:06:37] Nicole: the right amount of money. How do they think about balancing internal equity with market competitiveness? So first of all, internal equity means how do we keep it right on the inside of the company, and then how do we compete with what people are paying out there? Okay so mark, set, go!
[00:06:53] Jason Smith: Yeah, I mean, yeah it's the age old question- and it's hard to focus on both things, but if you focus on one, it kind of lends to the other one. But this is definitely what all HR leaders and leaders should be thinking about constantly is how to maintain that balance between internal equity and external competitiveness, because it's important.
[00:07:12] So for HR leaders, especially ones in smaller organizations that wear all the hats, you know, they do comp, they do benefits, they do performance management, they do learning and development, they do employee relations, and a lot of them are heavy on employee relations. And while they may be an expert at employee relations, they may not be an expert at the other pieces, the other hats.
[00:07:31] But they should really be developing programs and practices that kind of give their frontline managers the tools and the guidance that they need to be able to make good informed pay decisions for both new hires and internal promotions, all of those. So, it's really important. But getting to that point involves a lot of work. You have to make sure that you know the data. You have to have the market data. So to have the market data, you gotta buy the market data. Now we're gonna get into that with a couple of things later on, too. Just know that, like scouring the web for pay ranges on other job postings and going to the free salary.com. So I want to clarify salary.com. The free site is one of those things where you get what you pay for, right? It's free. You just punch in your job title, you punch in your pay. It's employee reported data. But there's a lot of HR managers out there that again, are wearing all the hats. And there are, there are.
[00:08:28] Nicole: Well we gotta do what's quick? Right?
[00:08:30] Jason Smith: Right. They gotta go out and do what's quick and what's free. So yeah, it's a mishmash of all that, but then you get the data, what do you do with it? Right? Then you gotta figure out what the 25th and 50th and 75th percentile is and what everybody's compa-ratio is. So it's a lot of work, especially if you are not an expert in compensation which is why people like me exist to help them navigate that.
[00:08:52] Nicole: That's right. And teach us, be our little trainer.
[00:08:55] Jason Smith: Yeah. Yeah. But it's all about maintaining a balance. You focus on one too much, you're gonna miss the other. It's a tough balance, but that's what I help a lot of my clients with now.
[00:09:04] Nicole: Yeah. And I think on the internal equity side, you've got your data right. You know what I mean? You have your data, you should have a handle on your data, which means you should know the ranges in a certain job title, things like that. What's going on, why you're doing what you're doing. There may be some, like good reason why you're doing what you're doing, so recognizing that. There's a lot you can do, but definitely you can get your internal and he's gonna share later about the market competitiveness. Okay? So we gotta make sure we know what's going on, get our data in place. All right, so what's the difference between pay equity and pay equality and why does it matter? One of the big things out there, Jason, is this whole talk about pay transparency and all this kind of stuff. So, what's the difference between pay equity and pay equality? Teach us.
[00:09:52] Jason Smith: Well, it's a really nominal difference between the two of them. And pay equity really focuses on eliminating wage disparities that arise from discrimination. And that's something that we do as well. We go in and we help companies identify those issues. We make recommendations on what they're supposed to do to fix those issues. Normally you have internal counsel from the client engaged in this just to make sure, 'cause there's a lot of emails back and forth about specific individuals and their pay relative to others. But yeah, pay equity focuses on, it's really the act of eliminating wage discrepancies.
[00:10:26] But then pay equality is all about ensuring that there is no discrimination going on. So one is fixing a problem and the other, pay equality, is not creating a problem.
[00:10:39] Nicole: Preventative maintenance.
[00:10:41] Jason Smith: Yeah. So it's making sure that you're doing all of these things on the front end when you bring in new hires, that you're not creating inequities. Yeah. And it's an important thing to remember that all of the stuff you can Google about it talks about how it's equal pay for equal work, but that's not necessarily the case because experience and individual performance can come into play with that and really muddy the waters for sure. So if you've got a male and a female both doing the same job, both with, let's say the same performance, but with varying experience, then they should not make the same. Right?
[00:11:17] Nicole: That's right, 'cause if you have experience, especially if you're doing something, you're starting something up and that person's done it in their past and one hasn't, they're gonna, they're gonna have more value.
[00:11:27] Jason Smith: Right. Absolutely. So it's a tricky thing, but pay transparency is a different thing altogether. We'll get to that. I'm sure that we're gonna talk about that here soon.
[00:11:35] Nicole: All right. Very good. All right. We need to put some practices in place so that we have pay equality so we don't end up with a pay equity problem. Did I get that right?
[00:11:45] Jason Smith: Yes, that is correct. Yeah.
[00:11:47] Nicole: Okay, fantastic. All right. So say we get in trouble. All right? We have p ay inequity- I-N in front of your equity- inequity. What are the most common mistakes that we're making with our compensation plans? So what are the boo boos you see all the time in your work?
[00:12:06] Jason Smith: Well, having run compensation at several companies throughout my career and both run it and just support it. And now as a consultant, I'm seeing a lot variation in programs that need a lot of work and reasons that they got there. But really, no communication. Like that's a big mistake and that lends to pay transparency as well. But you really have to communicate things. You have to communicate merit increases and communicate it well. You have to communicate bonuses, communicate them well. And that's something that I see that a lot of comp programs that I deal with on the backend as a consultant, that there's been some staleness because people haven't been as on top of the compensation program as they should be.
[00:12:50] Now, that also includes things like a lack of buy-in from the C-suite. So, I mean, if the C-Suite's not bought into any of it, if they think that, well, we don't need to move the pay structure every year, it's fine the way is. No, it's not. I worked somewhere and the entire time I was there, we did not move the structure. And that was over about six years.
[00:13:10] Nicole: on a second hold on a second, when you say move the structure, what do you mean by that? Teach us.
[00:13:13] Jason Smith: Well you have to move, you have to age your structure every year. So all of your pay ranges are in your pay structure, right? And it starts from 50,000 to 100,000. This is one of your pay ranges. And you've got one job assigned to that pay range or pay grade. So this year that might be an appropriate pay grade. Next year that still might be an appropriate pay grade. But then the next year you need to slide the ranges you need to age them forward a little bit. I normally recommend at a clip that is somewhat less than your merit budget. So if your merit budget's 3%, move your pay structure 1 1/2, 2%, because you don't want people just moving in the range without the range moving around them. That's kind of a tricky thing. And I answered this. You weren't there at the Rock Hill SH RM meeting when I spoke.
[00:14:01] Nicole: I know, I had a client and Jason's down there just laying out the wisdom and I didn't get to go.
[00:14:06] Jason Smith: It is okay, but I got some really good questions and some really good engagement from that group. But yeah, that, that's one of the things like if you just let your pay structure stay still, eventually you're gonna have to reassign your jobs to new grades instead of letting your ranges grow with the market and with merit increases.
[00:14:24] So it's not topping people out, it's not, slighting anyone by doing that. It's just maintaining that people are consistently moving within the range, but that the range is also moving at somewhat of a slower pace to make sure that they don't top out too soon. Because when they top out, you gotta stop the merit increases. You start giving them a merit lump sum increase or bonus. And that's just never an ideal way to go. Knowing that--
[00:14:49] Nicole: Are you talking about reclassifying somebody at point?
[00:14:52] Jason Smith: I'm talking about reclassifying a job at some point, because especially in IT jobs, they moved so quickly over the last 10 years that when I was in that company that was not moving its pay structure, I found myself doing more work around figuring out what new pay grade to move this job to, because we had not moved the structure. And that's not a great way to do it. But as long as you're moving the structure. And it doesn't need to be fancy. The pay structures that we create for people as part of our engagements are grade 1, 2, 3, 4, 5, 6. Now some companies have some pay structures already in place that we are replacing or enhancing. We will honor their socialized pay grade labels if they want us to, because sometimes, oh, that job's a pay grade AD or whatever. So, they're used to that. It works for them. We try to keep that intact if we have to. But yeah, pay structure does not need to be fancy.
[00:15:51] Other things that I've noticed, like the incentive plans, like if a company has incentive plans that aren't really motivating, they're not really driving the right behaviors, then you're not gonna get anything out of that. And it lends to people being unhappy. If there's not a meaningful opportunity there. I have somebody that I know somebody that works in retail and she was an assistant manager and she was up for like a $500 a month bonus opportunity if the store did well, which was fine for her, but for her associates that worked for her, the frontline associates, they were up for a $50 opportunity every month. Now, is that driving anything? Is that making them work any harder? I don't think so. Right? I mean, even for a 16, 17, $18 an hour employee, $50 a month isn't moving the needle.
[00:16:36] Nicole: Right, and what if they find out the manager's gonna get 500 and they're gonna get 50, then we really have a problem.
[00:16:42] Jason Smith: Yeah. Well, well that's not pay transparency. That is not. Yeah, that is not where we want to take pay transparency. Pay transparency deals with the individuals. It's not broadcasting what everybody makes.
[00:16:54] Nicole: Right. But do they talk? Everybody shake your head yes. They all talk.
[00:16:58] Jason Smith: Yeah. It's protected speech for sure.
[00:17:00] Nicole: Yeah. All right. Very good. So compensation in terms of watch what you're incentivizing people to do, and then move the pay structure around the job description. Did I get that right? Help me.
[00:17:14] Jason Smith: Well yeah, move your whole structure. So if your structure, let's say your midpoint of 50,000-100,000 is 75,000. So if you move your structure 2%, that means that your new midpoint is going to be, whatever, 75,000-- let's see, 2% would be 1,570. 76 5. It'd be 76 5. Right. If somebody was making 75,000 and you just gave them a 3% merit increase, then they're gonna be making, oh man. Either way, yes, you gotta move your structure in conjunction with your merit increase planning or your cost of living adjustments, whatever you do, because not all companies do merit increases. So a lot are doing the cost of living adjustments, especially since Covid and inflation and everything. So we saw a lot of the merits turn into COLAs.
[00:18:08] Nicole: Hmm. Yeah, absolutely. I just want to throw this in here real quick. You gotta do this employee performance management with your people so that
[00:18:18] Jason Smith: Yeah.
[00:18:18] Nicole: you can give really good merit increases, right?
[00:18:22] Jason Smith: Mm-hmm.
[00:18:22] Nicole: If you're not doing employee performance management, then it's hard to know is Jason really doing better than Nicole? Or is it just my opinion? Right? So I think it's absolutely huge. We should have a whole podcast about employee performance management. We should do that too.
[00:18:36] Jason Smith: Oh, no I want to do a whole podcast on job titles, that's my soapbox.
[00:18:42] Nicole: Oh. Well maybe we'll have time to get you on your soapbox today. We'll see what happens.
[00:18:46] Jason Smith: We, we might, yeah, we might,
[00:18:48] Nicole: Okay. Yeah, and I can tell 'cause he got very serious. Very good. All right. Let's look at what's happening out there in compensation. So how has compensation strategy evolved in the last five years? If we go back we're talking Covid, right? 2020. And where do you think it's headed? So first of all, start with what's been the things that are happening in the last five years?
[00:19:08] Jason Smith: Well, Covid presented a lot of challenges to companies around compensation, especially with the great resignation that started mid to late 2021. Because people could leave, you know, they could do the same job somewhere else and make more money. And it's one of those things that I crow about when I'm doing my speaking engagements. Why are you waiting to give that person their raise? Why are you waiting to give them that promotion? What are you sitting on? Because they're going to leave if you don't. And then the turnaround cost, the replacement cost for that normally runs about one and a half times to maybe two or three times that employee's salary just to replace them if they voluntarily leave.
[00:19:51] So yeah, remote workforce, that's been a big challenge for compensation strategies. Like, do we need to pay people according to where they're sitting or do we need to pay them as though they're sitting at our headquarters? Because just because I decide to move to, I don't know, San Francisco, 'cause I'm in Columbia, South Carolina, by the way. Doesn't necessarily mean that I need a $50,000. I mean, I would need one based on the cost of living, but it doesn't necessarily mean that my employer has to give me that money for me to make the conscious decision to move to San Francisco. 'Cause I saw that a lot with people moving, just moving because they could, 'cause they were remote and they were just going to be remote for the rest of their career. So they'd rather live somewhere nice or fun or exciting, I guess. That's been a big challenge for employers.
[00:20:38] Wages not keeping up with inflation was a big deal. There's a whole chart that I share in my speaking engagement that you missed.
[00:20:44] Nicole: Okay. I missed it already. When are you speaking next? I'm coming. Send me your speaking calendar. Will you please?
[00:20:50] Jason Smith: Yeah, Charlotte, June the 18th in Charlotte.
[00:20:53] Nicole: Okay.
[00:20:54] Jason Smith: So yeah, wages not keeping up with inflation was a big deal. Now, wages did move up, so as inflation went up, so did wages, but wages were not keeping up with inflation. Employers were not fast enough on their reactions. And you never want to get into reactive compensation. That's not a good place to be when you have to just react to people leaving. Or if you have a lot of people leaving, a mass exodus. So, yeah, wages not keeping up with inflation. Big deal. Pay transparency is a big, huge, you know, part of anybody's compensation strategy needs to be, how transparent are we gonna be with our compensation? Now it's almost, it's an expectation of applicants and current employees to know what their range is. I'm sure that most people, when they look at a job posting on LinkedIn or Glassdoor or Indeed, if they don't see the range, they're just gonna pass it. And I tell people, I speak at a lot of local SHRM chapters in South Carolina, and I tell them all, if you're not doing it, start. You're limiting your candidate pool by not posting your ranges. And if you don't have ranges, call me. We can help you with that.
[00:21:59] Nicole: That's right. And here's the other thing, too. You post it, it's got the range on there. You interview this guy or gal and they're fantastic. And then I always ask on the phone screen, what is your salary requirement? What do we need to pay you for you to take this job? And then they're like, say the top of the range is a hundred thousand, and they're like 175. And I'm like, sorry, the ad that you applied to said 100. That is not even a possibility. So it just kind of takes the ickiness, I'm gonna call it, out of telling that person, that's just, that's not what we're gonna do. I'm sure you're fantastically talented, but that's not what we're going to do because we have this thing
[00:22:38] Jason Smith: Right.
[00:22:38] Nicole: called a budget, going back to internal equity. Trying to use all your fancy language.
[00:22:44] Jason Smith: But also job title inflation is rampant. There's a big gray area between business titles, like what goes on your business card and what goes in the HR, the HRIS system. Because a lot of people ignore what's in the HRIS and they just go with whatever they put on their business card.
[00:23:00] And a lot of times some companies drive off of that business title more than they drive off of the actual coded job title that fits in their job architecture in their system. And so if you're posting a VP of finance with a range of 75 to a hundred thousand dollars, well that ain't a VP of finance, right? So that's one of those tricky things like you were talking about somebody Yeah. Some, right? Yeah, and if you don't have a range posted with the VP of finance and they come in and they're like, well, I wanted $200,000 a year. And they're like no. This is a $90,000 job. Well then the company needs to change the title on the posting for sure.
[00:23:39] Nicole: Yeah, and I think there's some kinda weird thinking that people would be okay if they had a nice title. I mean, I don't know what that's about. It's a little dysfunctional, and it also discounts the VP role. I mean, that should be a very important, strategic role in the organization.
[00:23:57] Jason Smith: Absolutely. Yeah. Titles are free.
[00:23:59] Nicole: I think he's on his soapbox, everybody..
[00:24:01] Jason Smith: No, no, no, no, no. I haven't gotten up yet. But yeah, somebody said a long time ago, Hey, job titles are free. So if somebody wants a job title and I don't have to give 'em a raise and I can just call 'em a VP of whatever, then go for it. Not the best way to do it, but-
[00:24:16] Nicole: No, that's lazy leadership, I think. And so that's why you need employee performance management because if you are an accountant and you do want to be the VP of finance, there's a gap.
[00:24:25] Jason Smith: Yeah.
[00:24:26] Nicole: Let's get you working on this gappy stuff. And then when we have the VP of Finance available, boom, we'll go through our process our hiring process. And if you get it, then boom, you get the title, you get the pay. I mean that's really important. Getting that gap work done.
[00:24:43] Jason Smith: I could go on about it for an hour,
[00:24:45] Nicole: Okay. Well we'll have you back to talk about job titles. That's what we'll do. Okay. So where do you think compensation is headed? That's part two of that question. You know, the trends, you talked about that, but like where's it going? Where do you think comp's going?
[00:24:59] Jason Smith: Well, that's a good question.
[00:25:01] Nicole: Yeah, gonna have to be a futurist here. Get out your crystal ball.
[00:25:06] Jason Smith: I think one of the things that's evolved from all of this uncertainty since 2020 is really that employees now have the upper hand when it comes to negotiating their salaries. They're picking where they want to work, right? And maybe that's not the case in 2025, but it was in 2021, '22, '23. Employees were really getting to pick where they wanted to be. They got to pick their manager, which is the most important thing is to pick a good manager and hope that that manager doesn't get fired a month after you start, because that's happened to me.
[00:25:38] Nicole: Ain't that the truth.
[00:25:40] Jason Smith: I thought I picked a good one. But anyway, a lot of companies are starting to look at it from a total rewards approach. So some companies are offering customizable benefits packages along with pay. You can choose to get lower pay, but we can give you better benefits, right? So there's customizable packages out there. Not a lot of people are doing that, but I think a lot of people do like it. They like the ability to drive, like, you know what? I do okay, my wife makes really good money but we really need better benefits. Right? Or I need more PTO. So there are some packages out there that companies are starting to offer that give employees the flexibility to figure out what they want to make.
[00:26:20] Nicole: I think that's so smart because we all learned this in People 101 class or psychology class is that people are motivated by different things, you know? And I think at different parts of your life you need different things. So, when I was young, I'll work all the time, give me a lot of money 'cause I'm trying to buy a car, I'm trying to get a down payment together. You know, I'm trying to do these things in my twenties, but then now I'm 35 and I have two children. I need paid time off and benefits because these kids have ear infections or whatever the stuff is. Yeah. But don't miss this, everybody listening. I think if you're gonna have these flexible packages, you're gonna have to really be. You're gonna get Jason Smith's head and be very good at compensation. 'Cause now we've got lots of moving parts. Yes?
[00:27:03] Jason Smith: Yeah, and those would be really bigger companies that have their own compensation experts on staff, and their own benefits professionals on staff that are probably working together. Now, I've worked hand in hand right next door to benefits people throughout my career because benefits and compensation are so closely tied together.
[00:27:21] Nicole: So some trends definitely around flexibility and benefits and compensation, things like that. Okay. I love it. All right. Let's talk about pay transparency legislation and how it's impacting organizations. So first of all let's define it. What the heck is it? And then what's going on with all of our courts and our stuff and our government?
[00:27:41] Jason Smith: Well, it's at the state level right now. So, there's upwards of 20 or so states that have pay transparency requirements. Some of them define it a little differently than others, where pay transparency could just be the requirement to post your ranges and to divulge any ranges to your employees, to your current employees if they ask for it.
[00:28:02] But also pay transparency in some states includes the the part where you can't ask about their salary history. There's a salary history ban. 'Cause sometimes there are people, you know, when they're applying for a job or interviewing for a job and you ask the question, well, what are you making now?
[00:28:17] Nicole: Mm-hmm.
[00:28:18] Jason Smith: Don't ask that. Because there's some people that are in some disadvantaged situations already, and if you ask them what they make, let's say that it's an accountant, we'll just stick with accountant with a couple years of experience. And they were working somewhere that they were really underpaid, but they didn't really know it. So they were making $40,000, but you were willing to pay, I don't know, $70,000 for an accountant, but now that you know that they were only making 40, you can be like, well, let's give 'em 50. Let's do 50. That's good. Right? That's 10,000 more than you were making today. So salary history bans are really gonna be- I feel like that they should be part of all the pay transparency deals.
[00:28:57] California is the front runner when it comes to this type of legislation and then other states follow suit. But pay transparency's actually been a good thing for the consulting industry for sure. Because a lot of these companies, there's a lot of companies in pay transparency states that don't have a structure and they need a structure and they don't have the expertise to build a pay structure. So, it has fortunately created opportunities for us. Yeah that's how pay transparency is impacting it.
[00:29:25] And, again, when I'm doing these talks to these local SHRM chapters, I'm telling them to go ahead and start posting your ranges. But you do have to check a few boxes before you just start willy-nilly sharing your ranges. You need to make sure that they're up to date, that they're accurate, that you are benchmarking your jobs to third party salary surveys and that you've got good market data and you need to feel really good about 'em. And not just going up and looking to see what other accountant postings on LinkedIn have as a pay range. That's just not great. That's not a great way to do it. Again, it's free, so you get what you pay for.
[00:30:04] Nicole: All right. That's twice. Are you writing this stuff down, people? Very good. All right. So Jason is gonna tell us in a little bit, how do we get good data? He's gonna work that into the conversation, so just hang in there.
[00:30:15] All right. So what advice do you have for human resource teams preparing for pay transparency laws? So, let's say that my state doesn't have this yet, how do I get myself prepped so that I could get ahead of the eight ball?
[00:30:32] Jason Smith: Well, first of all, act as though it's already here. So many employees and so many remote opportunities that are offered out there right now, go ahead and just do it. But again, you need to be confident in your ranges and the ranges that you have assigned to your jobs because it's going to do you a disservice if you post bad ranges out there. You're not gonna get good applicants. If your ranges are too high, you might get applicants that are too good and then you're like, oh, wait, we can't afford that. We didn't mean to, to post it that way. I tell everybody, again, to please try and pick one salary survey to participate in every year. You don't have to buy it, participate in it, give them your data. Give these trusted third party survey vendors your data. Because it helps everybody in the long run. Gallagher does that. Gallagher has a national compensation survey, a general industry survey. We also have a ton of healthcare specific surveys, but then there's the Mercers and the Willis Towers Watsons out there as well. There's aggregators like CompAnalyst is a salary.com product. And that's why I said earlier, the free thing you get on salary.com, you know.
[00:31:37] Nicole: It's free. And so you get what you pay for, people.
[00:31:41] Jason Smith: Right, but their CompAnalyst system comes with this entire library of jobs. They have 10 to 15 people that spend their days matching the jobs in this job catalog to all of the surveys. Now, they can't say which surveys, they just say most of the surveys. So that's your more budget friendly option if you need market data. But really you need to be buying at least one source of data. And I know there's a lot of nonprofits that are really small, don't have the budgets for it. But you have the budget to replace a lot of people at one time?
[00:32:15] Nicole: Lay it on us. If we were gonna have this, is it like once a year, we get the report and that's what we use for the year. And then we do it again. So it's like it needs to be a line item in our human resource budget. Is that what I'm hearing?
[00:32:27] Jason Smith: Yeah, absolutely. Yeah. It needs to be a line item in your budget every year. And it's one of those things where you can, i, if you purchase it one year, maybe you can wait till the next, till the two years from then. So you can buy the 2025 and then the 2027, and then in 2026 you would just take the 2025 data and age it forward appropriately. So I mean there's a lot of labor market conditions out there, mainly around the employment cost index. And we have tracked that at about 3.3% is what Gallagher has predicted salary planning budgets would look like for 2025. They were up to 5.2% in 2022. And that was really your merit budgets. Yeah, because people were reacting to all of the cost of living, the inflation, people leaving, the great resignation. So companies were really reacting quickly to all of that. But now, 4% was the average merit budget last year. And now we're down to, we've projected about 3.3 to 3.5% for this year. So things are getting back to normal, but then it begs the question, does a three point half percent merit budget really move the needle? Can you differentiate performance well with a budget that small?
[00:33:39] Nicole: I don't know if you can tell me or not, but is this a thousand dollars purchase? Is this a $10,000 purchase? Is it a $25,000 purchase to get my hands on a compensation survey that I can really use as good data? So if I'm the HR manager or director and I walk into my CEO and I'm like, Hey, we gotta get a structure in place, we gotta get our ranges in place, we gotta have our act together, you know, so we can hire good people and be safe and not have a problem with pay equity. Right? And so, I need this piece of data plus it's gonna help you, C-suite people.
[00:34:16] Jason Smith: Yeah. And on the low end, really, you're looking at 5,000 bucks. Now if you get like a little boutique survey like one that's fairly regional to your area, you can normally get those for a lot less. I know I saw a construction survey out there the other day that one of my clients uses and I think it's like 600 bucks.
[00:34:35] But that's a very small piece of the pie. You're missing out on a, you're getting good construction data. But what about your corporate jobs? What about your IT jobs? What about your HR jobs? For those jobs, you really need to be looking at general industry surveys, which are a little bit more, and they can run from 5,000 up to 15,000 for one of the good ones.
[00:34:55] Nicole: Yeah. I just think it would pay for itself.
[00:34:58] Jason Smith: It would, but that's the other thing.
[00:35:00] Nicole: You're gonna make a $5,000 mistake or not. Right?
[00:35:04] Jason Smith: Right. And then there's other advantages to engaging with a consultant. We spend a ton of money on salary surveys every year. So we have a lot of them. So that's one of our plugs is that, we buy it so you don't have to. So that's another option as well.
[00:35:19] Nicole: Very good. Very good. I love that.
[00:35:21] Announcer: Are you ready to build your vibrant culture? Bring Nicole Greer to speak to your leadership team, conference or organization to help them with their strategies, systems, and smarts to increase clarity, accountability, energy, and results. Your organization will get lit from within. Email her at nicole@vibrantcole.com and be sure to check out Nicole's TEDx talk at vibrantculture.com.
[00:35:47] Nicole: Okay let's talk about this, too. How can human resource professionals talk about pay in a way that builds trust? And everybody, pencils at the ready, because we want to know how to do this. I mean, I think we decide to get into HR and we have a fear of the compensation conversation, the CC, right?
[00:36:07] Jason Smith: Mm-hmm.
[00:36:08] Nicole: We have a fear of this thing. And most HR people are sweet and nice and kind and loving and care. And so telling people bad news or something they don't want to hear, it's not our favorite thing. So how can we do that?
[00:36:21] Jason Smith: Well, I mean, hopefully you don't have a lot of bad news to share when it comes to compensation conversations, but ideally you would want to push those down to the managers to have those conversations, right? So HR's role is to train the trainer or to train the managers to have the conversations. Teach them how to be transparent, give them the data that they need in order to have these conversations. Compensation people are normally responsible for the job architecture of the company, which is building job ladders for people, career ladders, career opportunities, development opportunities within jobs. Like going from account executive 1, 2, 3, 4.
[00:36:59] Nicole: Right. Love it.
[00:37:01] Jason Smith: So either way those are just some things to think about. Be able to communicate good development, career ladders for everybody. 'Cause that's what keeps a lot of people around. If they don't see a path in front of them, they're gonna go where they do see a path. So that's kind of a big deal. But, yeah. I don't recommend HR professionals having the conversation. I recommend them training the managers to have the conversation.
[00:37:24] Nicole: Oh, that's my favorite thing I've heard in this whole conversation. You don't have to do it, you just have to train the trainer. And here's the thing that I think is imperative is that you have a little university that's interior to your organization. And one of those things is HR compliance; you need to be training all your managers on HR compliance and need to understand the Disabilities Act and Fair Pay Act and da, da, da. Right? And then number two on compensation. And how do you have the compensation conversation, the CC as we're gonna call it.
[00:37:53] All right, so we've gotten through kind of like what's going on, the equity, the transparency, all those things. But let's get tactical and practical now. So how should an organization decide when it's time to conduct a compensation benchmarking study? Say that five times fast.
[00:38:11] Jason Smith: Yeah we spoke about reactive compensation before. So a benchmarking study is normally what we do. A spike in voluntary turnover. Like that could be one of the things that causes a need for a benchmarking study. Like, oh my goodness, we just lost 10 people and we've got 200 people. So, we have to replace all those people, but we also need to make sure that the people we're bringing in are paid to market. So spikes in voluntary turnover. Difficulty in attracting or recruiting people. If you're hitting walls when it comes to recruiting and attracting, that means you might need a case study. And then engagement survey results. Now, I would say the majority of engagement surveys have compensation as one of the biggest opportunities. 'Cause nobody makes enough, right? Nobody makes enough. Yeah. So, that, those are three reasons that stand out to me as reasons why clients came to me.
[00:39:06] Nicole: And I think too that a lot of times people are suffering inside their organization. It's like, we've had this job open for six months, and I'm like, why? Why has it been open six months? So you have to go through what are we doing to address this? And compensation is one of those things. We need to take a look at why this thing is sitting empty for six months. There's got to be something more than just, it's hard to find these people, right? We need to understand who these people are, what they make, what they do, what should be on the quote unquote job description. So, you know, don't suffer. Get some help figuring out why you can't fill it.
[00:39:42] So the next one is, what tools or data sources do you recommend for setting salary ranges? Now, we just talked about all those surveys is are there other tools and data sources that we can get our hands on?
[00:39:53] Jason Smith: Yeah so I mentioned CompAnalyst was a salary.com product and I've used them throughout my career. And it's a great system for managing stuff but all of these, CompAnalyst, CompTool, BetterComp, MarketPay, Payfactors, like these are all things that essentially do the same thing. Some do it better than others for sure. And they all look different, of course, but they give you a platform to upload your survey data that you purchase, upload your jobs information, upload your people information, and be able to match your jobs to the survey jobs within that tool to build a composite for what that job is worth. And then once you do that and you have your people in there and what they make, then you can start doing some analysis in these things. So that's one of the first things that I would recommend. Now, you normally don't see a nonprofit with a hundred employees with a need for this, right? They can pretty much keep up with a hundred people in the spreadsheet.
[00:40:53] A lot of them will have the smaller, cheaper versions of HRIS systems to house all their employee data. But I've always been at companies with at least 5,000 or more employees. So we've always had a need everywhere I've been to have one of these market pricing software tools.
[00:41:09] Again, the third party salary surveys. And it's important that these are third party salary surveys because you don't want employee reported data. These are surveys that survey the employers to give them their employee data.
[00:41:26] Nicole: Wait, repeat that. This is not a bunch of employees on Glassdoor saying how much they make. This is the HR director consciously participating in a survey in hopes that he or she will get accurate data back, right? It's a reciprocal thing. All right, that's a huge thing to point out.
[00:41:45] Jason Smith: Yeah, and it's important to participate because you get a huge discount as a participant with any survey that you purchase. Otherwise they're really expensive. So
[00:41:53] Nicole: And that might be your next right step. If you're listening to this, figure out which survey you need, like Google it up, and then say, Hey, how do I participate? That could be your next right step.
[00:42:05] Jason Smith: Yeah. And then as an even cheaper option, there's ERI, which is the Economic Research Institute, and I really need to call them and let them know that I'm plugging them all the time.
[00:42:13] Nicole: You do, you need a little kickback! Wait, we didn't say that, did we?
[00:42:19] Jason Smith: But yeah they're kind of the standard when it comes to cost of labor data. So that's a big thing for national companies that have multiple locations. They need to know what the cost of labor in Spokane, Washington, is versus Columbia, South Carolina, compared to the national average. So that is the standard for us. It's a very inexpensive tool and it also has some survey data because it aggregates some surveys and BLS data in it by job. So if you need to go find out what a job makes or what a job should make or what the range of values for that job is, ERI is a good budget option for anybody like that person, in HR for a hundred people. It's it's a great option there.
[00:43:03] Nicole: Tell us what the letters stand for again.
[00:43:05] Jason Smith: Economic Research Institute. Yeah, that's a good one. And I don't get any kickbacks from that.
[00:43:10] Nicole: No, we're just having fun, people, relax. Okay. All right, so here's our next tactical and practical question. How do you structure compensation conversations with employees who are underpaid based on market data? Ugh, we want to know the answer to this one. Please help us.
[00:43:29] Jason Smith: Whose market data is it? You know? Or as my friends in Australia say, whose market data is it?
[00:43:34] Nicole: Oh, we were having a whole conversation about the Australians. If you're Australian, leave us a love note. We love you guys.
[00:43:41] Jason Smith: We do.
[00:43:41] Nicole: We don't want you to stuff up your compensation. Go ahead.
[00:43:45] Jason Smith: Right. I remember a time when I was at the hospital system and the leader for the physical therapy group came to me and said, Hey, my folks just came to me and they brought this publication that was like the Physical Therapists today, or whatever it was. It's some association. Well, that publication had some market data in it. "Market data."
[00:44:05] Nicole: Ok, that was in air quotes for you listeners.
[00:44:08] Jason Smith: Oh, right, yeah. I gotta keep remembering. So, yeah, it was it was one of these things where they came in and said, Hey, this thing says that we should be making $90,000. Now, granted, this was back in probably 2009 or 2010, right after the recession and everything. And companies weren't giving increases as freely as they used to. But they came to them and really again, it's an employee reported survey finding in this publication that they brought to them. So they asked me to get in front of these Physical Therapists and explain to them
[00:44:37] Nicole: Oh, fun!
[00:44:38] Jason Smith: Why that data was meaningless or why we couldn't use that. Because when I'm looking at what employers reported, I'm coming up with 75,000 for an entry level Physical Therapist. Granted, this is a long time ago. They're making a lot more money now. So yeah, just because an employee comes to you and says, Hey, look at this thing I got on salary.com. I'm way underpaid. What's going on? Gimme a raise. That's the explanation you need to give them. Now, a lot of companies may be that far behind, right? So I don't know if you can structure those conversations because they just happen. They just show up and knock on your door, or they just randomly call you on Teams, without the little preface thing, hey, do you have a minute?
[00:45:20] Nicole: Yeah. If you're gonna ask for a raise, you should be kind. Write that down. And easy going with your HR guy or gal, they're trying as hard as they can. That's what I think.
[00:45:29] Jason Smith: Absolutely.
[00:45:29] Nicole: Yeah.
[00:45:30] Jason Smith: Yeah.
[00:45:30] Nicole: And so I don't know what you think about this, but I really encourage HR people when I am talking to them, I'm doing my talks. If somebody says, I'd like to make more money, say this: wonderful! We would like you to earn more money. I mean, 'cause that is the truth I think for most organizations. You don't need to be scared of that conversation or say, oh, we're not doing raises, you know, like keep it positive out of the gate. Because really again, back to employee performance management, if we can get you to learn these things, then there'll be an opportunity for you to make more money, right? And then, is this true too, Jason, we can say, you know, let me do my research. Exactly what we're talking about and let me get back to you and I'll get some data points and we'll pore over it and take a look at it and see where we're at. What do you think about that?
[00:46:17] Jason Smith: That's a good way to approach it. I have tried throughout my career to not necessarily divulge how I got to some numbers, right? That's the thing that creates more questions. Oh, well you matched it to this thing. I don't think that's what I do. It creates more questions than it answers. So be careful in how transparent you are when you're sharing how you got to the numbers that you got to. Now you can say, I did the research. It's still this pay grade and based on your experience, this is where you fall in the pay grade. And we feel good about it and we have to worry about 5,000 other employees being in the right position in their range. And we feel pretty good about that as well. And again, it all depends on if it's a very strong performer or if it's a mid-level performer. Maybe if it's a flight risk, maybe you do need to do something about it, right? A flight risk from a strong employee. But yeah, I always try not to divulge too much of the detail because it just creates more questions.
[00:47:15] Nicole: I love that. I love that. Okay. And then the other thing that just popped in my little brain over here, Jason, is this idea of competencies. Most organizations I work with, they don't have a solid set of competencies for a position, where the competency has been laid out into, four levels or something like that. And it takes a tee ton of work to get that structure in place. Like we're talking about salary ranges right now, but then within the salary range there's this thing of competencies and how good you are at those particular competencies. And then throwing in experience. It's a little messy. But how important is it, or how do I go about getting started maybe? This is a bonus question. I'm throwing
[00:48:01] Jason Smith: Yeah. Yeah.
[00:48:01] Nicole: Jason into the wild blue yonder here. Is that an important thing to do? To start figuring out the competencies inside each of the roles that I have? The jobs?
[00:48:11] Jason Smith: I've been at one place where we did get into the competency conversation and we put it in the job descriptions. Every job description had a list of core competencies that each job was expected to be, I guess. It's one of those things where it might be getting a little too fancy depending on the size of your organization. You know, like a Google has the capacity and a gaggle of compensation people to work on that.
[00:48:37] Nicole: That's more than one.
[00:48:38] Jason Smith: Right? Yeah. Yeah. That is more than one. So yeah, and it's fine for them if they have the capacity and the bandwidth. But again, the HR leader for a hundred employees doesn't have that kind of capability at all. I mean, and it's nothing against them, it's just, it takes time.
[00:48:56] Nicole: Gotta get payroll done and talk to somebody who's unhappy and talk to the VP who's trying to hire somebody. Yeah, there's a lot of things on our list.
[00:49:05] Jason Smith: Yeah. And so competencies can drive performance for sure. Like you can make that a part of their performance evaluation if you need to. And then again, I guess it would tie into pay if their rating determines what their increase is gonna be. I haven't seen that in action a lot.
[00:49:22] Nicole: Yeah, I think we talk about it in HR circles, it's in our HR certifications. We talk about competencies all the time. Like you said, maybe the Googles and the Bank of Americas and the Citi Banks and the whoever's have that stuff dialed in. I often tell people, if you're gonna work on competencies with pay, pick the most important like frontline customer service person, like what do they have to be able to do before you can pay 'em a little bit more? You know? 'Cause those are the jobs that you need to kind of pump those people up so you can get 'em into leadership someday. So start with one and try to figure out what's going on there. It's the structure that Jason's been talking about in this whole thing.
[00:50:00] Jason Smith: Yeah. And we mentioned, and I'll give them a plug just because I worked with it firsthand, is when we worked with Quint Studer, the Studer group, at the hospital system I was at. It really did bring to the forefront how important these competencies are. Accountability being one big one for sure. For everybody.
[00:50:19] Nicole: Oh yeah, you talked about how that was an accountability culture, 'cause we're trying to build a vibrant culture here. Will you tell that same thing that we talked about offline?
[00:50:28] Jason Smith: Yeah, I was becoming a leader at the point when we were doing it. Like they had already been through the transformation, but everybody had to go through the training. But I think it's important with performance evaluations to not let it be a once a year thing. You don't want to surprise anybody and say, Hey man, you're not cutting the mustard. They just found out after a year that they're not cutting the mustard? Like you didn't tell them before? So.
[00:50:49] Nicole: And now they're not getting the raise. See all this works together?
[00:50:53] Jason Smith: So not, yeah. Not getting a raise should not be a surprise and getting fired should not be a surprise. One of the things they pushed really hard on was monthly rounding with all of your employees. So every frontline leader who had people directly reporting to them had to spend 10 minutes every month with every employee.
[00:51:10] Now that was harder for some people to do and they could delegate. Yeah. But it was important to make sure that everybody was on the same page year round. So they would ask five questions every month. I can't remember what they were. But one of, yeah, one of them was like, what's working well? What's not working well? Is there anybody you'd like to recognize for appreciation or anything like that? And then there were two others. But yeah, it was a really good environment and it really was hardwired into the organization, especially with the accountability. The thank you notes. Handwritten thank you notes became a requirement. Yeah. Yeah. Handwritten thank you notes became a requirement. Every leader in that organization- now, there were probably about 12,000 employees in the organization at the time, and probably about a thousand people in leadership roles- but they had a quota every month of three thank you notes that they had to write to whoever they felt they needed to thank. And I still kept all mine. Like I've got mine still that yeah, they really are. So yeah, I, it's accountability, being appreciative, being grateful constantly and being on the same page year round, like letting people know where they are constantly.
[00:52:21] Nicole: I love it. I love it. Okay. All right, so let's jump back into our compensation. We went down a little bunny trail on competencies. It's all my fault, but please get out your pens and paper and write a thank you note today to somebody who is doing a good job for you. It's probably not maybe the same as getting a raise, but it sure will feel good to them if they get the note.
[00:52:39] All right, so how should compensation strategies differ for executives versus frontline employees? Because we've all heard stories out there all the time about how the CEO is just getting this ridiculous bonus and all these things. So what are your thoughts?
[00:52:54] Jason Smith: So really for executives versus frontline employees, it's gonna be a long term look for executives because retention is key at that level. Like you want to maintain stability at the top of your organization. So C-suites, VPs, even directors and senior directors in some organizations. They put 'em on a long-term incentive plan, which measures their performance or the company's performance, whatever the metrics are that they decide to go with over a span of three years. Some will pay at the year marks, they'll pay a portion of it, or some will do, I think it's cliff vesting? Now i'm not an executive comp expert, but some will pay at the end of the three years and you've got to stay the whole three years to get a piece of that or to get the whole thing. So that really drives retention at the top because that's really important.
[00:53:37] For frontline employees, it's more nearsighted. It's shorter term. So frontline employees, even your non-exempt, your exempt. They're up for bonuses at a lot of organizations that pay annually, right? They pay annually based on the performance of the company. Maybe a mix of their individual performance at the same time. And if we're talking about compensation strategies. So that's one piece of the strategy is how frequent the payout is. The other one is where are you gonna look for these people? For executives, you're gonna look nationally, right? You want to look all over the country for somebody that can come run your organization.
[00:54:11] Nicole: Right, or even the world, right?
[00:54:12] Jason Smith: Right. If you're a company in Columbia, South Carolina, you're not going to just cast the net over Columbia, South Carolina to find an executive. For sure. Sometimes the smaller employers will do a regional look, like they don't necessarily need to find somebody from San Francisco to come work in Columbia, South Carolina, which might be a hard thing to sell anyway.
[00:54:32] But and then your frontline employees are gonna be more localized, right? So for bank tellers, you're gonna be looking in Columbia for bank tellers. Same for accountants. Well, and as you go up, I mean, you may do a regional look for accountants. If you have an accountant job that is a remote job, you may cast that net nationally. But for the most part, you're casting a wide net for executives. You're casting a small net for lower frontline jobs. And then for executives, you're really looking at other similar sized companies. So say like, I don't know, chain of restaurants. Yeah. So let's say there's a Denny's that's just in South Carolina, that's the whole company is just in South Carolina, and they're looking for a CEO. And it's small. Let's say they do $50 million in revenue every year. Well, you need to go looking for people at other companies with similar sized revenues. You're not gonna be getting anybody from Walmart coming to apply for this job. You're not gonna be getting anybody from Darden or Brinker International, some of the bigger corporate restaurant chain companies. And in healthcare too. You know, a little individual hospital in Columbia doesn't need to be searching for a new CEO at a huge hospital system like Ascension Health, right? That's a billion, billion, billion dollar company. They're not gonna come. So, yeah, so it's revenue specific, size specific. The number of employees are specific. But for frontline employees, the size of the company they're coming from, doesn't matter.
[00:55:56] Nicole: Right, right. Absolutely. Fantastic. And here's another thing that's like all the rage out there is AI, artificial intelligence and data analytics. So how do you see this playing a part in compensation?
[00:56:09] Jason Smith: Well, I'll be honest, it's created a little anxiety amongst compensation consultants. Well, yeah, because AI can do a lot of cool things. But again, you know, ChatGPT is free. I won't say it again.
[00:56:21] Nicole: Don't miss that.
[00:56:23] Jason Smith: Right, right. But I honestly don't think that AI is ever going to replace the need for human interaction or intervention with compensation planning. It was like the top topic at the World at Work conference last year. Like every other session was about AI. And World At Work is the Total Rewards Association. It's comp and benefits professionals from all over the world. They have about 2,500 people at their conference. But yeah, it was a big thing last year. A lot of people were sweating about it, you know, but I don't think it's ever gonna be a replacement. There's too much subjectivity that you can't program into AI that needs to be done to do what we do.
[00:57:02] Nicole: I would agree. I got asked that the other day about my training. Like, Nicole do you think that AI could replace you? And I'm like, no, never. AI needs a prompt, first of all. And you need somebody who can interact, be quick
[00:57:18] Jason Smith: Mm-hmm.
[00:57:19] Nicole: Right? And somebody with a sense of humor and somebody with empathy, because humans are sentient beings. We've gotta have the feels and here's the thing. We talk about hiring and about it being fair and equitable and all of those things. You do have to use your humanity for interviewing, talking to people, assessing. All that is human activity. So AI is a great partner, but not a replacement. That's how I feel about it.
[00:57:46] Good. All right. So what role does compensation play? Okay, this is happening left and right in mergers, acquisitions, and organizational restructuring. Holy mackerel, if you're going through that stuff, first of all, let's have a moment of silence. Okay, keep going, Jason.
[00:58:04] Jason Smith: Especially if you are the the acquired and not the acquirer. That always,
[00:58:08] Nicole: And you're the HR guy or gal? Oh my goodness.
[00:58:11] Jason Smith: So compensation plays a pretty big role. And again, if a company's merging and or acquiring other companies, then they probably have their own compensation people on staff. But we play a pretty big role when it comes to making everybody at the company that you're acquiring look like your people from a job title perspective. Because I mean, I had a client last year, they do a lot of acquisitions and they acquired this little mom and pop that does work similar to what they do, but they acquired them and it was probably about 30 people in the shop. And I think everybody was a VP.
[00:58:44] Nicole: Oh yeah.
[00:58:46] Jason Smith: They, they weren't. Yeah. Right. So then you have to fit everybody in because there's already people at the acquiring company that do the jobs that these people that you just acquired do. So when they come on and they're like, well, wait a minute, I'm not a VP of business development anymore? I'm an account executive now. Yeah, you are. That's what it is. Again, if you feel the need to put stuff on your business card or give your employees the freedom to put whatever they want on their business card, that's on you. But yeah, we play a pretty big role in that. I remember when I was at the hospital system and we acquired a small community hospital from my hometown, I had to go in there and work with all the leaders to show them, here's our job titles. We need to work together to put your people in our job titles. And we also ended up having to pay about $5 million to get all those people up to market in that small town hospital because they had failed to stay on top of that. But it was a small town. The closest big city was Columbia, about an hour away. So for years there were people that had been there working and didn't realize that the market had moved around them. And that they could be making way more money somewhere else until somewhere else acquired them and said, Hey, you need to be making more money. So yeah, we play a pretty big role in, in any mergers and acquisitions. It's really messy around executives, you know, when you're acquiring executives from another company. But yeah, we do play a pretty big role in that.
[01:00:10] Nicole: Fantastic. Fantastic. Okay. All right. So bottom line on that is you need some help. And maybe you're thinking, you know, he's a consultant. Sometimes you need somebody who has the expertise that you don't. That's what I know. I mean, in my own business, my own career, I've always gone to other people. I'm like, you already do this. Teach me, tell me. That's how I started out. I'm like, Jason, teach us. That's what it's all about. All right. Well, we are definitely at the top of our hour and I know that people are like, wait, I want to know more. I have more compensation questions, but we've gotta bring it to a close.
[01:00:43] So I've got three little goodies. First thing is Jason, what's one compensation myth that you'd love to bust? You're just like, this is just silliness.
[01:00:53] Jason Smith: I might get some flack for this, but
[01:00:55] Nicole: Uh oh
[01:00:56] Jason Smith: Merit increases are not gonna get anybody where they need to be over time. And it's almost as if staying with the same company for years and years and years, like our parents did, you know? 'Cause it used to pay off. A lot of them had pensions.
[01:01:10] Nicole: Right. They got a big fat check, and a watch.
[01:01:13] Jason Smith: Right, right. And, and they got to ride the stock market, even though the stock market had a couple of dips in the, eighties and nineties, it all just kind of came back. But yeah, I think merit increases, honestly, with companies budgeting three, three and a half percent, even 4%. I just don't think it's a good way for companies to manage people's pay over time. I think you need to do a market adjustment process somewhere in there where you're getting people to the appropriate place in their range based on their experience. So, you can keep doing merit increases, that's fine, but people are not gonna stay long term saying, well, I'm gonna get a 3% merit increase every year, so I'm gonna stay here for 20 years. There's too much pay transparency. People know how much they could make at other places right now. My myth is just that a lot of people lean on those merit increases and they're so proud of those budgets, but it's not moving the needle for anybody.
[01:02:10] Nicole: Yeah. And here's the thing, do you want excellent people who really want to work and do it? And if they are that mental model, then they know what's going on in their industry. They know what people are getting paid. I mean, if somebody's an eagle at their work, they're in Eagle at this other stuff, the research and all the things that they should be doing. So they're just smart everywhere. Don't miss that. All right. So what's the best advice you've ever been given? So we're gonna flip the table. What market compensation Guru gave you a piece of advice that you think is so good?
[01:02:43] Jason Smith: You get what you pay for.
[01:02:45] Nicole: Oh.
[01:02:45] Jason Smith: That's it. I know I already said it three times, but you get what you pay for and that was something from my dad, actually, that I heard, so a long time ago. And it makes so much sense. You don't pay enough, you're gonna have people leaving. And if you do pay well then you're gonna have people staying and you're gonna have people bought in and you're gonna have people that stay for a long time. So
[01:03:07] Nicole: Yeah. And those are the people that help you scale,
[01:03:10] Jason Smith: yeah,
[01:03:11] Nicole: and that's what you really want to do. That's another one hour podcast. How to scale your business.
[01:03:17] Jason Smith: Mm-hmm.
[01:03:17] Nicole: Have great people. That's absolutely huge. All right. And then finally, here's our last question. If human resource professionals take away one thing from this conversation, what would it be? Bottom line this whole thing for us.
[01:03:31] Jason Smith: Don't try to do it all yourself. Ask for help. That's it. I've run into a lot of people before who think they know everything and then they get overwhelmed when they get into it and realize they don't. And that's okay, but it's also okay to ask for help.
[01:03:47] Nicole: Yeah, absolutely. Yeah. We can't do this life alone. It's this thing called teamwork. It makes the dream work. All right, so if you want to get a hold of Jason Smith where can we find you? You're on the LinkedIn right?
[01:03:59] Jason Smith: Yeah, I'm on the LinkedIn. Yeah, it's but my username is compenjason.
[01:04:04] Nicole: It's compenjason. And then of course, where can we find you in terms of where you're at? You're at Gallagher, so tell us about that.
[01:04:11] Jason Smith: Yeah, I'm at Gallagher. I've been here for a year and a half now. Again, I'm based in Columbia, South Carolina, but my practice is based in Richmond, Virginia. And all of our consultant are remote for the most part. But yeah, this is the best move I ever made. I've really enjoyed the consulting side of things now. One of the reasons I chose consulting or consulting chose me was that I spent years telling people what to do, how to do things, how to maintain pay equality and pay equity throughout my career. And I guess I just cared too much because they, not everybody, but a lot of times it wouldn't happen. People wouldn't listen to the advice that I was giving them. And that was frustrating for sure. But you know, now that I'm in consulting, I get to tell people how they should do things and if they do it, then that's great. And if they don't, I won't know about it.
[01:05:02] Nicole: One arm removed. That's absolutely right. Yeah. And here's the thing. If you worked at the Applebee's in the way back you're passionate about customer service, passionate about getting it right. And just in general, probably a passionate, fun loving, knows how to make a great margarita kind of guy. That's the deal.
[01:05:19] Jason Smith: Bahama mama. I made a good Bahama mama.
[01:05:21] Nicole: Okay. Very good. All right, well if nothing else, look up Jason. He'll make you a cocktail in Columbia, South Carolina. All right everybody. That's been another great episode of the Build A Vibrant Culture Podcast. Go down right now if you would and click like, and leave Jason a love note. Tell him that you're grateful for his time and his energy. And just know Jason, that I'm grateful for your time and energy. Come back next week on Wednesday. We'll never have another episode of the Build A Vibrant Culture podcast. Thanks so much for being on the show, Jason.
[01:05:51] Jason Smith: Thank you for having me.
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