The military pay stub habit that changed her HR playbook

Show Notes

Summary
Stacie Phylicia, Chief People Leader at Strategic People and Business Solutions, LLC, joins host Kelsey Willock Jones on Beyond the Paycheck to trace twenty one and a half years in the military into a people strategy built on one habit: every leader sat down with every soldier and walked through the pay stub, line by line. She argues that supporting the whole employee is not the size of your benefits catalog, it is whether the boring infrastructure, pay, defaults, time and access, works for the person who never opens the catalog. She walks through the automatic enrollment experiment that lifted every metric and still landed wrong, because a manufacturing workforce that qualified for state benefits had never come to work for benefits in the first place. She also describes building an HR AI agent with a cohort of twenty HR executives, and why the first question she had to ask them was not a technical one. Built for CHROs, total rewards teams, and benefits leaders who want a sharper test than engagement metrics for whether a program actually worked.

Chapters
00:00 Introduction
00:41 Twenty one years in the military to Chief People Leader
02:11 A first paycheck at Hardee's and half of it gone
04:25 What the military pay stub taught her about leading people
06:53 AI brings a tool, it cannot bring the person
08:13 Benefits built for an employee who is not there
10:17 The real scoreboard: hardship withdrawals and skipped care
11:28 The automatic enrollment experiment that backfired
15:17 Building an HR AI agent with twenty executives
18:35 The death of job based pay

Takeaways
- Supporting the whole employee is not the size of the benefits catalog, it is whether pay, defaults, time and access work for the person who never opens it.
- Audit your defaults before you change them, because the power of default comes with owning every outcome it produces.
- Engagement metrics on benefits communication can look healthy while behavior does not move, so measure whether the distress signals reverse instead.
- Not everyone comes to work for benefits, and a workforce that already qualifies for state coverage will read automatic enrollment as something taken rather than given.
- Before building an AI agent, make the company say what it is actually solving for, because most have not decided and one ask usually hides several.

Connect with the Guest
Stacie Phylicia LinkedIn: https://www.linkedin.com/in/staciephylicia01/
Company Website: https://strategicpeoplebusinesssolutions.com

Sponsor
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With AI-powered insights, it takes the guesswork and busywork out of comp decisions, helps you spot pay equity gaps early, and makes it easy to model scenarios that keep your teams engaged and your budgets on track.

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What is Beyond the Paycheck?

Beyond the Paycheck brings you candid conversations with CHROs and top people leaders who are rethinking how compensation and benefits impact more than just employee bank accounts. From the first paycheck to financial wellness programs, we explore how money shapes identity, equity, purpose, and power at work, and how forward-thinking companies are using pay and perks to transform lives, not just attract talent.

This podcast is sponsored by Aura Finance, the financial wellness platform designed to help employees feel confident, secure, and in control of their money.

See more at aurafinance.io

Beyond the Paycheck - Stacie Phylicia

Kelsey Willock Jones: Welcome Stacie Phylicia, Chief People Leader at Strategic People and Business Solutions, LLC. We're so excited to have you on today. To kick us off, I'd love for you to introduce yourself, sharing a bit about your current role, your career and background, and where you're calling in from today.

Stacie Phylicia: Hey Kelsey, thank you for having me. I am Chief People Leader for, as you said, Strategic People and Business Solutions, LLC. I started my career a long time ago. I did do twenty one and a half years in the military as an IT professional and also HR, ending my career in HR. I came out into the corporate world. I have completed assignments with Bank of America, Accenture, and Charter Spectrum, and here lately Samsung. And now I am also a John Maxwell leadership coach, speaker, and trainer. I'm also a DISC leader as well. So I go into businesses right now offering all of my services to help teams improve teams, innovate teams, move people to that next level, and just focus basically on the people strategy part of the team where we're losing most to AI. But I'm bringing the human back into human resources.

Kelsey Willock Jones: Which I absolutely love to see. And thank you also for your service. It sounds like you have such a decorated background. So I'm excited to learn so much more about your experience.

Stacie Phylicia: Yeah, my pleasure.

Kelsey Willock Jones: But before we get there, I want to take a step back further into the past. Can you tell me a little bit about your first job ever, and if you recall what you spent your first paycheck on?

Stacie Phylicia: Wow, my first job was actually at Hardee's, and it was this little town in a place called Winnsboro, South Carolina, right outside of Columbia. And if you close your eyes when you're riding, you're gonna miss it. And there I was a cashier. And what I learned about being a cashier is that I was a cashier, a sweeper, a parking lot, a bathroom cleaner, and also the counting of money at the end of the night, and that included inventory as well.

I signed my first paycheck, which was around, I think back then I remember the minimum wage was like three dollars and forty five cents an hour. I had about fifty some dollars or whatever, and I was so excited. I went to cash that check at this place called South Carolina National Bank. They were bought out by Wachovia and all those. It just evolutionized over all of that.

But I just remember going into the bank with my mom, and she was saying, You're gonna have to sign it yourself. And I'm like, Okay, I wanna sign this. So I go to signing it and everything, and the lady was giving me my money back, and I look at the money and it was not the same amount that my check was. And my mom looks at me and goes, you have to leave some in savings. I'm like, what? She said, That's what we were doing, opening your checking account and savings account. So you only get half of that. And I was like, my gosh, I only got twenty dollars. I worked all these hours and I only got twenty dollars. Heartbroken. But I do thank her to this day, because that was my first bout of how to save money.

Kelsey Willock Jones: It's also a lesson that we all learn at a very young age, that your first paycheck and what you think you're gonna make is very different after Uncle Sam dips their fingers into it.

Stacie Phylicia: Yes. Because hey, the conversation behind who is who. I remember asking her this question, who is FICA? And she goes, What? I said, Who is FICA? Why is he taking all my money? I don't wanna pay him. She goes, Well, welcome to the world. You do have to pay him. So she explained all that to me and everything. And so it was just, you know, deja vu listening to my kids when they got their first jobs and they were like, Why do I need to pay social security? I'm not even. Yeah. You're gonna get there.

Kelsey Willock Jones: It's a very good question. It is a very good question. How do you think your earliest money memory, whether it's your first job or even early conversations with your mom about FICA, has influenced how you think about showing up for your people, making decisions in terms of pay and benefits and beyond?

Stacie Phylicia: So what I have learned, and with speaking with different people in different industries. So as I stated before, I was in banking. So banking, you know, you have a lot of people that have already been to college, they have this education, they're actually in banking, so they're financially savvy, some. And then I go to manufacturing. And manufacturing is where it showed up for me again, that I realized that not everyone has these lessons, and not everyone has access to people that have these lessons.

And so when I start to think about payroll and holding leaders accountable, one thing the army gave me, or the military gave us, is you know, we used to get paid on this, our W-2, or the pay stub is a leave and earnings statement. So we would call it the LES. And every leader, and you know, at first when I came in, I was a young soldier, not understanding why this man was so into my finances. Turns out, hindsight, as a leader, that's what he had to do.

And so I took some of that with me into manufacturing, because I wanted to make sure that employees understood what they made, how they were paid, what they were responsible for, and what that meant for their families. So I could at least give them that, right? And so when you talk about the whole person employee, or the total employee and what they mean to you, it just doesn't pan out when we go back to this person makes this amount of money and they are living a living wage over here, but this person here makes the same amount, but they're living over here. Well, that's the financial breakdown, right?

And so what I've done is made sure I've been able to bring in financial specialists to come in and actually hold those leadership classes with them, and to take a hard look at it. Because for me as an HR executive, those are some lines I can't cross, but I can give them the tools. So I can't tell each person what to do and how to manage their finances, but I can bring them a tool or the person that can do that for them. So that's how I kind of brought that back together for myself and made it my value add, and me seeing the value in people, and my value to those people.

Kelsey Willock Jones: So I'd love to double click on that. How important is financial wellbeing for employees to the company? And why is it so important right now?

Stacie Phylicia: I would say it should be top of mind for companies, period, right? Because when you talk about your ROI, or when you talk about the value in your company, your people are your greatest asset, right? Without the people, we're not gonna make it. And we can go back and forth on AI is gonna do this, or robotics is going to take the place of this, but that human touch is still there. That human knowledge is still there.

All the old knowledge from way back in the day that we need, that is now progressing out because of course baby boomers and everyone is retiring and things like that. What are we doing with that knowledge, right? Who's holding on to that knowledge? Surely robotics can't. Surely AI can't. AI is gonna bring us a tool, AI is going to bring us a thing, but AI cannot replace that person. So that should still and always be top of mind for companies. People are your biggest and greatest asset.

Kelsey Willock Jones: You also mentioned a really important point around investing in the whole person. Whether it is investing in their physical health, their financial health, their mental health, all are really key parts of supporting the human at work. What do you think companies are getting wrong about supporting the whole person right now, or falling short?

Stacie Phylicia: I would say that they fall short maybe in the benefits area, right? And I say that because you have a company, everything is not a one size fits all. The simplest way to say it is, companies were, if you go and look at a job announcement right now, it'll show you all the benefits they have, it'll show you 401(k)s. It will show you possibly stock options, and then it'll show you pet insurance. Does everyone have a pet? No. So why would that be important?

Okay, it will show you, and certainly I think one of the greater ones is parental leave and things like that. That is great. I believe that's a great benefit. But what about those people that are not in that space of having kids, or going into parental, or they're past that? So what are we doing to compensate for that? Because you're offering a benefit that doesn't fit everyone. And I'm not saying you have to do it to fit, your benefits package is not gonna fit everyone all the time. However, there's some level of balancing that companies need to be mindful of, to make sure that they do capture the entire workforce and not just a portion of it.

Kelsey Willock Jones: So a lot of the benefits that we've spoken about, whether it is parental leave or maybe not necessarily pet insurance, but maybe healthcare beyond, these are expensive line items.

Stacie Phylicia: Yes.

Kelsey Willock Jones: How do you think about influencing key decision makers of the company, whether it's the CFO, the CEO, et cetera? And especially when you're making the case for something that maybe the spreadsheet doesn't so obviously support the return on investment in that specific program, when you're thinking about bridging the gap between the financial impact as well as the human impact that you're looking to make.

Stacie Phylicia: So I believe, again, back to the whole employee and where we're kind of confused at. We keep the whole employee, or we've confused the whole employee with apps, right? That is very prevalent right now. And like disconnected points. The solution isn't holistic, right? So when we talk about it, it's fragmentation along the way. Because we've got the wellness label, we measure the activity or the outcomes, but the real scoreboard probably is whether the distress signals are reversed or not, right?

So when we look at 401(k) plans, do they really work? Because most people withdraw hardships early, right? It's supposed to be a tool for retirement. But when we go back and look at it, the hardship withdrawals, the deferred care, turnover. Right now half of employees are just skipping medical care all the way. They don't even want it, right?

Kelsey Willock Jones: Right.

Stacie Phylicia: And they'll just rather cover out of pocket costs. But what does that do for them? Because all that's gonna do now is build up a debt, because most people that sit back and say I'll do the out of pocket cost, they can't afford that out of pocket cost, because these hospitals want this money right now. Right? So there's a debt over there. That's not even working. So that's the metric, and it's going the wrong way. It is totally going the wrong way.

So supporting the whole employee isn't the size of our benefits catalog, but it's whether the boring infrastructure, pay, defaults, time, access. And I say it just like that. Pay, defaults, time, access works for the person who never opens that catalog.

Kelsey Willock Jones: Can you tell me about a time when you ran an experiment, perhaps in the benefits space, or introduced a specific strategic initiative that didn't necessarily go the way you expected, and what you learned from it?

Stacie Phylicia: I would say when I did come to one of my companies, the last company I was at, and it was more along the benefit strategy, right? And so what I first wanted to do was find out from everyone, because the company had been in that area for about eight years. And when that company first got to South Carolina, everything was paper driven. Nothing was, you know, there were no aligned practices in place.

For years the playbook for driving better benefits decisions was just communication. It was like, guys, emails, webinars. Engagement metrics looked fine, but it barely moved. The people were not even engaged. So instead of trying to change the people's behavior, we changed the default. And it's like, what did I change? Automatic enrollment, right?

So for one, they had it where everyone during open enrollment, you have to just go back in and update your enrollment. So what I wanted to do was automatic enrollment. And that gave me a higher default deferral. The active choice enrollment instead of rollover elections came out better.

Now, what I did discover in that was, there were a lot of people who really didn't come to work for benefits. So they were upset. So what I had to do was, once that enrollment hit, it automatically sent them a message or email or something. I got them through email, text, and then their HRBP physically had to contact them and make a statement to them that hey, your benefits have been enrolled. You have the authority now to go in and opt out.

Kelsey Willock Jones: Mm.

Stacie Phylicia: But it put the onus on them to opt out. But what I did learn from that is that not everybody comes to work for benefits. And in that manufacturing population, those blue collar workers, some of them felt better just coming to work and relying on government insurance or payments to work for them. So some of them really didn't make a whole lot of money, that they still qualify for the state benefits. And so that was a part that I think I missed and wasn't very aware of. Because again, when you think about where I sit in the organization and what I'm accustomed to, and what I've, you know, coming out of establishments like banking, chemicals and things like that, that was the miss for me.

Kelsey Willock Jones: Yeah, and I think it's a really good point that even if you're targeting a certain metric or improvement in metric, it doesn't necessarily mean it makes the right impact at the company. So just because you saw significantly higher engagement metrics didn't necessarily lead to higher employee satisfaction for workforces that don't value the benefits that perhaps a different workforce might. So it makes a lot of sense.

Stacie Phylicia: Yeah. And I just had to eat it. I had to eat it. That, you know, the power of default was, it comes with the responsibility of, once most take whatever you set, you own the outcome. And so all that backlash came back to me. And, was it worth it? Yeah, I think it was. And that's me and my seat personality thinking that everyone needs benefits and this is me helping you take care of your family. But that's not what everyone needs to eat all the time.

Kelsey Willock Jones: Right. It takes a lot of guts though, to step out on a limb and take a risk like that and know that the outcome might not be what you expect. But at least it was a valuable experiment to try, and a really important lesson learned that you've carried forward.

Stacie Phylicia: I think my biggest lesson was to make sure I audit my defaults. Just audit my defaults. Audit it up front and that way I'll know. And because every plan does have a default, but you need to audit that first. And you know, being HR, you should audit it.

Kelsey Willock Jones: It's a very important reminder. So obviously there is a lot of change happening in the HR industry right now, whether it has to do with AI, healthcare, you name it. We've even spent some time talking a little bit about the interesting work that you're doing, building some agents yourself. How are you staying current on the new innovations in the industry and what's working? Are there specific conferences that you've really enjoyed, peer networks that you've been a part of, newsletters that you've found interesting?

Stacie Phylicia: Well, yeah, so right now I'm actually in the first cohort with this group. It's a bunch of HR, it's twenty of us actually, twenty HR executives that have now come together. In fact we graduated on Thursday, and we had to come up with an AI agent to solve a problem or solve something from these companies, right? And so two companies that I talked to both wanted to rely on benefits.

But what I did learn in the process, so building this agent, this agent was to help them relieve some of the stressors from the HR generalists and HRBPs of answering everyday questions, all these same monotonous questions from these people, right? However, what I did learn as I broke the system, because we're gonna go in, we're gonna build this agent, we've got to come in with as many questions as possible, and also come in with as many outrageous questions that we need the system to send back to us, right?

But what I learned in my process, and again everyone wants to be so automated, but what I had to do was take a step back from the company and really go back and deep dive into their ask, right? And what is their ask? What are you really solving for? Most companies don't know what they're solving for. They want to go into AI, but what do you want this AI agent to actually do?

And once I asked that one question, it was so many different things they wanted to do. That required more than one AI agent, right? And so I had to go back in with them and really put them all in a room. And we had to whiteboard it out and do it the old fashioned way, process improvement, and show them exactly what it's gonna be, who's gonna be responsible, who will be the fixer of this agent, who will know when this agent is exhausted, and that we need to now build on to that.

And what do we really want this agent to answer? And first questions were, let's take me. Stacie wants to know how much does she need to put on her insurance policy? Does she need her entire salary doubled, or does she just need ten thousand dollars? Well, that agent can't tell you that, because that's now your family issue. That is also governmental, financial breaking there.

So I had to go back and let them understand that we cannot utilize this agent to take the place of a full human that sits there. And I think right now, as we talk about that, a shift in comp and benefits is gonna be, are leaders ready for the death of job based pay, right? So on the front end of that, that would be a simple HR clerk, a simple HR generalist at the lowest level handling those questions. Once we remove that, then how do we price that into the next job? How do we benchmark that into a comp and benefits personnel or analyst or leader, or whatever we want to call them at this point.

Kelsey Willock Jones: So my final question for you, and it's kind of a continuation of what we're discussing, what is a major shift in compensation and benefits that you see coming that most HR leaders are not ready for?

Stacie Phylicia: Well, I think it's gonna be the job based pay, right? Because nearly every comp system prices the job, and then they level it, they benchmark it, they attach it to a range, they run an annual merit cycle. And then that model kind of assumes the job is a stable unit of value. And AI just broke that assumption.

AI just broke it. And then at the bottom, the entry level tier is eroding. So what do we do with that? And how will they really put that into play? You know, you asked me earlier what am I doing to stay on top of things that's happening, what conferences am I attending. Right now I'm at the John Maxwell Leadership Conference. And we have a case study right now for Stanford Canaries. And we're researching with ADP payroll, and right now for twenty two to twenty five year olds, the most AI exposed occupations are now declining. So around like four percent a year is declining. And while their peers are not as exposed, those jobs are still growing.

So that's just kind of where we are, and I don't think that, while most HR executives are really trying to understand where to fit AI into their models and how to fit AI into their everyday work, then what's that gonna do for that job, that base pay? And I don't think anyone has answered that. I have not found any research where someone has. But it's happening, exactly as transparency goes mainstream. It's happening, right?

Kelsey Willock Jones: Well, perhaps you'll crack the code this week in your cohort. By graduation. Nothing big.

Stacie Phylicia: I don't know, because even right now, we know at least seventeen US states now have pay transparency. So they can see that, right? And roughly two thirds of the employees are operating on some mandate. But it's just not gonna be there, right? So how do we hit this, and then where is that margin? So are people gonna now decide to go and work in these states where they can actually see it, where they probably package that AI mindset inside of that pay range? Or are people that are salaried workers, are they gonna expect to be paid that? Because I'm sure, just like I was saying earlier in the agent, who's responsible for the agent? It's probably gonna be one of those salaried workers. So are they gonna expect that pay to be coupled into what they're making now? So yeah.

Kelsey Willock Jones: Right. Well, Stacie, thank you so much for all of your time today and all of your wisdom. I've learned so much from you. It was a joy speaking with you. I hope you'll join us again someday.

Stacie Phylicia: I am open. I love it. I love your questions.

Kelsey Willock Jones: Thank you.

Stacie Phylicia: And you guys actually helped me along the way as well, because I'm working right now on my DBA, and some of these same questions are what I'm researching and asking and answering, and that'll probably be answered in my dissertation as well. So always a pleasure, and anytime you guys wanna sit down and have it, let's talk it out.

Kelsey Willock Jones: I love it. And where can our listeners follow along or connect with you beyond this conversation?

Stacie Phylicia: Well, I'm on Instagram. I'm also on Facebook, and you can always catch me on LinkedIn. My John Maxwell leadership speaking and coaching engagements will be out there as well. I have a video also coming out soon that will help you guys understand who I am and where I'm going.

Kelsey Willock Jones: Well thank you so much, Stacie. I hope you have a great rest of your week, and thanks so much again for joining us.

Stacie Phylicia: Thank you.