93 CBPR Highlights

[00:00:00] Hello everybody and welcome to Comp Coffee. I am Bruce Thomas, Chief Evangelist here at

[00:00:20] Payscale and the current custodian of our podcast where we aim to bring you insightful

[00:00:24] discussions, expert insights and keep you informed and empowered in the ever-evolving

[00:00:30] landscape of compensation. So whether you're a seasoned comp pro or new to our

[00:00:35] topic our podcast is your go-to resource for staying ahead of the curve. So grab

[00:00:41] your favorite beverage, coffee or otherwise tune in and let's get started.

[00:00:46] So today's topic is Payscale's compensation best practice report or as we

[00:00:52] know it here CBPR which was released in March, March the 20th and it our big

[00:00:58] report of the year and I'm delighted to have two guests who we've been working

[00:01:02] with on CBPR this year Amy Stewart our Associate Director of Content Marketing

[00:01:07] and Newly Psyche at Payscale Senior Corporate Attorney. Welcome Lulu and welcome Amy.

[00:01:13] Thank you. Do you want to just introduce I know you've both been on the

[00:01:19] podcast before but for those who are tuning in new and maybe only listen to

[00:01:23] this episode do you want to give them a quick overview of your roles Lulu

[00:01:27] starting with you. Hi everybody my name is Lulu Psyche I'm a Senior Corporate

[00:01:31] Employment Attorney here at Payscale been here a little over two years and in

[00:01:36] addition to my role at helping pay abysing Payscale on employment related

[00:01:40] matters I work very closely with Ruth and Amy on all things pay legislation

[00:01:46] compensation legislation anything like that. And my name is Amy Stewart and

[00:01:51] I'm the Associate Director of Content Marketing like Ruth Sen. Great thank you

[00:01:56] okay so before we get going on CBPR and it is nearly May and whereas we do this

[00:02:03] recording and in the UK we are having a very cold weather period and was just

[00:02:10] telling you both earlier this morning I went out for a walk and I was

[00:02:13] literally wearing two coats so it's meant to be spring what is it like

[00:02:18] where you are I'm calling in from London where are you calling in from

[00:02:21] baby I am calling in from the greater Seattle area and up until today we had

[00:02:26] beautiful unusual summer like weather in spring and then today I woke up to

[00:02:31] cold temperatures and drenched streets and it's been raining all day so that is

[00:02:37] a change and I'm calling in from Dallas Texas and until yesterday it was

[00:02:44] actually quite nice and cool in the 60s but this morning when I went to go

[00:02:48] out and I saw a lot of basil my adorable 100 pound puppy it was already 75 degrees

[00:02:54] this morning so Texas is somewhere I think is going to be disgusting unfortunately

[00:02:58] we'll see what happens. So Amy I think you and I need to head to Dallas maybe

[00:03:05] to get a little bit warm in our bones because that's desperately what I'm

[00:03:08] feeling like right now okay so we're going to... It's not even sunny outside

[00:03:13] but warm it's warm okay let's dive in here because we've got lots to talk about

[00:03:22] when it comes to the compensation best practice report Amy you were the

[00:03:26] lead writer or the author on this report for anyone not familiar with it can

[00:03:29] you tell us what it's about and what it covers? Yes so this is the 2024

[00:03:35] compensation best practices report which takes data analysis from a survey

[00:03:39] that we run in late 2023 so it runs in November and December of the previous

[00:03:45] year we pull the data at the beginning of the year and share it with our audience

[00:03:49] in March this year we had over 5,000 responses to the survey and allows us

[00:03:55] to segment the data by company size and by industry and by just like other

[00:04:00] ways of cutting it so that we can draw really interesting input about what is

[00:04:04] going on with compensation management so it's not a salary survey in the sense

[00:04:09] of what people are earning for different positions that's certainly very familiar

[00:04:14] to our audience but this is a compensation report that covers a lot of

[00:04:19] different topics around what is happening in the world of the function

[00:04:23] of compensation from a job role position and so we are very

[00:04:28] excited to share the insight on the podcast today.

[00:04:33] Great thank you Amy so it's a very long report lots of data in that what was

[00:04:39] some of the topics that we covered? All right so yes it is a hundred plus

[00:04:43] page report so it is quite a long quite a long report I think it's fun to read

[00:04:49] but obviously your you know endurance for that type of analysis will differ

[00:04:53] depending on you know maybe what happened that day or how interested you

[00:04:57] are in learning what is happening out there in the world of compensation

[00:05:00] management but we cover a lot of topics in the report we always cover pay

[00:05:05] increases we always cover compensation strategy salary data usage

[00:05:10] and pay analysis and and pay communications but this here we covered

[00:05:14] a lot of trending topics as well and I believe we will focus on those a

[00:05:18] little bit more for this podcast so we covered some things like

[00:05:21] artificial intelligence and use in compensation

[00:05:25] talk about skills-based workforces utilizing skills-based pay talk about

[00:05:30] unions minimum wage and there's a whole section on pay transparency

[00:05:34] obviously that has been huge both in the legislature and in the topics of

[00:05:40] interest the last couple of years and our resident expert Lulule is here with

[00:05:43] us today definitely dive into that in a little bit more detail.

[00:05:48] Yes so let's start right there then your favorite topic Lulule pay

[00:05:51] transparency what were your favorite nuggets from the report this year?

[00:05:57] Well it's no surprise pay transparency is now becoming a best practice of

[00:06:00] organizations especially with all of the legislation that has been flying

[00:06:05] through to a bunch of states like Washington California Colorado New

[00:06:09] York Hawaii and so many more so this here in CBPR we saw that 60 percent

[00:06:15] of organizations are publishing pay ranges regardless of whether it's

[00:06:19] required by law this is a huge number because this is up from 45 percent last

[00:06:24] year we also saw a good amount of organizations tell us that

[00:06:29] pay transparency is having an impact on their employees whether that's a

[00:06:32] good impact a positive impact or negative impact so 27 percent of those

[00:06:38] organizations we pulled say that employees are asking more questions

[00:06:41] about their pay 14 percent have said that employees have quit

[00:06:46] because they saw job postings with higher pay somewhere else 11 percent have seen

[00:06:51] employees seen an internal job posting for a similar role and realize they were

[00:06:56] being paid less and more encouragingly 14 percent say that

[00:07:01] employees have expressed some sort of appreciation for transparent pay

[00:07:05] practices so overall I think it's a really good story and I think with

[00:07:08] as more legislation that gets passed and put into effect we're going to

[00:07:12] see these numbers jump up I imagine probably next year

[00:07:18] and Amy any do you want to add on there in terms of

[00:07:21] pay transparency insights no I'll just double down on it's gone up from 45

[00:07:27] percent to 60 percent so that means we are now in a majority

[00:07:32] of organizations saying pay transparency is something we do as a best

[00:07:36] this regardless of whether or not it is wired by the locations that

[00:07:41] where they are hiring hiring or evaluating talent

[00:07:45] and I personally think that that's huge because it means that

[00:07:48] you know one in four approximately one in four

[00:07:52] job candidates or employees in the role are impacted by this

[00:07:56] and that's going to change the behavior of your reputation regardless of whether

[00:07:59] or not your particular state or area has passed this legislation

[00:08:03] it's going to see those jobs you know in other locations

[00:08:06] and that's a trend on the presentation and when the job market is in

[00:08:11] the employees maybe I think we're really going to see the

[00:08:16] impact of pay transparency so as I read the report Lulu

[00:08:20] I could really see the impact that pay transparency is having

[00:08:25] overall on compensation strategy my general takeaway was that it's

[00:08:30] forcing employers to be more intentional about setting and

[00:08:36] implementing their compensation strategy and building more

[00:08:39] rigor into their compensation processes

[00:08:42] but what are you seeing in the data and generally in terms of how

[00:08:46] pay transparency is changing strategy and what's the risk of not adopting

[00:08:50] pay transparency so like Amy just said we have to remember

[00:08:55] that pay transparency is now impacting I believe it's actually

[00:08:59] more than one in four employees in the US one in four is the last

[00:09:03] number that we we looked at so that really means that employees or

[00:09:07] employers organizations who don't adopt pay transparency are losing out on

[00:09:11] top candidates but on the other side of that they may also be losing out

[00:09:15] on top performers so legally speaking if organizations who are

[00:09:21] required to comply with some sort of pay transparency laws

[00:09:25] if they refuse to comply most the states have teeth to these laws

[00:09:29] meaning that there are state fines associated with not complying

[00:09:33] there's lawsuits folks can bring with not complying and we're actually

[00:09:37] seeing that already happen in states like Washington state

[00:09:40] there are so many class action lawsuits right now being filed

[00:09:43] against organizations who are either refusing to post pay ranges or

[00:09:48] are posting pay ranges that are so wide that it's

[00:09:52] but they're posting these ranges that are not complying with the law

[00:09:54] and we're also seeing this happen in New York state as well

[00:09:58] so we have seen historically a lot of organizations say

[00:10:02] we're going to roll the dice and we'll just throw money at the legal

[00:10:05] problem in case we get caught but what we're seeing is that the court

[00:10:10] of public opinion so even if an organization isn't getting

[00:10:13] dinged by lawsuits and penalties and fines

[00:10:16] but there it's a lot harder to throw money at a PR problem

[00:10:20] so the court of public opinion is a lot harder to throw money at to make their

[00:10:24] PR nightmares go away yeah that's an important point to

[00:10:30] to note and I mean we can't talk about pay transparency without talking about

[00:10:34] pay comms Amy and pay communications because they're

[00:10:38] heavily related what's your view on that and what do we see people

[00:10:41] doing in respect of pay communications yes I am hoping and anticipating that

[00:10:46] pay communications are going to grow in popularity over the next few years as

[00:10:51] pay transparency is pushed out there as below said the spirit of the law is

[00:10:55] try to communicate with job candidates and with employees what the real

[00:10:59] pay ranges are and that has had some you know

[00:11:04] differing differing ways that employers are interpreting that but I think when

[00:11:08] you get down to pay communications it gets much more clear

[00:11:12] about what it is that you're trying to accomplish and we are seeing that

[00:11:16] more organizations are investing in pay communications

[00:11:19] from the compensation best practices report so this is the first year that

[00:11:23] 51% of organizations say they train managers on pay

[00:11:26] communications that's an astounding figure to me because only half

[00:11:30] only about half of organizations train managers on

[00:11:33] how to talk about pay with their employees and that is the

[00:11:37] you know primary core transactional relationship between an employee and

[00:11:42] their employer obviously there's a lot more that goes into

[00:11:45] job satisfaction engagement loyalty hiring and

[00:11:50] retention processes but I think what you are paid and the knowledge that you

[00:11:55] have with how fairly you are paid is a primary reason

[00:11:58] people are employed so not people to understand that and not

[00:12:03] training managers to communicate about it

[00:12:05] is a big miss especially if you are putting a lot of effort and energy

[00:12:10] into your pay processes into your compensation strategy into your

[00:12:13] equitable pay structure to make them fair communicate that to your employees

[00:12:18] you're not seeing the value of it so I do in I do anticipate or expect or hope

[00:12:22] that pay communications will become the pay transparency 2.0 of the future

[00:12:27] we're really kind of drill down on what we're trying to achieve there and

[00:12:29] start doing a better job at it great thank you

[00:12:33] and so you've obviously had to focus on the many facts in the report

[00:12:39] Amy so if you were to pick a favorite child

[00:12:42] what's the most fascinating thing that you found in

[00:12:47] the study this year that is a very difficult question because there are

[00:12:50] over a hundred questions in the survey and they all offer you know

[00:12:54] the fascinating insight but I had to pick a favorite

[00:12:57] it would probably be along the same those same lines about

[00:13:00] their pay we asked the question in the report of

[00:13:04] do what do you do to address severely underpaid employees

[00:13:09] we do not provide a specific definition for what that means but like severely

[00:13:13] underpaid is a pretty clear understanding of

[00:13:16] this employee should be making more than they currently are

[00:13:19] whether that means that they're a star performer and they're making the

[00:13:22] bid point of their range or they are being paid below the pay range

[00:13:27] whatever that means to your organization what do you do to

[00:13:30] address and 27 percent of organizations then they don't do anything

[00:13:34] unless they're a manager or the employee themselves

[00:13:38] and I think that that sets up a dichotomy for employees to feel like there's not

[00:13:44] really trust with the organization to care about them

[00:13:48] and the valuable work that they do if you have to proactively

[00:13:51] beg or ask or set up appointments with your with your manager or HR to be

[00:13:57] paid fairly like not to make more extra or bonus but to be paid

[00:14:01] fairly that sets up expectation that the company just

[00:14:06] doesn't really value you and I think that that is what

[00:14:09] needs to lack of engagement and higher turnover when the market

[00:14:14] when the market is viable so that would be by

[00:14:17] kind of favorite favorite stat from the report

[00:14:23] and I think we also saw intent to do pay equity drop off slightly in

[00:14:29] two to 24 didn't we Amy compared to 2023

[00:14:33] so if I remember rightly we saw a big jump in organization's intent to address

[00:14:38] pay equity from 22 to 23 and then this year it

[00:14:44] it's just marginally dropped off by 1 percent I think is it now

[00:14:47] 62 percent so it's still a majority saying that they intend to address

[00:14:51] pay equity in organizations and I don't know if you have any views on why

[00:14:57] that's happened I mean I know it's a minor drop but

[00:15:00] yeah I mean to start I think why did it go up so much so

[00:15:04] so during during the COVID 19 uh yeah COVID-19 pandemic and the Black Lives

[00:15:09] Matter movement we saw pay equity jump in prominence for a lot of

[00:15:13] organizations I think memory serves and don't quote me on these

[00:15:17] numbers from past reports because I don't always retain the numbers forever

[00:15:20] in my head but I want to say it was around 38 percent when I first started the

[00:15:24] compensation best practices report for pay scale it was well under a majority

[00:15:29] jumped to like 42 or 45 and then it jumped to

[00:15:33] 63 last year that's an incredible

[00:15:37] incredible closing of the gap between organizations that

[00:15:40] do pay equity at all to those that are saying you know we care about this

[00:15:44] and we're trying to do it whether they do it well is another question is

[00:15:47] that what they're but they're trying to do it and that did drop off by one percent

[00:15:51] I don't think that that drop is you know like it's not really significant we

[00:15:56] could see it drop up again next year we could see it drop off again slightly

[00:16:00] I would say about the same number of organizations are investing in pay equity

[00:16:03] now but we didn't see as it continued to go up so didn't go from like 62 to

[00:16:07] 70 or 62 to 80 it's it's a majority of

[00:16:11] organizations but it has taken a bit of a back seat

[00:16:14] to economic concerns and other things that are

[00:16:17] are plaguing organizations right now we've also seen that echoed in like lack of

[00:16:22] investment or a rollback of investment in DEI strategy

[00:16:26] I personally think is tragic and should be something that

[00:16:30] organizations are spending more time caring about they do think it

[00:16:33] matters to the workforce it matters to the labor force

[00:16:37] well I think and Lulu what was your take on fair pay yeah

[00:16:41] I was looking I think it goes hand-in-hand with the pay transparency laws right

[00:16:45] with pay transparency laws becoming more and more popular

[00:16:49] organizations who refuse to conduct any sort of internal analysis will find out

[00:16:54] a hard way if they refuse to do you know checks on fair pay because

[00:16:59] what ends up happening is that employees are going to be more interested

[00:17:02] in asking about their pay they'll start seeing job

[00:17:05] postings that have higher ranges than what they're being paid for

[00:17:09] and then they're going to start asking questions and nine times out of the 10

[00:17:12] the employees are going to ask those questions are your high performers

[00:17:15] and if your high performers start jumping shit for higher paying jobs

[00:17:19] how hard and how expensive is it going to be to replace them

[00:17:23] so I mean your organizations really especially with the development of

[00:17:27] pay transparency laws becoming so popular they have to

[00:17:31] really do these internal checks and if your organization develops a

[00:17:34] reputation of not paying people fairly you're going to have people jumping

[00:17:37] shit and you're not going to be able to recruit on the back end

[00:17:41] yeah I mean I think these things all linked together you know pay transparency

[00:17:46] pay equity addressing pay fairness and pay communications

[00:17:49] and I know you know there are concerns around

[00:17:53] potentially addressing pay equity in organizations for many reasons

[00:17:57] but I think we're too far down the journey in terms of employee

[00:18:00] expectations around pay transparency and so I know I know we hear from

[00:18:06] on the webinars that we do Lulu a lot of the audience saying you know they're

[00:18:10] finding it hard to persuade their business leaders but

[00:18:13] you know I think you really have to look at this as this has to be a key

[00:18:16] integral part of your talent strategy today

[00:18:19] because it all comes back to this trust in pay practices being a really

[00:18:25] critical element of the employee engagement equation

[00:18:28] and if you lose that trust then you have disengaged employees who are

[00:18:33] more likely to be less productive may leave your organization

[00:18:38] so we really do need to join the dots between those those different issues

[00:18:43] so other than pay transparency Lulu what was

[00:18:46] your most fascinating fact or insight from the report was there anything else

[00:18:51] that you wanted to pull out yeah I think the minimum wage

[00:18:55] piece was really interesting although probably not quite as surprising as I

[00:18:59] expected just because in January of 2024 we saw 25 state and 38

[00:19:05] municipalities other cities or counties increase their minimum wage so not

[00:19:10] surprisingly we found in the report that minimum wage is going to impact

[00:19:14] compensation strategy for 27 percent of organization

[00:19:19] if you want more information about the minimum wage and how that's going

[00:19:22] to impact your organization Ruth and I did a cup of coffee with

[00:19:26] some other colleagues of ours that episode 89 so check that out for short

[00:19:32] but in cvpr specifically we do already see that 36 percent of

[00:19:38] organizations are already paying above the minimum wage so they said they would

[00:19:42] not be impacted we saw that about a quarter 27

[00:19:46] percent of organizations say that minimum wage is going to impact their

[00:19:50] compensation strategy and this number this 27 percent

[00:19:54] number is over 30 percent for larger organization and as high as 37 percent

[00:20:00] for organizations with more than 50 000 employees

[00:20:04] it's highest for the food and beverage industry at 46 percent and I don't think

[00:20:08] this is going to surprise anyone especially if y'all have employees who

[00:20:13] are fast food workers in california because just this month a few weeks ago

[00:20:17] on april 1st california adopted a 20

[00:20:21] dollar an hour minimum wage for fast food workers so I think that 46 percent

[00:20:25] number for the fast food workers those were organizations anticipating this new

[00:20:29] minimum wage in this significant minimum wage increase for their california

[00:20:33] population yeah Amy anything you want to add on about

[00:20:38] minimum wages or yeah I would I would add that the you know

[00:20:42] presented in organizations that take cvpr is split between

[00:20:47] you know smaller companies and larger companies not not every company has

[00:20:51] minimum wage workers or doesn't have them in large quantities where they are

[00:20:55] impacted by this which is why that 27 percent number isn't

[00:20:59] 60 percent or 80 percent of organizations that are impacted

[00:21:03] but minimum wage does impact low wage workers even if they don't make

[00:21:08] minimum wage when it comes to pay compression so I think that a lot

[00:21:12] of organizations whether they have minimum wage workers are

[00:21:16] impacted by the minimum wage in their area because it does

[00:21:19] impact their overall compensation strategy when it comes to you know what is our

[00:21:24] floor for wages for the workers that we have we

[00:21:28] incident 54 percent of organizations are concerned about pay compression in

[00:21:32] 2024 29 percent say that it is less of a concern this year compared to

[00:21:38] previous years because coming out of the great resignation

[00:21:41] wages were growing rapidly for a lot of positions that was putting a lot of

[00:21:45] pressure on compensation structures being fair to market so it's not

[00:21:51] everyone but it is certainly having an impact and with inflation

[00:21:55] still being higher than we want it is certainly still an issue

[00:22:00] this year and probably next year and I think too like

[00:22:05] I think organizations really have to pay attention to these minimum wage

[00:22:08] increases especially I point to California because

[00:22:12] California and Washington have some of the highest minimum wage jumps just

[00:22:16] for cities for specific cities looking at like the Bay Area in California for an

[00:22:21] example there there's some minimum wages there that are

[00:22:24] over $20 an hour hovering around $20 an hour

[00:22:27] so if you if these minimum wage jumps are so significant for your organization

[00:22:32] you have to kind of consider pay compression

[00:22:35] in case that you have to meet maybe your lowest wage workers

[00:22:38] up to the minimum wage and then looking at that next level above to

[00:22:41] see if that's going to cause any compression issues

[00:22:45] and I think many of these minimum wage increases are like multi-year

[00:22:50] deals aren't they so I think if you haven't got a strategy of how to deal

[00:22:55] with that now you need to get a strategy of how you're going to

[00:22:59] tackle any inequity issues that they cause through your pay structures

[00:23:02] because this is going to be an ongoing development you know as we

[00:23:06] continue to kind of like slowly increase the minimum wage

[00:23:09] floor basically okay so minimum wage we've discussed what else can we talk

[00:23:15] about another topic was unionization

[00:23:19] somewhat related but that also sort of links to topics about fair pay

[00:23:25] because we saw kind of quite a lot of union activity through 23

[00:23:29] what do you think was most interesting Lulu about the data that we saw

[00:23:33] on employers responses to unions

[00:23:37] so I mean 2023 was like a very big year for unionization whether that was

[00:23:41] because of you know Hollywood basically shutting down for the whole year

[00:23:44] because of the WGA and tax strikes or seeing you know Amazon employees

[00:23:48] and Starbucks employees start organizing and creating unions

[00:23:53] but what was interesting to me is that according to our CBPR report

[00:23:57] we've found that 70 percent of organizations actually

[00:24:00] don't bargain with the union currently

[00:24:04] but four percent say they do now as a recent change in the past few years so

[00:24:09] like to me that four percent number may not seem significant but it's

[00:24:12] it's significant that's a big jump for union activity with

[00:24:15] organization so and that four percent does include

[00:24:19] organizations across company size and industry

[00:24:23] in our report 72 percent of organizations say they're not

[00:24:27] concerned about teacher unionization and studies show that younger

[00:24:31] generations are more pro union and unionization may increase due to public

[00:24:36] sentiment especially when it comes to fair pay

[00:24:39] and I would just add that I'm curious to see what this number does next year

[00:24:44] especially in light of the presidential election over us i to see if that's

[00:24:48] going to make any changes politically

[00:24:52] yeah that will be interesting always a struggle with which questions do we

[00:24:56] keep year to year but I think if unionized

[00:24:58] unionization continues to be a hot topic it will probably remain in the report

[00:25:04] but we'll see as we as we get there with you know other things that are

[00:25:07] happening I would like to chime in just that

[00:25:10] the we asked like what are your sentiments around

[00:25:13] unionization within your organization and we asked this to

[00:25:16] participants to answer both for their HR leadership

[00:25:20] and their you know executive leadership the CEO the CFO the COO

[00:25:25] and that does differ considerably which is what we did so 62 percent of HR

[00:25:31] leadership are more favorable toward unions they recognize

[00:25:35] this is a you know communication and on bargaining strategy

[00:25:39] with the people that you want to um have engaged and retained within your

[00:25:44] workforce um whereas for executive leadership it was 38

[00:25:48] percent and a lot comes down to what is the cost of this how is this going

[00:25:52] to increase pricing complexity bureaucracy

[00:25:57] growth of the business in terms of the impacts of

[00:26:00] bargaining so I think those you know 62 percent between 38 percent it's a pretty

[00:26:05] wide divide but really senior leaders need to be

[00:26:07] talking to each other about what it is they're trying to

[00:26:11] you know achieve when it comes to talent strategy and working with the

[00:26:14] union can be beneficial for executive leadership as well as

[00:26:19] please yeah I mean that was quite a big gap too and I think it really represents

[00:26:26] maybe something we talked about earlier about HR and compensation folks having

[00:26:30] a struggle to try and get leadership buy-in I think it's the same thing here

[00:26:34] like when you work in HR or COMP you're fairly tuned into like the needs

[00:26:38] and desires of your workforce what your employees want

[00:26:43] um and you know we are seeing this interesting debate play out

[00:26:48] around who has power in the workforce and labor market swings normally

[00:26:54] sometimes it's in the favor of the employees like we saw during the great

[00:26:57] resignation and then you know there's been with some of the layoffs last

[00:27:01] year people saying it was coming back to the employer and many employers hoping

[00:27:05] that the power was coming back to them but I don't think we're necessarily

[00:27:10] going to see that same trend anymore I think

[00:27:12] the world has opened up and the power of employees has massively increased

[00:27:17] their agency has increased in the workforce for many reasons

[00:27:21] and I think we have to learn to adapt to that and leadership need to understand

[00:27:26] really that they need to harness work, passion and energy to create

[00:27:31] mutual benefits for everybody so it's a really interesting topic

[00:27:35] now we're not actually necessarily on camera but I'm just enjoying watching

[00:27:39] Amy's cat doing acrobats in the background if we can social snip that

[00:27:47] we should just put that on LinkedIn I think what's your cat's name Amy?

[00:27:51] Her name is Ari and yes she's here right now

[00:27:54] right I think she we should just do a snip on her basically and that can be our

[00:27:58] social clip for LinkedIn okay so those were our favorite topics

[00:28:03] I always know the audience's favorite topics or one of the favorite topics is

[00:28:08] pay increases what's going to happen what happened in 23 what happened in 20

[00:28:13] 24 so tell us Amy what was the key data points that we saw come out of that?

[00:28:19] Yes and I think we're in a good time of year to talk about pay increases too

[00:28:23] because the majority of organizations have just been through them

[00:28:26] pay increases do happen all year round it can depend on when your fiscal year is

[00:28:30] and how you will think that to your workforce but majority of organizations

[00:28:33] would pay increases somewhere between December and March and we are now in April

[00:28:37] so we are starting to feel the pay increase starting to do that we avoid

[00:28:41] and whether it is keeping workers engaged and retained or if it is not doing that so

[00:28:47] it's also interesting that this is the first year that we asked in our survey for a straight number

[00:28:52] a decimal point number from our audience rather than selecting from a list of multiple choices

[00:28:58] with like a range so you're able to calculate an overall courage for pay increases and in 2023

[00:29:05] we're going to make it 4.8% as the average pay increase is I don't think I need to explain to

[00:29:12] this audience comparatively high to what pay increases have been since the great recession of

[00:29:19] 2007 2008 so a lot of that has to do with you know cost of living increases all of the wage

[00:29:27] growth that we've seen throughout COVID and the great resignation and we don't anticipate

[00:29:32] that it is going to remain this high indefinitely but for now in 2023 it was 4.8 and the predicted

[00:29:39] percent for 2024 was 4.5 so most organizations on average already gave 4.5% an average increase

[00:29:49] to their workers now that can incorporate a number of different things some organizations say

[00:29:56] you know we're going to give 3% for inflation and then another percent on top of that for

[00:30:01] merit other organizations conflate those things together will be interesting conversation I think

[00:30:07] that we can dig into especially for salary budget planning season comes later in the year and I will

[00:30:16] say that SPS is although it's not open yet we do do a survey mid-year on salary increase

[00:30:23] planning so if that is something of interest to you we'll have to see what the actual number

[00:30:27] ones in 2024 versus the plan number and also what people are preparing for 2025 that will be open for

[00:30:34] participation soon so you know keep an eye out for that pumping up opening yeah thanks for calling

[00:30:41] that Amy out so yes our salary budget survey which is an annual survey we do we're going out

[00:30:47] to fielding and results come out in July and I've scheduled in us to record a podcast then

[00:30:54] Amy so we can dig into the results from the salary budget survey okay so let's close out here we can't

[00:31:03] not talk about one of the most talked about topics of the year which is AI and we dug a little

[00:31:09] deep into AI this year because we knew it was something people were interested in so what were

[00:31:14] the key kind of headlines we saw Amy in terms of what people are feeling and thinking about AI

[00:31:20] yes I think AI is going to continue to be a fascinating topic throughout this year and in

[00:31:26] future years we are now transitioning from the age of information to the age of AI it's going to have

[00:31:32] ramifications on our economy that we can't yet we can't yet know what that's going to look like

[00:31:38] but we did ask our audiences in the report what best describes your personal sentiment

[00:31:43] around AI generally not generative AI specifically but kind of AI holistically

[00:31:49] um as a term artificial intelligence and answers were fairly split 49% were positive overall 17%

[00:31:56] were pessimistic and 34% were unsure we also asked the positive responders what they were excited

[00:32:01] about and the negative responders what they were concerned about and while there are multiple

[00:32:06] answered choices the biggest excitement is for the potential of AI to reduce unfulfilled work

[00:32:11] and the biggest concern with AI is that it will extend bias rather than mitigate it we've seen

[00:32:17] quite a lot of news I think on both of those topics recently um Louie Kiergitz on your tag

[00:32:22] especially regards the bias yeah I mean AI is going to be a great tool but until we get the

[00:32:29] bias kinks from those programmers out of the tool itself it's still going to be

[00:32:33] a problem and I think um legal entities like the EEOC the Equal Employment Opportunity

[00:32:38] Commission recognize that because they've said they've come out and they've said

[00:32:43] hey organizations if you guys use AI tools in recruiting and hiring and making any sort of

[00:32:48] decisions and that AI tool is inherently biased or discriminatory hey guess why you

[00:32:55] guys are on the hook so that's why I think it's going to be really important for HR professionals

[00:32:59] and current professionals to stay on board with companies who are using AI because we

[00:33:03] still need that human gut chuck and we still need that human set of eyes on any decision that

[00:33:07] AI is making many states on the legal side we are seeing um like California and New York and New Jersey

[00:33:16] are actually proposing laws right now that will if pass will require employers to disclose whether

[00:33:21] they are using AI and their recruiting practices and California is even taking it a set further

[00:33:27] that if passed if organizations do use AI in the recruiting process those organizations

[00:33:33] are going to have to allow candidates to opt out of AI and actually say like hey I'd like a human

[00:33:40] set of eyes look at my resume as opposed to this bot who's just gonna look at my resume and compare

[00:33:44] it to the job description so I think lawmakers are very are heightenedly aware of what this could

[00:33:51] do um for the industry so I'm glad to see that we're seeing the laws at least making their way

[00:33:55] through the legislative process right now yeah I think it's going to be really interesting to

[00:34:01] watch that development now we took we asked people what they thought about um AI sentiment

[00:34:08] generally did we ask them about their view about using AI in compensation Amy? We absolutely did and

[00:34:13] I think the results there are even more fascinating so we asked uh what is your organization's

[00:34:18] overall sentiment around using AI to make compensation decisions and again this is AI

[00:34:24] generally not generative AI but the hype news up in the 23 um uh news cycle but uh in asking about

[00:34:33] use of a hyperclump decision 58% were undecided 31% are cautiously optimistic 12% are against it or

[00:34:42] actively prohibited and only 7% are totally on board um we also ask a matrix question about

[00:34:49] what specifically organizations are using AI to do um for a variety of HR and comp related

[00:34:56] activities um from we're using this now to we are developing it to be are not using it have no plans

[00:35:03] to use it or I'm sure about using it and the results there are pretty fascinating um what I think

[00:35:09] is interesting is just that 7% that are only 7% that are totally on board um when AI can can power

[00:35:17] compensation related decisions right now um if you are using software that has any automated

[00:35:24] processes um with machine learning or deep learning baked into that process then you're already using

[00:35:30] AI to make compensation decisions we are not talking about asking chat GPT to market price

[00:35:36] jobs for you um but if you are utilizing uh software that does calculations automatically

[00:35:42] for you there there is a element of AI that is involved in that so um I do think there is a lot

[00:35:49] of education that is needed around what exactly AI is how does it work um we need more transparency

[00:35:56] around what it does and why you trust it um but it can be pretty fascinating and I think

[00:36:02] pretty useful to reduce that unfulfilling work which is what the optimistic people were hoping

[00:36:08] for so you know you can use AI to draft job descriptions within product um we have a tool

[00:36:14] where you know 2300 job summaries have already been generated um utilizing AI technology and

[00:36:20] you can also use deep learning to uh match jobs auto match jobs or or to select surveys for you

[00:36:26] um that you may not know that is that that exists but could help you um match jobs so um

[00:36:31] there is obviously still a human judgment component of compensation management and

[00:36:36] that also needs to be you know emphasized with within the space but AI does have a lot of potential

[00:36:42] to reduce some of that um burdensome manual work and I think that that is pretty fascinating

[00:36:50] yeah and I think great thank you like Amy said sorry Ruth I didn't mean to cut you off but

[00:36:55] you know like Amy said AI is going to help it's a productivity tool but it's not going

[00:36:59] to do the work for you it may get you 75 percent there but that additional 25 percent if

[00:37:05] that is going to be required work for a human especially human called professionals so if you

[00:37:11] make any pay equity mistakes because AI told you this is what the salary should be you can't blame

[00:37:16] the technology and actually the EOC is suing one of a very large um HR software company right now

[00:37:24] for this exact very thing but you know you have to always make sure that there's going to be a

[00:37:30] human check and a human sort of eyes on anything that AI does well it's more like a recommendation

[00:37:35] engine so if you think about utilizing Netflix or um some some other streaming service where it says

[00:37:41] you watch the show would you be interested in the show um that's an example of AI so you use

[00:37:46] this survey to price jobs are you interested in this one for these other jobs that we see that

[00:37:50] you have that's AI I think a lot of organizations can utilize that it's just the human judgment

[00:37:56] to put on top of that you can't just rely on it to do all of the work for you um that's not a best

[00:38:02] practice and I know that we um you're running out of time on this particular podcast there's a ton

[00:38:07] of content related to this for uh World at Works Total Rewards 24 conference that is coming up

[00:38:13] later this month and Pace Gale is on a panel with um Ben Yerbanks and uh Jason Abbergook

[00:38:19] and Elizabeth Crowfoot from Lightcast and that should be a really fascinating deep dive into

[00:38:25] this topic with all of those experts on the panel together and here it's already like a field room

[00:38:31] like they've already already closed it out but um yeah there's a lot of discuss around this

[00:38:35] topic I think a lot of um you know potential for overhauling and improving industry

[00:38:42] well that's that's a great segue mentioning World at Work there um Amy because that is

[00:38:47] exactly what our next episode is going to be about um so we'll we'll delve into everything

[00:38:54] that we think is going to be happening at World at Work and I'm going to be joined by a couple of

[00:39:00] Pace Gale colleagues who will be hosting sessions there along with myself so that is going to be

[00:39:06] our next episode but thanks to both of you for sharing your favorite um insights from CBPR I know

[00:39:14] we all love it it gives us lots of food for thought as we think about creating thought

[00:39:18] leadership and working with our customers and prospects so thank you both very much Lulu

[00:39:23] and Amy for joining me today um if listeners want to find CBPR Amy where can they find it

[00:39:30] yes it is on PaceGale.com under the research and insights tab on the main menu there's also

[00:39:39] banners everywhere pointing to it so um go download it there it is free to download you

[00:39:44] do not have to pay for the result of the survey nor do you have to have been a

[00:39:48] participant to download it it is available to everyone. Great and I think we also talked a little

[00:39:53] bit about AI and what PaceGale are doing about AI there's also a page you can find on our website too

[00:39:59] under pay under solutions um and that will kind of get with a new landing page that we've just

[00:40:04] put up which kind of brings together all the activities we're doing on AI so if you're

[00:40:08] interested to hear what we're doing here at PaceGale then go and check that out okay so

[00:40:13] thank you everybody and that's what we think um do grab a copy of CBPR have another coffee and read

[00:40:20] CBPR and let us know what you think uh you can always email us at coffee at PaceGale.com

[00:40:27] and tell us any interesting snips that you found in in CBPR or for something else you'd like us to

[00:40:32] discuss here on Compton Coffee thank you all very much and we look forward to seeing you again soon