There’s something exciting brewing in the compensation industry.
Here to share what’s coming down the pipeline is John Sutliffe, SVP and GM at Payfactors.
John joins our hosts to talk about a survey he recently completed in conjunction with Human Capital Media, and what the findings mean for the future of comp data.
As always, if you like what you hear, be sure to subscribe and give us a 5-star rating!
And (SPOILER ALERT!) if you want to learn more about the free comp solution discussed in the episode, check out Payfactors Free here.
For a full transcription of the episode, see below.
Shawn: And we’re live. Welcome to another great episode of “Comp + Coffee” with your disgusting sounding host this morning. Sound like hell, feel great. I’m Shawn Lavana. I’m joined as always by Kaite.
Kaite: Hi, Kaite Rosa.
Shawn: And Kaite, we have somebody special here today with us.
Kaite: We do, we do.
Shawn: It’s the myth, the legend.
Kaite: The man.
Shawn: The man who ran for four touchdowns in a single game at Polk High.
John: Pinkerton Academy.
Kaite: You always say Polk High, why?
Shawn: Same thing. Maybe watch “Married… with Children”?
Shawn: Nobody gets that joke?
Shawn: Do you get that joke?
John: Al Bundy?
Shawn: Al Bundy, his great story was always that he ran for four touchdowns in a senior game at Polk High.
John: I thought his greatest accomplishment was being a shoe salesman.
Shawn: Prior to that, the best accomplishment he had in life was four touchdowns at Polk High and he would always recount those days.
John: Wasn’t quite for touchdowns, but I did actually throw for a touchdown, catch a touchdown, and rush for a touchdown.
Shawn: Do you want to relive that day? Do you want to take us back?
John: I do, I do. I would like to. I would like to do that.
Shawn: I don’t think you’re here today to talk about that, but maybe in another podcast.
John: No, no.
Kaite: However, what you have to share is probably just as exciting.
John: Absolutely, it’s true.
Shawn: So, John, welcome.
John: Welcome, thank you.
Shawn: Thanks for joining us today.
Kaite: Not your first time on “Comp + Coffee”. You were on previously on our episode about what books you’d recommend?
Shawn: That’s right, that was his…
John: Yes. That was early, early days.
Kaite: Yeah. That was a while ago.
Kaite: But we’re bringing you back.
Shawn: That was his rookie appearance.
John: I’m glad to be back.
Kaite: Team you up for today.
Shawn: All right, John, so you’re here today to talk about something interesting that you recently studied. You conducted a survey and we did this in partnership with Human Capital Management, it was around smaller businesses and their views on compensation, you want to talk a little bit about that?
John: Yeah, absolutely. So a lot of great research went in from a due diligence perspective to help us understand a little bit more about the market, you know, partnering with organizations to assist in that process was really, really critical for us. Since, so the data came back, it was really interesting. There were some great nuggets that were pulled out through that research and through those findings, but there were definitely some key takeaways and some of those include, and certainly not limited to, but some of the ones that really resonated with us were tight labor market, right? We know today’s marketplace is extremely competitive, tougher organizations of all sizes more specifically in the smaller segment to compete for, you know, talent from a recruitment perspective and in addition to that, you know, just from overall retention and attraction perspective. So that was really critical, right, the need to really understand the market in tremendous ways.
We also know that in smaller organizations, what we found, probably not going to come to a surprise to many, but oftentimes these HR professionals wearing multiple hats, right? So, extremely time constraint, right? Compensation, probably about 10% of what an HR professional is doing within a 250-person organization but keep in mind, you’ve got to think about all of the other things that these people are dealing with, you know, applicant tracking, payroll…
John: …office administration, everything, wellness programs, EAP programs, benefits, right? Comp, you know, just wearing multiple hats all the way around. And so, you know, comp is being certainly a big part of what they’re doing. It’s not this single thing that they’re doing, right? So time constraints was really a challenge there. Also, when you think about resource limitations, you know, this is a team of one, quite candidly, maybe you got two people…
Kaite: Doing all of that.
John: …doing all of that, exactly. You know, I think some of the people that we talked to, they did have maybe an in-house recruiter, but for the most part, it’s like one person, you know, doing all of these functions and sometimes not even HR, these are functions that could be part of, you know, you think about a 20-person company, you might have an office manager.
Kaite: I was going to say it could be your office admin who’s also doubling as HR depending on how big your organization is, right?
John: You got it, an owner, a founder, you know, it’s so interesting the dynamics between organizations within that market segment and there are, sort of, micro-segments within the sub-250 marketplace, which was pretty interesting. The other thing is, you know, these organizations, they need to stay, like, relevant, and compete, and current with what’s happening. And so having to rely on stale data, data that hasn’t been refreshed or accessing information from a friend or a colleague or free sources…
Kaite: I was going to say the phrase, like, employee reported.
John: Yeah, just is not going to cut it. And, you know, even smaller businesses, they’re competing against the big guys and so it’s important to know, like, what the next-door neighbor is paying for talent across all functional parts of the business. And, you know, not having access to that is, you know, hurtful for them.
Kaite: Yeah. And when we say small businesses, we’re not talking necessarily about, like, mom-and-pop shops down on Mainstreet, which though they could be a part of it, like we’re talking about just organizations that are in their early days maybe or, you know, like you said, I think you said under a couple of hundred people.
John: Sub-250, you got it. I mean, absolutely. I mean, even Payfactors is, sort of, on that cusp in terms of we’re right at that little inflection point right there. But, you know, the other biggest thing, and I definitely want to hammer home this point because this, by far, stood out the most, organizations in this market segment have either no budget or a lack of, you know, limited budget for survey data, right? It’s not something that they think about in terms of when they’re putting budgets together.
Kaite: Even if they have the budget, if it’s one person doing so many things, you know, the surveys take an incredible amount of time to do and complete. I mean.
Shawn: We’ve experienced it before, right? One of the things that we’ve seen, not here, but in a previous place where we worked was, together, all of us, was that they would buy a survey. A survey, we had multiple office locations. We were a small business under this, right? I think we’re a couple hundred, probably fewer than a couple of hundred people at the time.
Kaite: Actually, we were, yeah, like…
Shawn: Few offices and they would buy a survey to try to cover all those geographic areas, all the jobs, right? Which as we know all the time, a marketer is not a marketer, is not a marketer, a developer’s not a developer is not a developer then add the geographic component to that, you’re not going to get an accurate read of the market but that’s the best, typically. It’s either that or use that thing, crowdsourced data.
Kaite: And we were trying to compete…and we’re doing the same thing here, trying to compete with, you know, we’re outside of Boston with Payfactors, that company you were talking about was right out…
Shawn: We were recruiting from big publicly traded companies, right? We were recruiting for the big guys because we were growing that fast as well. And so to your point, John, it’s like your tight labor market, right? Yep. So few people out there, you gotta pull people away, you do that with compensation, typically, at least that’s the start of the conversation. We want to make sure that you’re retaining them then, and paying them fairly for what the market is, right? So your main competitive…Oh, by the way, you have little or no budget to do this.
John: Yeah, yeah. Yeah, so what’s left? You know, what’s left for you to do?
Shawn: Yeah. How do you do it.
John: So this research fed into the Payfactor Free offering.
Shawn: So what’s the Payfactors Free offering, John?
John: Yeah. So we launched on April 8th, we launched Payfactors Free, which is a free solution to all organizations, you know, primarily geared towards the small, midsized market segment, if you will. We firmly believe in the complete idea of data democracy, right? Like, let’s eliminate the barriers, let’s put data out there, let’s give it to organizations, allow them to access jobs on a limited basis, if you will, right, by their particular scope, which is fantastic.
And when you think about a smaller business, they want information that is quick, easy, simplified, modern UI and the ability to market price jobs for projects or ad hoc needs, things of that nature. I mean, can you imagine like an HR professional dealing with someone coming into their office, you know, a manager that’s saying, “Hey, you know, we need to help price, we’re losing IT developers left and right. What’s going on here?” And in three clicks or less, these guys have access to that information now at their fingertips.
Kaite: It’s free?
Kaite: Really free.
John: Free, free, free, free, free.
Shawn: It’s free.
Kaite: Okay, so it’s free.
John: That’s free.
Kaite: Got it.
John: Yes, so we’re psyched. It’s great.
Shawn: All right. So it sounds like it solves a lot of these needs that the survey found out there. How are you seeing people use it so far?
John: Yeah, so the uptake has been fantastic. And, you know, for the past few months it’s been, sort of, in a soft launch, kind of, mindset. What’s really cool is people are utilizing Payfactors Free for a number of different things. You know, when you talk about the recruiting and retention aspect in a tight labor market, I mean, this puts that information, HR-validated data at their fingertips, right? So it’s going to help in that capacity. We also know that there are times and needs for ad hoc market pricing requests that, kind of, come in, don’t know when it’s going to happen, but it does come in from time to time. And these organizations are also doing project-oriented work where they’re doing a complete study on their organization and it might be 6 weeks, 8 weeks, a 12-week time period where they want to come in and really focus on what it is that they’re doing and they can leverage Payfactors Free to assist in that capacity.
Other organizations, as they, you know, tend to become slightly more sophisticated and strategic with their business, we’ll turn to us for a little bit more formality around their, you know, pay practices as they think about their business unit or department really honing in on what their methodology might be from a pay philosophy perspective is going to be. The ability to have really cool insights and reporting, right? Organizations, you know, you guys probably have done even “Comp + Coffees” on this like pay and equity and gender pay analysis, things of that nature to like…
You know, Payfactors Free is going to allow you to be, you know, kind of, strategic with some of those decisions as you upload employee-level data, compare that to the market and do some analysis on your various business units, and departments, and things of that nature. So, you know, that’s another strong area that people, you know, gain value out of the solution. Remaining competitive, competitive intelligence, being able to understand what the market is paying for these jobs keeps you competitive.
Shawn: So that you’re actually market pricing, not just responding to, “Hey, here’s your 3% raise this year because that’s what we have budgeted,” you’re actually thinking about what’s happening out there in the market.
John: Absolutely, without a doubt. You know, I’d say one of the most important things that they’re gaining a lot of value out is being able to connect and engage with likeminded individuals. You know, it’s a great community component to…
Kaite: As part of Payfactors Free? Oh, cool.
John: You got it. Part of Payfactors Free, you can, kind of, come in engage, you know, we’ve got surveys, quizzes, polls, you can like and comment on a number of different HR-related topics.
Kaite: Kind of like a social media platform?
John: You got it, yeah, really cool. So that’s getting a ton of uptake and we’re excited about that.
Shawn: Yeah, that sounds good. So if somebody wants to try this out, John, where do they go?
John: Yeah, you go to payfactors.com/free, fairly simple. It’s probably a 30-second process to fill out a couple of fields and hit submit, create a password, and away you go. You’ve got access right away and before you know it, you’re pricing jobs and gaining a lot of value.
Kaite: Awesome. Again, that’s payfactors.com/free.
John: You got it.
Shawn: All right. Well, thanks for coming on today, thanks for sharing what you found in the survey, thanks for sharing about Payfactors Free. Have you on again soon.