For our February event, we took a dive into a topic that affects anyone who is (or wants to) draw a salary: compensation. Alex Moore from Moore Cooperative walked us through the ins and outs of how companies figure out how much to offer their prospects and how that has to fit into the ongoing world of what they’re paying their current employees.

It’s a messy world of competing interests and priorities, and a misstep can quickly snowball: hire someone at a rate that is “too high” and then have them stick around for years with steady percent salary increases, and they can suddenly be compensated outside of the organization’s defined pay bands.

Of course, the pay bands are tough to maintain, too. Reliable market data has a limited shelf life, and figuring out the “right” compensation is more than just matching job titles. The same level and title in one industry may get compensated wildly differently in another industry (often because the role itself is quite different). The cost of living varies widely across geographic regions, too, so that has to be accounted for, but then what happens with remote workers who choose where to live (or who choose to move!)?

Did we mention that pay bands are nice idea, but they can be maddeningly challenging to put into place when an organization is working to maintain a strong and enduring workforce? According to one study, more than 20% of employees are paid outside their company’s official salary ranges!

Of course, compensation is more than just salary. Enter the “total compensation” discussion: health insurance plans vary widely when it comes to their coverage and cost, 401K matches can be anywhere from nonexistent to generous, paid time off can be flexible and expansive or stingy, and even in-office requirements can be Draconian or casual. Some of these aspects of compensation are negotiable, and both Alex and an attendee who is a full-time compensation analyst vigorously agreed that every offer should be negotiated!

Alex covered a number of additional aspects of this space:

• Varying regulations—country (although not the U.S.), state, and city-level requirements for pay transparency (the more you know: in Cleveland, employers with more than 15 employees must include salary ranges in job postings; of course, they can always try to take a page from Netflix and claim a salary range of “$150,000-900,000”)
• Varying efforts by companies to make their pay “fair”—from deep dive analysis of their comp program and processes to instituting remediation plans to committing to pay transparency
• Generational divides—one study showed that 89% of Gen Z employees are comfortable sharing their pay with their colleagues (which makes the Gen X author of this recap clutch his pearls)
• Gender pay gap—yep, it’s still a thing; it was at least closing there for a while until COVID came along and appears to have reversed that trend

The audience was engaged and had a lot of questions. It was hard to not get to some biggies, like the question about how we know information asymmetry generally contributes to inefficiency, so why don’t companies just go with full transparency as the norm‽  Well…it’s complicated. But it was fun to ponder with the group!

Slides from the event:

And some pictures!