Episode Description

Episode Description

We have a guest today whose sole focus is to teach you how to leverage your career to make more money! His name is Trapper Yates. Trapper will inspire you to take risks. He will give you the tools you need to move past your apprehension, and get out of the rut you find yourself in.  

Talking Points:

{06:03} Taking the risk, stepping away from your day-to-day, and starting a new career path.

{07:49} The tools you need to move past the apprehension stage

{10:04} The importance of not being short-sighted.

{12:27} Advice for the person that's feeling stuck

{20:13} The importance of understanding your salary midpoint

Resources/Links: 

Learn about Trapper: https://www.linkedin.com/in/trapperyates/

Connect with Tom onLinkedIn: https://www.linkedin.com/in/tomfinnleggup/

Follow Talent Empowerment onLinkedIn: https://www.linkedin.com/company/talent-empowerment-podcast/

Connect with Tom Finn

LinkedIn: https://www.linkedin.com/in/therealtomfinn/

Instagram: https://instagram.com/therealtomfinn

YouTube: https://www.youtube.com/@therealtomfinn

Tiktok: https://www.tiktok.com/@therealtomfinn

Twitter: https://twitter.com/therealtomfinn/

Facebook: https://www.facebook.com/therealtomfinn

Pinterest: https://www.pinterest.com/therealtomfinn

Episode Transcript

Transcript Trapper Yates

Welcome to the Talent Empowerment Podcast, My Friends, where we lift people as leaders so you can lift your organization. I am your host, Tom Finn, and today we have a guest whose entire focus is to teach you how to leverage your career to make more money.

His name is Trapper Yates, Trapper, welcome to the show, my friend.

Thank you.

It's good to be here, Tom.

Well, look, if you don't know Trapper,  he started his career in finance and accounting, but soon found his interest in people, strategy, pulling him towards the world of HR. As a result, Trapper pursued his MBA with a strategic HR focus and ultimately landed a job at HP, where he had the great fortune of starting in their rotational HR management program. What's great, though, is that over the last seven years, his focus has been on compensation. He is currently serving as the head of global broad-based compensation at HP. My understanding is that there are about 60,000 employees at HP today, Trapper?

Yeah, 53ish.

There are 53Ish. 1000 employees worldwide. Now, outside of work, he enjoys spending time with his wife. He's got four great kids. He stays active outdoors in Boise, ID. You can frequently find him coaching soccer, skiing, running, or riding his bike. He's completed over a dozen endurance races, including the Boston Marathon. The Speedgoat Trail 50K and, most recently, a 70.3 half ironman, before we get into business, what on Earth is a speedboat trail 50K?

Yeah, so the Speedgoat is a race created by a guy named Karl Meltzer, who has the nickname "The Speedgoat. He's a big mountain runner, and this race is down at Snowbird Ski Resort in Utah, which is well known for its big mountains. You start at the base of the hill where you run if you're a professional. You grit it out and kind of hike your way up to the top, if you're like me, you run down the back and come back up. So, it's about 31 miles and 11,000 feet of vertical gain during that 11th out of those 31 miles. So yeah, pretty intense. I've done it three times. It's been a few years since I last did it.

Well, fair enough. With four kids in tow, I can't imagine there's a ton of time to train, but I think that's spectacular. And tell me about your half-Ironman as well.

Yeah, half Ironman. So, I've had kind of the bucket list goal of doing a full Ironman and had a friend say, “hey, you should sign up for this. I and another guy are doing it” This was last year.

And so around Christmas time, around December, I said, OK, let's sign up, and the race was May 1st. I went and bought a road bike. I mean, that's how prepared I was before this. I went and bought a road bike, started getting in the pool to swim a little bit, and yeah, it's 70.3 miles between the bikes or the swim bike and runs. This is a good experience. I hope to do a full Ironman one day, but like you said, with four kids, I need to find some time to train. I want to feel good about it when I go into it.

Yeah, fair. Fair enough. And you're not all about outdoor sports and being a family man, although that probably comes first early on in your career, you did some other things around finance and accounting.

So I'm going to go ahead and guess that you know your numbers. What got you interested in moving from finance and accounting? into compensation, which is such a specialized area of a business.

Yeah, absolutely. So, like many others, I began my career not knowing what I wanted long-term or having a clear vision of what I wanted. So, I started with a company that just put me into this great program to develop financial and accounting individuals, and I was doing project manager or project accounting work. Some of you know, financial types work like that. I did that for about 4 1/2 years. And as we came into the Great Recession started, I think some companies were coming out of it, but because of the nature of the construction industry and engineering, we were still dealing with it and I had a chance to think.

For me, it was like I looked ahead and thought, "If things go just as well as they possibly can over the next 10 years, where do I see myself? Is that where I want to be? I felt like the answer was no, and I didn't know why. I just didn't care about the accounting side of things and crunching numbers all day.

But what I had done at that company was, early on, I asked for the opportunity to help out recruit for this program and go and recruit college students into it. And so, I did. That's a total of four and 1/2 years that I was there And so I started to think, what about a career in HR?

The talent acquisition side doesn't link to anything with numbers. But I knew I was probably going to do an MBA eventually, so I stopped working and went to do a full-time MBA and switched my focus from finance over to our great opportunity to meet a lot of great people at a lot of great companies took a role at HP and, as you mentioned, this management associate program. which allowed me to experience not just talent acquisition, which I thought would be kind of my true passion, but also succession planning, which is what drew me to the world of HR. But I also did a comp role, and I did a business partner role. And as a result of that, I felt like my skill set was well aligned to the compensation world and having a background in finance, and it was something that I enjoyed: tying the people of the numbers together; thinking about how to motivate and energize people around compensation and total rewards programs.

So, I have, as you mentioned, been on that path since and have enjoyed it.

You said something really important there: you said that you took this risk to take on different roles and get into a rotational program. Most people wouldn't do that. They'd stay in finance and accounting and sort of put their heads down. We'll give you the confidence to be able to move within the organization and then, ultimately, find what you are looking for.

Yeah, I mean, I think the biggest risk, if I look at it for myself, was, like you said, stepping away from your day-to-day and saying, "You know, I'd spent four and a half, five years in finance and accounting roles, and I saw a career path there, but it just didn't excite me.

As a result, I felt like I had a long career ahead of me. Is this really where I want to go? I don't know that it gave me full confidence, but I also felt like I already knew myself. I believe that if I am doing something I am passionate about and following something more interesting to me, I will perform better. And I think, ultimately, it's going to lead to better outcomes. And there were a lot of people, frankly, because we were coming out of the Great Recession.

Like 2010. So, as I said, a little bit past, but you know, a lot of people said, "Why would you quit a good job? Why would you know that you survived these layoffs and different things? Why would you? Why would you quit?”

So, there was a risk there, but I just did my research, did my due diligence on what I thought the opportunities might be, and then took them. Same thing with HP; it was a structured rotational program, which was great. But trying to find that spot where I fit best was difficult. Honestly, when I first took a role in the comp, I didn't think, hey, this is maybe my forever path. It's just something I wanted more experience in, and I have been open to other opportunities as they've come along. It has simply been the compensation space that has provided me with opportunities and has been extremely beneficial. It's a good fit for my skill set, so that's where I've spent my career.

So, what helped you move through the organization and get there? Because you mentioned it didn't sort of cover your whole amount of fear? You weren't able to sort of absorb all of it. There's some sense of apprehension there. What helped you get through that apprehension and what helped you sort of move through the organization?

I think saying yes is huge. Somebody told me that early on in my career, like, looking for opportunities to say yes and not no when you say no to an opportunity or close a door. And certainly, I sort of did close the door on one, like a finance and accounting career, but I felt like there was a better path in this open door.

But, you know, I never want to burn a bridge, and if someone says, "Hey, would you mind spearheading this project or taking on this work?" I've always tried to say yes. I will try it and I will, you know, I'll do my best. One other thing that I remember when I was early in the comp world here at HP is that I was managing compensation for different groups.

I managed global functions. I managed it for one of our business lines. One of our business communications managers was taking on a new role, and it was going to leave a vacancy covering one of our big businesses, so he asked. Can you tell me, hey, can you? Can I transfer this to you, and can you handle it in the short term? But I don't know how long that's going to be, and so once again I said yes, and then I remembered. I was talking with him, and I was like, so how would you? If you approached this, would you just keep the ship afloat because, you know, this could be three months, six months, or a year? Or would you set up the, you know, set up meetings with the business leaders, start to understand their concerns around comp, dig in, kind of like what I do with my other groups and, he said It depends on what you want to get out of it. You know, if you look at everything with the mindset of "I'm just going to keep the ship afloat." I'm only doing it for the short term, so you're not going to come off as a very committed person. And so, I took that to heart too.

And I tried to do the same thing with that business and met with the leaders to understand their comp concerns. I was being proactive with the solutions that I was bringing to them instead of just being there to answer questions and kind of keep the ship afloat.

And so, I think That mentality is huge. You know, don't go into something with a short term. I'm just going to do this and get through it and keep the ship afloat. I want to do the best I can in everything I do

So I think what I heard was, "Yeah. And then take a long-term strategic approach to whatever the project or task at hand is. Don't be shortsighted.

And I think people recognize that commitment, right? And you're not doing yourself any favors if you just as I said, keep the ship afloat.

So, I can't go any further in this discussion without asking the $1,000,000 question that everybody wants to know the answer to. And it's on the tip of my tongue. I know everybody listening is saying just ask him the question, and the question is very simple. How do we all make more money in large organizations? You have the keys. How do we make more money in a very large organization's compensation structure?

Oh, the $1,000,000 question indeed. And I wish I had an easy answer for you to that question. You know, I do feel like at HP, and I think most big companies, we've got very developed pay programs, but we do want to be, certainly at HP, a pay-for-performance organization. So, we obviously tie a portion of somebody's pay to their salary, and then we tie a portion to variable programs like bonuses and like equity programs And so I think what some would say is the scapegoat answer is that if you perform better, you'll make more money, right?

That is what internally within a company that we would love to say 100% of the time that the answer is that the best performers do the best.? But, you know, you and I both know, and everybody listening probably knows, there are a thousand nuances. You know, oftentimes if you're doing the work that you love and that you're good at You're going to perform better, you're going to make more money, so I think there's a lot there, certainly not a quick or easy answer.

Well, I think it's a good start, right? We've got to figure out what we like and how we can perform at a high level, and I love to pay for performance organizations because it incents the right behaviors, and it aligns the vision and goals of the individual with the goals of the organization.

And so to me, that's the most important first step is aligning. Those are the components.

So, what do you say? to somebody who's feeling stuck. And it, you know, believes that they should be making 20–30–40 thousand dollars more than they're making today. And we could exchange that into euros or yen or Canadian dollars for our friends around the country or the world. But what do you say to someone who is stuck and just wants to take the next big jump?

There are a couple of ways to look at this. One is the internal view. You know, if you love your company and are content with your current situation, you have good growth prospects. My advice to that person is to be open with their manager. You know, one of the things that we do, as we've tried to do manager training sessions and as we've done employee training sessions, shows people what the timelines are that we typically look at compensations. So, most companies have an annual sort of focal review process, you know, and that's when you look at the performance you get in some companies or the performance rating you get, oftentimes your bonus time is tied to that performance. So, if you get a salary adjustment at HP, it's usually a merit adjustment, but it's market-based. So that's the biggest opportunity when you know you're going to get your salary, or your compensation touched. And then at HP, we've got these checkpoints that happen just a couple of times throughout the year, and it touches a much smaller percentage of the population.

But we tell employees, here's the timeline. So, if you go to your manager a week after this comp checkpoint and say, "I need to make more money, first of all, it's not a great approach, but second of all, the timeline just passed. I would say once again if you're internal, you like things about the company, you like your opportunities. Have that conversation with your manager.

“I think, based on research I've done, I think my market rate should be closer to this. What can I do? How can I prove to you that I'm worth this? And what's the timeline on which we could reasonably expect that to happen?”

I think some managers will be uncomfortable with that, saying, "well, HR won't let me” or whatever the case may be. But the bottom line is that, at least at HP, and I believe at a lot of companies, managers have a lot of power to influence that funding pool that they get or start, you know, sharing with leadership. This is a key employee. These are the things that I would like to do and it isn't a short term, I'm going to do this for you in a week, but it could be, you know, let's talk about this and next year let's see if we can get you a larger increase, things like that. So that's internal. Externally, if you don't like it if you're not in a happy situation at your company if there's more to it than just the pay.

You know, I think there's a lot of research that shows that the premium, the leaving premium, is typically higher than those that stay, and that's not an ideal situation. Believe me, we look at that internally too and go, "How can we make it a more lucrative thing to stay”, but something we then focus more on? What's the culture? How do we get people to stay? You have to have a base level of good compensation, or else people just aren't going to be happy.

Once you've hit that, it's other factors, but so people that are not happy with their situation, want more money, start looking around. If you're good, you've got a good resume. Even as things kind of slow down, I think there's always going to be opportunities for people like that.

Yeah, there are always opportunities for great people, and I love the way you set it. You've got an internal view, you've got an external view, and you've got to look at compensation as a part of the whole. It is not the whole thing.

And how many times have we heard people leave the organization, jump across the street for 20-30, forty, or $1000 more, which sounds fantastic, but then regret that decision only to be on to their next company a year or two later, or looking to return to their original company where the culture was a better fit? The management and the leadership were just a better fit for them personally.

Yeah, we see this with great resignation, and now the research is coming out about how many people regret that decision. I think it's like, you know? well over 20% of people. I think it was 20% don't regret it like there's a high percentage … I have to look up the numbers that say, "Yeah, I'm not sure I made the right decision," right? So, I've seen it, you know. Since graduating from my MBA program, a lot of my colleagues, many of them you know over the course of the last 10 years, have been in their 3rd, 4th, or 5th companies, and sometimes that can work. But if you're in a situation where you have good growth opportunities, you like your management, you like staying at one company, having that stability is not a bad thing at all.

It is not a bad thing at all. But where do you go and what do you do if you feel like we can't have that conversation with your manager? Or maybe said differently, your manager doesn't understand this component, this compensation structure.

Maybe they don't articulate the timelines well. What do you do with that manager piece?

I think that's a really tough question to answer. Once again, going back to a good manager, if you've got a good manager, I think you're going to be very happy. You're going to have a very good day. And if you, first of all, don't feel like you can approach your manager about this, I think that's a red flag to me. If you don't because everybody knows why we come to work, you know, sure, we want to contribute and give back, but at the end of the day, we all need to make money too, so it should not be taboo. I will bring it up with your manager. How can I do that?

Do this Your second point is certainly well taken because I think a lot of times managers just don't have the context or the full understanding. And we, we know, like I've heard within our organization, deep within the organization, we'll hear things like, "Well, I can't hire above this midpoint, or I can't do this.

And it's like, "Wait, who told you that? We have a range. Within that range, you're free to hire within your business's affordability. These are legacy mindsets that have kind of come up as maybe there were times that were leaning, and people were reducing and making hires lower in the range.

So, I think there are a lot of managers that maybe don't understand it as well. My advice to somebody dealing with that is to still have the initial conversation with your manager and then poke around the organization. I mean, it's hard to say at a company with, you know, over 50,000 employees, that it's not always a direct line to someone in HR or someone in compensation that's going to be able to help you with that.

But I will say we've got a very open-door policy and I've had employees ping me on Zoom that I do not know at all and ask me a question, and you know, I just try to try to be patient and we've got a lot of training resources as well on our internal intranet sites.

And so, I typically try to direct people to those, but it's tough to say that not all companies have that level of FAQs and education for their employees to understand it. So, I would have the conversation with your manager either way and then if they don't quite understand it, keep digging.

Yeah, and there's a point. There's a nuance, a very important nuance, that wrapper mentioned that I hope you all picked up on. If you didn't, I'm going to sort of draw it out a little bit for you. He used the word "midpoint”. And he said if you understand where the midpoint is or you're hiring at the midpoint, what do you need to know about? Every corporation has a range of salaries for a particular job title and job position. There are job codes, but without going too far, there's a low, a high, and a midpoint, and there is some legacy thinking that you can only hire external candidates. At a midpoint, right?

Or below.

Or below, right?

Yeah, at the high being the midpoint and during compensation reviews, the word midpoint comes up a lot behind closed doors. And so, help us understand how you ask that question within an organization without appearing to come off the wrong way or with the wrong intention.

Yeah, as an employee, you mean asking to have an employee.

Yeah, and you're trying to figure out where the midpoint is? Where's my salary? How do I do this elegantly without, you know, sounding like a jerk?

Yeah, absolutely. So, what we've done is we created this comp 101 training for managers and then we also kind of shared it with employees. And one of my favorite diagrams within that, that we've kind of built out to illustrate this point, is a salary structure, and it's just like minimum to maximum. As you said, with the midpoint, we have our separated into different segments, so we've got 5 segments there. And we tell employees that not every employee should be at the midpoint. That's what we want is a bell curve that kind of says you've got employees paid above, you've got employees paid below, but the majority are in that strong range. We say segment one is for people who are coming up to speed in the role. Maybe they're new in the role; they're not at full operating capacity.

Segment 2 is as you're starting to get more confident and comfortable and contribute at a higher level within the segment. 3.0, which encompasses that midpoint, is for people who are fully up to speed and competent in the role.

And segments four and five, that above midpoint sort of range, are employees that are above expectations in that role, performing at a high level and perhaps ready for a promotional opportunity when that comes along. Now, I would love to say that that's the exact way everybody is slotted within the organization, but it's tough. You've got, depending on where somebody was hired, maybe they came in higher or lower, and that doesn't actually necessarily refer to whether I liked it or not, but as an employee, you probably understand that, and I think most companies don't.

Employees aren't going to have access to their range and say, "Here's where I'm at," but I've told employees as well. Have a conversation with your manager and ask them. Hey, I'm just curious. How do you see my performance and how am I paid relative to my performance in my pay structure? I know I'm asking a lot of managers there, but we want managers, certainly within HP. If they get questions like that, that's great because those are the questions, we want to help them answer and have those really good conversations with their employees.

I don't think, once again, that it comes off as unless you're coming to your manager saying I need to make, you know, 20% more and I heard that all these people are making more, and I need to make more. That's not a productive conversation.

It's a productive conversation if you lead with performance; hey, this is how these are the things I've seen that I've done, you know? Can you help me figure out what my options are? Can you help me understand where I'm paid relative to my range and what my opportunities might be over the next X period?

Yeah, I think that's the beauty of a real adult conversation, which is that I have the performance laid out. I've done the things you asked me to do. I've gone above and beyond.

And I want to do this thoughtfully, within the right amount of time, and within the structure of the organization. Can you help me get through this? This is my point, and this is where I want to go. By the way, here's where I'd like to go in my career, right? Because this is just a step on a path, and I would love to be at the company for a long, long period. and not look externally, right? You use some of that language as you just laid out, and your manager is going to say, my goodness, any good manager, by the way, would say, let me do what I can to figure this out with you collectively, we'll work together and provide some level of transparency and support. Along the way,

Yeah, the thing I love about what you said is that, as an employee, you're indicating I intend to grow a career here, not just, you know, I got an offer for 10% more, pay me more.

The only thing is, it's really, I do want to spend my career. I like XY and Z about it. This would help me feel even better. So how can we get to that point so absolutely?

Yeah, I think it's really important and we all have to make those personal decisions on the city we live in and, you know, our transportation choices and where our home or apartment is, and all of those things take money to pay for, so it's critically important. But I've always thought that the most important thing about compensation is the way that you approach the conversation.

It's not what, it's the way and the style in which you approach your manager.

Agreed. Yeah, 100%. And this is, it's funny because, you know, I've got 4 kids, and one of the things about kids is that sometimes they'll ask you, you know, hey Dad, how much money do you make?

You know if I throw out a number, you know, what does that mean? Why are they asking that question? I should understand Why do you ask that? You know, and I think as a manager, it's the same thing as an employee.

If you're coming up with that conversation, you know, or the employee asking the manager, where am I paid relative to my midpoint, you know, you may not say, "Why do you ask that?" but you may say, "Yeah, I can, I can certainly look into that for you. But help me understand, you know, where you're at, how you're feeling. Do you feel like you know, you're looking for something different? Are you concerned about your compensation?

I think having productive conversations around compensation is better than just providing one-word answers and certainly doing this over email. And it's just like, "No, you need a conversation.”

These are important topics, and they can be sensitive topics, so understanding the nuances through a conversation face-to-face over Zoom is important. I think these are best practices for sure.

Yeah, that's a great one. Don't do this in the written word. Please don't do this in the written word. There is no way for you to explain it that way. For those of you who are introverted or believe this is too large a topic, uh, trust me. I've been there. Many people have been there. Write it down. It's OK to write it down. You just don't hit send. Put it in a document, take your notes, have your bullet points, and then get on Zoom.

If you can do it in person, that's even better, but it's OK to have a game plan. It's not OK to take that game plan and fire it off in six different paragraphs in an email because, trust me, it's going to get shut down pretty quickly.

Yeah, absolutely.

And I think the right way to frame it is to tell your manager you want to have a conversation about your opportunities in your career and, as part of that, better understand your compensation.

Once again, I think any good manager is going to see that as a sign of, OK, this person is ambitious. They're interested in compensation. which I can understand, and they want to have a conversation. I guarantee you; managers would appreciate that. I got an offer from a company, you know, across the 3 for X percent more, and I'm going to leave. Or can you count it? Do you know what I mean? It's like that is a late conversation, and I think managers prefer to have the conversation early and know how you're feeling.

Yeah, I think you're 100% right, and it sort of leads us down this path of the word transparency and pays transparency. And understanding different layers within an organization, where do you stand on the transparency of pay for employees?

Yep, that's the one. That's a tough one as well. So, as I think about pay transparency, I think you've got 3 levels of pay transparency. You've got the total black box, which I think about companies starting up or companies that just don't have pay structures built yet. They're kind of going to need to hire a head of product or we need to hire this person and we don't know what to pay, but I know this person and we'll have to pay him 10% more than whatever it is. You know, that's the black box. They don't even have a structure. They don't know what they should be paying you. They're not doing a good benchmark.

Or it's companies that maybe do have all of that, but they still don't want to share anything. They're just very quiet about it. OK, I think that's the lowest level. Level 2 is where I think you start to get a lot of big companies in this mode where you've got good structures developed, you've got a midpoint, you've got a progression through that range.

You share with the managers. You've got good processes for addressing pay, like an annual review. And that's a good point to be in some like maybe a two-point Some of these companies don't necessarily share ranges with managers or they share the ranges of the employees that work for them.

Maybe a 2.5 would be that they share all managers' access to all pay ranges, right? And that's kind of where HP is in that mode of, we're pretty transparent with managers. Here are the ranges, here's how we do our comp because we want to enable them to, uh, have those conversations with their employees and be able to manage comp to manage performance, you know, performance-based pay.

I would say Level 3 is where you've got complete transparency so employees can act well. Let's say this Level 3 might be all employees' access to all pay ranges. You know that way they can look and see where I'm at today in my range. Here's where I might be if I get that promotion, and here's the range at that point, and they understand all of that.

And then maybe the next level on top of that is that everybody can see, everybody pays. I don't think Level 3 and 3 1/2 are necessarily a good thing because I think some downsides come with that. Government entities are a great example of how you can contact most government entities, maybe all in the US. You can go out and look with the chief of police in your town. It makes you pretty easy. You can see their pay for the last X number of years, and we typically look at government entities as being the pinnacle of performance. Pay is typically very tenure-based and you grow through it, so once again, I think those are the levels of pay transparency.

I think there are arguments for moving into that third one where employees all have access to at least the ranges, but a lot of companies are at that level two of us have ranges. We try to empower managers, either by sharing all ranges or communicating with them. And I think that's where we see most companies or most big companies these days.

So, what's the risk? Of sharing all company ranges with the general employee population or maybe individual contributors that don't have direct reports.

My goodness, I can see my boss's title and I know that my boss is a senior director. Now I know what my boss makes. Is that the problem?

Well, I think the issue with sharing ranges is two-fold. It might be that, you know, there might be some of that, well, they can see that. That could also be seen as a motivator, you know, like, ooh, if I can get to that level, look at this range, and look at what possibilities open up to me financially, right? So, I believe you have a chance. That's a good thing, right? I think the challenge and one of the risks are that I think I feel some of this and I've talked to many peers that feel the same. This, as well, is: Your pay structures will frequently reflect the market, and you will often employ market-based compensation. You know, some companies benchmark to a higher percentage of the market. Other companies are going to benchmark at a lower percentile or right in the middle. And depending on what peer group you use; you might use a group that's lower paid. So, markets, although it sounds like a scientific term, it's an easy number to understand. There's a lot that goes into that, but you build your structures on the market, and we do that, and when we see the market move, we move our structure.

But business affordability comes into play, and so you've got really good years and you might be out of a really strong bonus. You might even have really good salary adjustments, but no overtime your salaries, and like I said, that midpoint curve, right, you know that curve of salaries right around the midpoint may not be the way that all companies are, and the worry is that you've got an employee that is a high-performing employee and they're paid below that midpoint.

And it's not because you don't want to pay more, it's just that you've been limited in budgets, you've had other priorities you need to take care of, and so all of a sudden there's a dissatisfaction that comes with that.

I'll share with you an example. The Sacramento Bee has posted all the salaries. There's a website that posts all the salaries of California State employees, and they did this study at UC Berkeley back in 2011. They gave people the link to this; you know, not that they didn't have access before, but they gave people the link. This shared individual salaries, right? And they found that the number of people that accessed it increased a lot when they shared that link with them. And about 80% of the people that were accessing it were, you know, looking at their peers and trying to figure out where they stood relative to their peers. You could say the same thing for ranges. Where do I fare relative to my midpoint?

And the outcome of it? They surveyed people that had accessed the data, and what they found was that the people who were paid below kind of the average of their peers. We're much more dissatisfied, so there are increased levels of job dissatisfaction and an increased likelihood of intent to leave. But you think, well, it's probably balanced out because, you know, you've got people that are paid well, and they're probably even happier because they know how well they're paid. That's not the way it played out, though. The people that were paid above are median or above their peers.

showed very similar levels of job satisfaction and no change in intent or likelihood to leave. So that, I think, is the fear and I think it's founded in some ways because you've but you're either going to have people upset because they're paid below midpoint or neutral because they're paid well and they think, well, I probably deserve that. And so, I think those are some of the challenges: maybe not being able to match internal salaries to the market because of historical or affordability issues, and secondly, the fact is, what good does it bring you? You're going to have unhappy employees and neutral employees. So, I think those are some of the challenges.

Yeah, it's a bit of a mixed bag when we look at it in terms of human behavior and what's going to happen as a result. There is too much transparency in particular markets, and it makes me think of what's happened in the last couple of years around the globe. And this question is for all of my friends that do not live in big cities and do not live in high-earning states. New York, California, you can think. of Chicago and, you know, some parts of Illinois. The Big Cities: Dallas, Houston, Miami, Atlanta, right? For the folks that are not in those cities, I had a friend of mine in HR. We were talking about this the other day. They had a great teammate in Minnesota who was working from home anyway because of the last couple of years. and was earning a Minnesota wage at the market and working for a California company out of the Bay Area. He came and said, "Hey, it's a new world. Uh, we don't mind if you work from home in Minnesota. You don't have to move to California. But oh, by the way, there's a 15% pay discrepancy between California and Minnesota, so let's just start there. You get a 15% increase, and oh, by the way, you're actually below your midpoint for your job.

And we'd love to have you join the company. So, we're going to add another 10% to get you just above the midpoint. And you don't have to move a muscle. You can stay right at that home office that you love so much, but we'll just pay you 25% more to come work for a big market company.

How do you defend against that?

That has been a huge topic of conversation amongst comp nerds like me recently. I'll tell you that this geographic difference since the pandemic has continued to swirl around us. Do you just go away with it? I mean, because the talent in the middle of a cornfield in Iowa could be just as good, just as talented as a software engineer in, you know, Silicon Valley, as an example.

Also, we've seen a lot of different things happen. Airbnb announced a few, oh, probably four months ago that they were having geographic pay differentials like most companies do or have. And they said, "You know what, we're doing away with those. You can work from anywhere, and we're going to bring everybody up to the highest level. In the US, which was, which was all formulas. And they brought everybody up to that level, at that rate, which is kind of crazy.

So, getting back, how do you defend it? Well, one thing I'll say is that we are not seeing mass movement in the market to adopt similar approaches and get away from geographic pay differentials. We still see most companies doing that, and we've stuck with that ourselves. And then, secondly, I think it comes back to helping employees understand why compensation is what it is, what the ranges are, and then. Once employees feel like they're paid at least fairly, it's a lot more about everything else around your experience at a company than just the dollars and cents.

And I think we're seeing that you know, not everyone is just looking for the best deal. I mean, that would be kind of crazy, although it felt like that a little bit. With the Great Recession over the last year, it's a tough question and something I think companies are working through right now. Do we move to know geographic differentials? Do we simplify it, or do we do what some other companies have done?

Google got a lot of headlines for doing that. Here's your calculator. Move where you want, but you'll see your associated pay reduction that comes with that or increase depending on where you move.

Yeah, I think it's an interesting topic. And for those thinking about leaving big cities, does it affect your comp in any way if you move from Dallas to a smaller market or from Chicago to somewhere that is perhaps a little bit more affordable? Do you end up losing compensation as a result?

There are some companies, there's a third view here, some companies say, "Look, if you're moving from a bigger market to a smaller one, we won't give you a reduction in the comp, but you're welcome to move. And take your family and take the lift in lifestyle but we're not going to reduce your comp. So, I believe three or four different approaches are being considered.

But this is a hot topic over the next couple of years because it's not going to slow down, and we've got to get this figured out so that people stay, and they're retained at organizations and there's not a brain drain from really good companies like HP and others.

Yep, absolutely.

So, we’ve covered most of it today.

And we've got to say yes to opportunities and organizations. I heard that loud and clear today. And we've got to enable managers to have the tools. These are the things that I heard you say. I was working at HP Today, but if I was working at HP Today, Trapper and I gave you a call and I said, "Look, I'm struggling. I, you know, I've got some things in my life, and I could use a little bit of a pay raise. What would be the first thing you'd say, Tom?

Go do it. Take this one step and then come back to What would be that one thing you'd ask me to do?

I would say to go talk to your manager first. So, it's especially, and we've talked about this quite a bit today, but especially, a company like HP, or any company that's probably got structures and a compensation function. I'm not doling out raises, you know, to people left and right. You know, I'm building structures, we're training, we're ensuring that we're market competitive, and we're sort of driving that approach.

One of the core pillars of our comp philosophy is manager empowerment. So we do want managers to be on that frontline. We want them, and we've acquired companies where managers go. You're expecting me to have conversations, right? You're not giving me the formula; you're giving this employee 4.2%.

No, we're going to give you this market for this employee this year and this is your budget within affordability, and its X percent. You can go up or down from there, but you'll have to explain to your employee why they got 5%, why they got a bonus that was 10% above or 10% below target, you know?

So that's one thing that I know companies do more formulaically, and I know we won't go into this today. But when, you know, we don't have performance ratings at HP, and there are a lot of companies that went away with those in the last decade, where one of them, it limits your ability to formulaically decide how valuable an employee is or how their performance has been, so we put that on the managers.

And we give them the tools to have the right conversations and to pay their people based on their performance. So yeah, if you came to me, I would say, look, talk to your manager, let's, you know, here are some resources you can research first. And if it was a friend not within HP or someone else that was talking to me, I would say there are resources. We live in the digital age. Check out Glassdoor, check out Blind. Look at some of what you're seeing out there. Take it with a grain of salt, because you're only seeing one piece of the puzzle. You might say this person has four years of experience and they're making 20% more than me. Well, what are the other factors? You know, the same degree type is at the same location as you know.

So, there's a lot that goes into it, but I'm all about information and I think people should. Make the most of the information available to them, both online and in person, before returning to their manager and having that conversation.

So, if you want to get a raise, my friends, do your research, have an open conversation with your manager, and then be patient in terms of making sure you're in the right spot. You've got the right career trajectory; you're in the right place on the right team. All of those things are critically important and equal, if not more important than just pure compensation.

At the end of the day, Trevor, thank you so much for being on the show today.

I am the global head of compensation for HP, which is just a terrific role, and I appreciate all of the good work that you do if somebody wants to. They will find you, track you down, and not ask you too many questions. How would they go about doing that?

Yeah, LinkedIn is a great place. Once again, I am a huge fan of LinkedIn in this digital age. I try to be responsive as much as possible, so that's probably the easiest way to get in touch.

Yeah, so you can find Trapper Yates on LinkedIn. We will put that in the show notes for you, so you don't have to look too far. You'll just be able to click on a link there and connect with Trapper as well.

So, Trapper, thank you very much. I am grateful for having you and your time and for the brain and thoughtfulness that you brought. So, to our conversation today and so very, very well received by the audience, I'm sure.

Thank you for being here.

I appreciate the invitation to be here and to spend some time with you today, Tom.

OK, my friend, and for all of you out there, thank you for joining the Talent Empowerment podcast. I hope this conversation lifted you so you can lift your teams, your organizations, and perhaps your income. Let's get back to people and culture together.

See you next time.

Tom Finn

Tom Finn

Podcaster & Co-Founder

Tom Finn (he/him) is an InsurTech strategist, host of the Talent Empowerment podcast, and co-founder and CEO of an inclusive people development platform.