S5 E15 | CXR Podcast: Charlie Franklin, CEO Compa, and Pay Transparency

Charlie Franklin, CEO and founder of Compa, joins the show to talk about why pay transparency is good for everyone in the hiring process.

S5 E15 | CXR Podcast: Charlie Franklin, CEO Compa, and Pay Transparency

Charlie Franklin, CEO and founder of Compa, joins the show to talk about why pay transparency is good for everyone in the hiring process.

Chris Hoyt, CXR 
Before the pandemic and before the baby?

Charlie Franklin, Compa 0:03
Mostly not, I did work. I commuted to the Bay Area for a couple years before the pandemic, so I had some practice. But having the baby at home while working was definitely a new adventure and starting a company, you just started doing it all at the same time.

Chris Hoyt, CXR 0:19
Well, there’s no shortage of that. Well, I have to say, so do you think that learning to the baby becoming an important element of turning off the news? Is that where the baby learned to say no?

Charlie Franklin, Compa 0:34
It’s definitely her number one word right now. We’re just hoping we can teach her yes soon.

Chris Hoyt, CXR 0:40
Oh, my gosh, I have to you wonder where they pick it up, Charlie. But you know, when my kids were little, I will never forget, I was sitting. I was doing some sort of handyman repair work in the house. And so my oldest at the time is sitting right next to the toolbox and, you know, handing me things and saying what is this and I will never ever forget. And she was like, Daddy, what’s the and I’m trying to get something done. So you’ll probably identify with this right? Daddy, what’s this? That’s a screwdriver.Daddy? What’s this? That’s that’s a wrench. Daddy, what the hell is this? Where the hell did you Oh. They soak everything up so fast.

Charlie Franklin, Compa 1:14
They do. Yeah, she she’s giving us this sort of scowl right now. Every time we asked her to do something she doesn’t want to do. And I’m looking at her. I’m thinking does she look more like me or like my wife right now? Because one of us has given this to her.

Chris Hoyt, CXR 1:31
Awesome. Well, let’s get this thing started, shall we?

Charlie Franklin, Compa 1:33
Sure. Yeah.

Announcer 1:36
Welcome to the CXR channel, our premier podcast for talent acquisition and Talent Management. listen in as the CXR community discusses a wide range of topics focused on attracting, engaging and retaining the best talent. We’re glad you’re here.

Chris Hoyt, CXR 2:06
All right, welcome to the show everybody. I’m Chris Hoyt, President of CareerXroads. Thanks for joining the live stream, wherever you are. We do we do this weekly on LinkedIn, Twitter, Facebook, and we drop the show just about anywhere you listen to podcasts. So if you’re on Spotify, or Amazon or Apple or any of those, go ahead and hit subscribe to get your sort of weekly dose of industry conversation delivered in what we like to call, we were just laughing about this snackable 20 minute segments, right? If you’re with us live, of course, you can join in the chat found within the streaming video, say hello in there. Go ahead and drop a link in there for us and others to find you. Why shouldn’t this sort of be a networking opportunity as well, right, so drop in your LinkedIn URL, or your Twitter URL, or your Facebook URL, whatever URL you got, and we’ll be sure to hit you back and say hello and connect with you. Hopefully, you make a new connection or tow it or connection from the show whether it’s with us or somebody else. So for those who may not know, the podcast, of course, is a labor of love. We don’t accept any sponsors, we certainly don’t invite any paying guests on the show. We don’t pay for guests, there are no ads that make this possible. This is just us sort of having fun talking to you about recruiting stuff that we think sort of deserves some attention. We are excited to talk weekly about topics that are keeping us up at night, meeting people in our space that are doing the good work and fighting the good fight. And this week, of course, is no different. So we’re going to get back into the topic of transparency and of course compensation. If you didn’t catch last week’s go back and listen to it. And then you can come back and listen to this one. But to do that with us today, we’ve got the founder and CEO of Compa. And that is Charlie Franklin. Charlie, welcome to the show.

Charlie Franklin, Compa 3:48
Thank you, Chris. Great to be here.

Chris Hoyt, CXR 3:50
So look, Charlie, for those who don’t know you, and maybe you weren’t listening earlier, we had a little chatter going on? Why don’t you go ahead and give us the escalator pitch of who Charlie is right? Give us the skinny?

Charlie Franklin, Compa 4:01
Absolutely. Well, my name is Charlie Franklin. I’m co founder and CEO of Compa. I am an HR practitioner, turned entrepreneur, I spent the first decade of my career in HR mostly in compensation. I most recently left workday to found Compa because I was frustrated with how hard it is to make offers that are fair and competitive, especially at the enterprise scale. I spent most of my time at larger companies, and especially as we move into the era of pay transparency, so we found a Compa to help recruiters do exactly that.

Chris Hoyt, CXR 4:34
So Charlie, when you say pay transparency, what what does that mean to you? What should that mean? To me? If I’m a recruiter, what should that mean to me as well?

Charlie Franklin, Compa 4:44
Yeah, you know, pay Transparency can mean different things to different people. I think for some, they picture employees circulating spreadsheets and sharing their pay and others think about the lawsuits and just I think fallout from more data Coming available. In our experience, the best organizations see pay transparency as this opportunity to get smarter to close candidates faster, and just improve the overall experience. And I believe that this era pay transparency is here and inevitable. And the best organizations, again, they’re really thinking with their front foot forward on, how can they meet candidates where they are the amount of data that they expect, so you can put the values that you want behind your offers.

Chris Hoyt, CXR 5:29
Well look so Charlie, your Stanford guy. Washington, you right, former head of people who said it worked a former Silicon Valley resident, I think now you’re in you’re in Southern California now. What what makes you decide to sort of tackle this subject? Why be a founder or a CEO trying to tackle compensation from an equity standpoint?

Charlie Franklin, Compa 5:50
Yeah, well, I, I have spent a number of years in the tech industry working in HR. And I got to really understand on an intimate level, just how compensation decisions are made at large enterprises. And the first thing I’ll say, I think, for most folks who look at whether it’s CEO pay, or just how their pay increase comes through each year, the compensation practitioners out there are working really, really hard to help make good decisions. What makes it challenging is the scale. If you have an enterprise with 1000s of employees of employees, you’re making 1000s of pay decisions every single year. And especially with something like offers where you are interacting with the market, and the market is changing very quickly, how your organization keeps up to date with what the market is doing, and making sure that people are paid fairly pay competitively paid based on their performance, this is really, really hard to do. My experience, again over that decade, really taught me that there’s an opportunity for companies to bring more data and more software and more tools to the point of decision. So not just for kind of a small internal team, like the compensation team that is designing the programs and policies for the entire company, but actually the folks on the edges who are out making decisions every day. And so I like to think about recruiters as on the front lines, talking with candidates and interacting with the market. When I was a compensation practitioner, all the time, I would have recruiters come back to me and say, Oh, my gosh, we have to pay this candidate more. Our guidelines are totally out of whack with the market. And I would say, show me the data. And it was really hard for them to put that together at best was anecdotes. And so as a compensation practitioner, I always wanted this better view of what recruiters are seeing day to day. And I acknowledge that my information, oftentimes is not as good as what you the recruiter see. And I use an analogy, imagine that. I’ve asked the recruiter go out to the supermarket and get an orange, it costs $1. The recruiter goes a supermarket and comes back and says, Well, we’re just cost $1.20. And I say now they cost $1 Do your job. And they kind of go like this, go out and get something cost $1. And that’s where your talent strategy falls apart. And so these teams just need a better way to work together. And that’s what got me really excited about founding Compas, building this connective tissue with software between talent acquisition and total rewards teams so that you can just respond more quickly to what’s happened in the market and create more competitive offers that are fair at scale.

Chris Hoyt, CXR 8:24
So it says a lot going on in the world like of pay transparency, right, where we’re talking about salaries, and let’s just do it from the front end. Right. And maybe we’ve maybe if we’ve got time we circle back and we talk about, you know, internally.

Charlie Franklin, Compa 8:36

Chris Hoyt, CXR 8:37
But but from a recruiter standpoint and trying to make sure that they’re making these fair offers, there’s just a lot happening with regards to when does the conversation happen? Right with the candidate, how and how does the conversation happen? And then where’s the recruiter to your point where they figured out that oranges are a buck 20, right, or a buck 50 Or a buck whatever versus a buck? I remember in another life when I was a recruiter, I mean, we had government data that was years old, that we would go pull from or to your point anecdotal data that we would get with talking to the candidates who can of course be trusted to tell us at that point, you know, what they’re actually making, right, or what they should be making. But are you seeing anything in the space that sort of, from a resource standpoint, right, that that makes those conversations whether from the dialogue standpoint or the resource standpoint, a little bit easier? capa aside? Of course,

Charlie Franklin, Compa 9:31
Of course, you a lot has changed that’s forcing recruiters to change their jobs. We talked about recruiters as on the front lines of this pay transparency era because the entire organization is counting on them to bring in candidates and meet them where they are with the data. Oftentimes, candidates are showing up with oftentimes competing offers or with their own data. And so these combined trends of super hot talent market, which everybody knows about, we’ve all talked about a lot. The evolving social contract between employees and employers, and just the proliferation of data has really put recruiters in this position where they need to know their numbers. So, you know, how do your compensation programs work? How do those compare to your candidates expectations, that’s more important than ever. And by the way, you still need to move just as fast if not faster. And so we see the best organizations as exploiting their recruiter knowledge about what’s happening the market by capturing what are the competing offers, that we see where the candidates pay expectations. And if you can transform that into this sort of real time view of what the market is doing on a day to day basis, you can show up as a recruiter, as more of a strategic consultant to your hiring manager who wants to fill the role quickly. And then, ultimately, you’re kind of like a trusted financial adviser to a candidate. I mean, I think about candidates are making this decision, if they’re going to sign up for a company for three, four or five years. That’s a big personal finance decision and peak years of their career, you’ve got to make sure that you have your numbers right, that it’s a good deal for them, and that it’s a win for your company.

Chris Hoyt, CXR 11:13
You know, try not to interrupt you. That’s an interesting perspective I had. So we have had countless conversations with our members around giving recruiters the tools to talk to the hiring managers with right, or to talk to compensation with right because data lends itself to credibility immediately. Right. But I hadn’t thought of the I hadn’t thought of the aspect of having the recruiter have the data available to talk, maybe talk down or talk up the candidate? Are you? Are you seeing comp tools used so that recruiters can either say, you know, this is where we think you need to be raising that up or level setting, maybe with some of these kind of, you know, a lot of tech talent making a lot of money they never thought they would have made five years ago. Are you seeing the tool being used with the candidate more or tools being used with candidates more?

Charlie Franklin, Compa 12:01
Yeah, what we see is recruiters are confronted with a lot of what I call armchair analytics. And this is folks showing up it’s not that there’s a lack of data is that everyone’s showing up with their own data. And it’s hard to know what to trust and how to compare everything. And so recruiters who are really showing up to these sort of pay transparency, frontlines and prepared weigh, have this Apples to Apples data that allows them to understand what is the candidate expect? How do my compensation programs work? And how does my offer compare, and then they can communicate compensation in really a skillful way, so that they’re helping the candidate show you not just how much money you’ll make in year one, but in years, 234 why that’s a better deal than what you have today. And how you know, that you can pay fairly in future. So a big part of this is preparing recruiters for communicating and understanding pay effectively. And ultimately, building trust with the candidate. I want the world of making offers to move away from a used car salesperson tactic. Nobody wants to do that, where you kind of show up and you know, elbow, the price off the windshield of the car and number in the back pockets. Like why are we deputizing folks to do that when really what they’re trying to you know, Canada’s show up with what they’d already it’s like when you’re shopping in a car, you know how much it costs. So instead, I want to recruiters to feel empowered to understand these programs and why it’s a better deal for the candidate, versus putting everybody in position negotiation and confrontation.

Chris Hoyt, CXR 13:39
It’s interesting. I like your perspective, I think, and I’m gonna steal your job, you basically had two startups during the pandemic, right? Beautiful baby. And you have this other baby that right that you’re working on this business. Let me ask you, though, I mean, you’ve been doing this a while you’ve been in this space a while what’s really changed in the last couple of years, and you can blame the pandemic or not, but what’s really changed in the world of compensation and that level of transparency that you’ve seen.

Charlie Franklin, Compa 14:08
What I see the biggest change is compensation practitioners have a set of assumptions and heuristics about how market pay practices work, and those are turned on their heads. So for example, the cost of living the cost of labor, roughly speaking, have tracked each other for a long time, certainly us so if you live in San Francisco, you’re gonna have a higher cost of living but you’re gonna have a higher wage, right? And so those things kind of offset. That’s changing as knowledge workers in particular move around the country more. And it’s in we’ve all had this conversation about the great resignation and just the pandemic prompting those changes. For many organizations, what they’re trying to understand is what is our pay philosophy and strategy in a world where we have a hybrid or remote workforce, and companies that have searched internally for an answer or in sort of an insulated way from the market, I think you’re going to be on their backfoot. What it comes down to it’s supply and demand. If you have amazing talent in Kansas City, or Omaha or Tallahassee that are as good is a talent you have in the Bay Area, they’re going to command a wage from the market from any companies willing to hire folks remotely. And so many, many companies are rethinking their compensation guidelines to map to where people have moved. And, unfortunately, the short term as people adjust to this, that the people who get the brunt of that lag behind the market are actually recruiters who have a pay guideline is super out of date. And they know what candidates are expecting in the market, regardless of whether they’re in New York, or Omaha.

Chris Hoyt, CXR 15:52
So look, Charlie, I love that. So tell me, if you just, if what you just said blew my mind as a recruiter, right? So take me out with what I should be doing. What should my next, if that just rocked my world? What should my next step be?

Charlie Franklin, Compa 16:08
From a recruiter, what I would focus on today is understanding how to communicate my compensation programs to a hiring manager and the candidate so that we can move faster, because everybody is trying to close these wrecks really quickly. And there’s nothing more frustrating than losing a candidate at the offer stage. So make sure that you have the tools in your toolkit to communicate pay in a way that your candidate can trust that you’re making a good offer. And the hiring manager knows based on the data, that you’re going to win your candidate. That’s why I focus on educate and upskill yourself become fluent in the language of compensation of your organization, so you can move quickly.

Chris Hoyt, CXR 16:49
I love it. Charlie, thank you so much. We really appreciate your time. We know you’re busy man. So we think thank you so much for jumping on the show and saying hello

Charlie Franklin, Compa 16:56
to everybody. Thanks, Chris. Great to be on. Thanks, everyone.

Chris Hoyt, CXR 16:59
Good stuff. Look, I just want to tell everybody upcoming. As a reminder, later today, for our members, we’re hosting a solution spotlight that’s with college recruiter. We’ve got Steven Rothberg, who is the CEO, he’s going to be sharing what’s going on in college recruiter and why leaders should be paying attention. And as a reminder, nobody pays to be part of the spotlights, right? If you’re doing good work, we’re sort of interested in seeing that and shining a spotlight on that. And that just that just resonates with me because Steven, as we mentioned, I think one of our other shows Stephens doing really great work also outside of our space, specifically, right, work towards helping and bringing aid and relief to Ukrainians who are suffering from the Russian invasion, the war there. So you can find some details on that. By reaching out directly to Steven on LinkedIn. Let me see if I’ve got his There we go. We’ll throw that up for anybody that wants to check that out, reach out directly to Steven on LinkedIn, he can get you in touch with the folks that are sort of helping him that he has partnered with so we’d certainly encourage you guys to do that and take take advantage of that. Steven, thanks for that effort. Also, this week, we have our talent sourcing meeting, we’re going to talk about sourcing for diversity and career paths for sourcing professionals ServiceNow, sourcing leader and longtime friend Amybeth Quinn. She is going to talk about where do sourcers go for their next job, what is what does a career ladder a career progression sort of look like for a sourcing professional. And that’s I’m saying that I’m kind of thinking maybe we should get her on the show, and do a live q&a That might be kind of fun. So maybe we’ll set that up. Lastly, join us next week on the show Angie Verros, another co founder and industry friend, we’re going to talk about the topic of sourcing at scale, so you’re not going to want to miss that. And until then remember, if you keep giving us about 15 minutes, we’ll keep giving you some pretty thought provoking breaks in your day. Until then check out the resources and the new community platform over at CXR.works and more podcast episodes than you can shake a stick at over at CXR.works/Podcast. I’m getting it all out of there. We’ll be fine. Thank you everybody. Have a great week.

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