Should You Revamp Your Compensation and Benefits Package?
Faced with retention problems, Will Scott, CEO of Search Influence, shares how the tech company revamped their compensation and benefits package.
In the years since we started Search Influence, the New Orleans tech scene has exploded. In that same time, Generation Y, also known as “millennials,” became the majority of the workforce. We’re lucky to have several millennials among our ranks at my company.
At the time of our founding in 2006, digital marketing was a new field and we were unique in the New Orleans area as its practitioners. In the beginning, we were a completely remote U.S. company with mostly New Orleans area-based account service. Our production team was in India. Thus, from 2006 to 2010 “working from home” was synonymous with “working” for us.
Today’s reality calls for a different approach to compensation and benefits; an approach which is family-friendly and millennial approved and which works for business, too.
In 2010 we made a decision to redevelop our production team in the U.S. From then until this summer, when we radically overhauled our compensation philosophy — stay with me — we addressed pay and benefits incrementally, in fits and starts and, usually in crisis. We felt the effects of this with an employee retention rate that made us feel less than proud.
In talking with other business owners, it seems our approach was pretty common.
In the last couple of years a few things have changed which have brought us to a new way of thinking. I think we’d all agree that if a person, or a business, failed to learn over the span of 11 years that would be pretty unacceptable.
The biggest among the changes is that we as a leadership team have started reading books together. From that practice, we’ve gotten exposure to some great concepts which we’re trying to put into practice.
Like many companies, we have always collected anecdotal feedback like suggestions and exit interviews. What we didn’t have was a clear framework for how to integrate that into our business decisionmaking.
So, as a group, we read a few books which got us going on a process to better analyze and integrate the feedback we get from employees, customers and other stakeholders.
First among our reading was “The Great Game of Business” by Jack Stack, which outlines some thinking about creating a meeting cadence and content in order to help with management. We also read “The Alliance: Managing Talent in the Networked Age” by Reid Hoffman, cofounder and chairman of Linkedin, which gave us some new ways to think about the employee employer relationship and what our expectations should be at different levels of tenure and within the organization.
And finally, we read “Scaling Up: How a Few Companies Make It…and Why the Rest Don’t” by Verne Harnish, which brings together all of the above into a real framework for organizational management with a focus on quarterly planning in the areas of strategy, execution, cash and people.
I was introduced to “The Great Game of Business” by Erik Frank, CEO of Your Nutrition Delivered, and to “The Alliance” by Scott Wolfe, CEO of zLien — both members of the New Orleans startup community and members of EO (Entrepreneurs’ Organization) Louisiana.
With an abundance of input, some “data,” some learning and some anecdotal feedback, we got to work with a goal of collecting intel on competitive compensation.
We commissioned an outside HR consultant to do some polling of companies we thought of as “talent competitors,” i.e. companies who would hire our team members after we’d given them a year’s experience, or just prior to their next step on our ladder.
As you can imagine, it’s frustrating to put so much time, energy and training into an employee and have them walk out the door over, what seemed to us, a few dollars. Then to hear in exit interviews about “better” benefits — typically without much detail — added fuel to our fire to make sure we had good data.
We started this process without a critical team member, though. Alison Zeringue, our director of account management, was on maternity leave and on her return reviewed the plan from a fresh perspective. She helped us understand that simply collecting data about pay wasn’t going to be enough. Alison helped the rest of us realize this was our shot. We had to come full-force or risk losing the faith of the team.
Sadly, our HR consultant was not as successful as we’d have liked. In some cases this was due to a reticence on the part of local companies to share information with “competitors.” In others it was busy-ness; our needed contacts weren’t able to provide the information in a timely enough fashion.
Thankfully we did manage to collect good data from a representative few. That, plus a Herculean effort from our COO, Angie Scott, our HR manager, Myndi Savoy, and many more of our managers, enabled us to put together a matrix that included new minimum and maximum salaries for each position based on online resources from salary.com and payscale.com. For some positions the result was an annual raise, for others, affirmation that their salary was already competitive.
Our original quarterly goal was to get a firm grasp on competitive pay. Check! More than check!
We knew that updating annual compensation wasn’t the complete answer, because to our employees it’s all about the total package of benefits and pay. So we knew a benefits and “perks” overhaul was also necessary. Sounds easy, right? You have no idea..
Looking at benefits, getting through everyone’s must-haves was a bloodbath. Thankfully, our leadership team have thick skins and are not afraid to advocate for what they believe.
Nothing was off the table. We adjusted PTO (paid time off), working hours, work-from-home rules, parking reimbursements, you name it!
We had done it! We rolled out the full package and the team was elated. We addressed a number of long-standing concerns, like “sick pay” — which we addressed by universally adding paid time off days. We addressed smaller issues like making Lundi Gras a holiday. With clients all across the U.S. and many in Canada, we had always felt like we needed to be present for at least part of the Mardi Gras holiday.
And the one no one expected, we rolled out a universal “transportation” stipend. We didn’t feel it was fair to only give a “parking” benefit to those who drove. So whether it’s an RTA Jazzy Pass or two bicycle tubes and a poor boy, we wanted everyone to be treated fairly.
We are now five months in and the response has been great.
Our top concern was feeling like we were losing valuable team members over pay and benefits. While I’d love to say we’ve had no voluntary exits in the time since, that’s just not so. That said, each of the folks who’ve chosen to move on have been very complimentary of the work we did and indicated that their choice to leave was to pursue career aspirations outside of the scope of Search Influence’s current business, not more money.
By rolling out such a comprehensive compensation package at once we were able to set employee expectations that with competitive and generous benefits comes responsibility. For the sake of our clients, we need to be able to expect excellence from our team. Our team has delivered. We’re more agile and committed than ever before, pumping out great work with short turnarounds and launching campaigns faster than ever.
It’s easy to complain about or stereotype a generation, but as we know, there is no universal definition of either the generations or their members.
As business leaders, it’s our responsibility to assure we’re meeting the needs of customers and employees. It’s a balancing act between profitability and supporting your team.
I am confident the investment in our team, and our investment of time in crafting a great benefits package, will return us even greater profits over time.