Wade Galde
Director Global Total Rewards
The Knot Worldwide
Episode 395
Beyond Loyalty: How Transparency & Purpose Reshape the Modern Employer Contract
Current chapter: Covering monthly expenses is the number one concern for employees in 2024
Built By PeopleOctober 29, 2024 · 23:17
Thesis
“The modern employer-employee contract has dissolved, necessitating a shift towards transparency, trust, and employee-centric total rewards strategies to attract and retain the 'right talent' that aligns with company culture and mission.”
Show notes
Navigating the World of Total Rewards with Wade In this episode, Wade shares his journey into the field of total rewards, a crucial sub-function of HR that deals with employee compensation and benefits. Wade discusses the importance of ensuring employees feel competitively paid, addressing the significant impact compensation perception has on employee retention. He covers key trends shaping the total rewards landscape, including pay transparency and the evolving expectations of younger employees. Wade also delves into his approach to fostering a strong company culture, managing global benefits, and the importance of flexibility and trust in compensation management. Through various personal experiences and insights, Wade underscores the importance of being transparent, flexible, and employee-focused in the ever-evolving field of HR. 00:00 Introduction and Career Beginnings 00:14 The Importance of Compensation and Benefits 01:54 Corporate Compensation Journey 03:06 Global Compensation Strategies 05:08 Trends in Total Rewards 06:33 Employee-Centric HR Practices 13:51 Challenges and Controversies in HR 17:14 Managerial Responsibilities and Training 20:50 Final Advice and Insights
What you'll take away
- 1Proactively embracing pay transparency is crucial, driven by regulatory trends and younger generations' expectations for openness.
- 2The traditional employer-employee loyalty contract no longer exists; employees now prioritize companies that value their well-being, purpose, and cultural fit over solely high compensation.
- 3Prioritize hiring the 'right talent'—individuals who align with company culture and mission—rather than just the 'best' (often most expensive) talent, for better long-term engagement and success.
- 4Investing in competitive compensation and comprehensive employee well-being, while seemingly costly upfront, reduces expensive turnover and fosters higher engagement, leading to better overall business outcomes.
- 5Equipping managers with training and confidence to have honest, transparent conversations about compensation is vital for building employee trust and managing expectations effectively.
- 6Adopting remote-first work models is essential for aligning with modern employee expectations and securing diverse talent, as forcing office returns is a missed opportunity.
What most organizations get wrong
- •Advocating for competitive pay despite higher immediate costs, arguing it's ultimately more cost-effective than high turnover from underpaying employees.
- •Emphasizing the importance of hiring the 'right talent' (cultural fit, mission alignment) over just the 'best talent' (highest pedigree, highest cost).
- •Promoting radical transparency in compensation and encouraging honest conversations with employees, counter to the common managerial fear of backlash.
- •Strong belief in remote-first work as the future, pushing back against organizations forcing employees back into physical offices.
In Wade's words
“if you get it right, you know, you kind of, you take that off the table from an employee perspective. But if you get it wrong, it's like paramount. It's the one thing people focus attention on.”
Highlights the critical importance of getting compensation right to remove it as a primary reason for employee dissatisfaction and departure.
“my general feeling is, you know, it's better to do it because you want to and not because you have to.”
Emphasizes proactive adoption of pay transparency rather than forced compliance, suggesting a more authentic and beneficial approach.
“it really comes down to, do they value the employee? Is this a place where the employee can be taken care of and can be effective and really enhance their broader goals even outside of the 9 to 5, right?”
Defines the new employee value proposition, moving beyond transactional pay to holistic well-being, purpose, and support for individual goals.
“it's really about getting the right talent. So not necessarily, you know, the top of their class, but someone that is a good fit for your culture and really aligns with your mission and where you are trying to go and what you're trying to do.”
Challenges the conventional wisdom of chasing top-tier talent, emphasizing cultural fit and mission alignment as superior for long-term success.
“I think that constant kind of lowballing approach to compensation and benefits, I think, is completely the wrong approach... you may think, you know, by paying people more money, it's costing you. But in actuality, if you want to pay them less, it's going to cost you more in the long run because those people are not going to stick around.”
A strong contrarian take on the long-term cost-effectiveness of competitive compensation versus short-term savings, highlighting the hidden costs of turnover.
“if you're a manager, part of your job is owning your employees' compensation.”
Proposes a controversial but effective stance that managers should be directly responsible for their team's compensation and equipped to discuss it.
The problems this episode addresses
- •High employee turnover due to non-competitive pay significantly increases business costs, impacts focus, and reduces revenue generation.
- •Lack of manager maturity and training in conducting honest compensation conversations leads to fear, secrecy, and mistrust among employees.
- •Siloed global benefits strategies, often a result of M&A, hinder a unified employee experience and create administrative burdens.
- •Employee disengagement stems from the dissolution of traditional loyalty contracts, as younger generations seek purpose and holistic well-being support beyond just salary.
- •Ineffective or disingenuous hiring processes lead to poor cultural fits and higher churn rates when initial expectations are not met.
- •HR leaders face challenges convincing finance to invest in competitive total rewards, balancing cost reduction with long-term talent attraction and retention.
In this episode
Covering monthly expenses is the number one concern for employees in 2024
Built by People
Comp and ben focuses on both compensation and benefits for employees
What Does Compensation and Benefits Mean for Employees?
How many countries are you operating? We're in 12 countries
Have we got a global benefits strategy for our employees?
Pay transparency and being more open and vulnerable with employees are trending trends
Top Executives on Total Rewards
What's something controversial but effective that you find yourself doing in HR
What's Controversial but Effective in the Field of HR?
Many organizations don't have maturity to have honest conversations with employees about compensation
What's the biggest challenge facing managers in the workplace?
Topics covered
Organizations and entities mentioned
Full transcript
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