How Does HR Decide How Much to Pay You?

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Bonnie Low Kramen and Jeremy Spake discuss compensation and the hard truths about how HR decides how much to pay you

Opening Notes from Bonnie

The title of this article has been a burning question for me for several years, long before COVID-19 hit. I finally found an expert, Jeremy Spake, who gave me the answers and a whole lot more. This article was started in November 2019 and meant to come out in February 2020. Well, you know what happened next.

We need to brace ourselves. The workplace is reeling and the unemployment rate of 14.7% in the United States is still moving in the wrong direction, at least for now.

In a workplace held in the grip of this virus, how companies react right now can set them apart as leaders focused not only on the health of their organizations, but also as examples of stewards for their employees through the turbulence in the next months.

Meeting Jeremy Spake

I want to tell you about the conversation I had with Jeremy in August 2019. Jeremy is a compensation expert and before we spoke, I knew that he had delivered two mega session presentations on this subject at the June 2019 Society for Human Resource Management (SHRM) Conference in Las Vegas.

This conversation, frankly, blew my mind. That talk was the most honest, clarifying, validating, and fact-filled discussion about money that I have had with anyone. What Jeremy shared with me substantially changed the content I teach about negotiating for salaries for assistants, for women, and for anyone who earns a paycheck, most anywhere in the world.

Jeremy bluntly states that compensation is in crisis and the HR professionals in coordination with leaders need to act and act now. He says that nothing should ever be the same again. I agree.

While Jeremy and I are talking about the United States, most of these ideas apply to other countries as well.

Spoiler Alert

Despite the pandemic, there is actually some great news to share about the future of compensation for Executive Assistants in the USA, so if money is a burning issue for you, this article will be worth reading to the end.

Where We Are Right Now

In our emails, I shared the following information with Jeremy:

In the pre-pandemic world, Executive Assistants in the USA were underpaid, some severely underpaid, to the point of not being able to support themselves. Despite the low salaries, these Assistants hold a tremendous amount of responsibility in their roles. There are many contributing factors as to why the disconnect exists.

  1. The role is populated by 95-98% women.
  2. They don’t ask.
  3. They don’t know what the role is worth in their market.
  4. They are not trained to negotiate.
  5. There are genuine fears about asking for more money.
  • Fear of losing their job
  • Fear of approaching HR
  • Fear of rejection and being told “no”
  • Fear of not being liked and viewed negatively
  • Fear of not being “worth” more money because of not holding a college degree

While some of these fears are irrational and do not have a basis in reality, the truth is that many of these fears are, in fact, possible outcomes and are most definitely rooted in fact.

The Hard Truth

The reality is that in 2020, there are EAs who are functioning as true executive business partners and viewed as part of the ELT – Executive Leadership Team. They are the right arms to their executives, the backbone of the company, the face of the company culture and as such, are a powerful, influential, and key constituency in the workplace. The main difference since March is that they are doing this work remotely from their homes.

Despite this reality, the hard truth is that EAs are not only underpaid, but they also report that their companies are using obsolete job titles, outdated job descriptions, and salaries that have not been adjusted, in some cases, in years. CEOs say to me, “Bonnie, if I don’t hear anyone complaining, I think there is no problem.”

Fast forward to July 2020, when a high-level Executive Assistant in California reported that her company was finally updating twenty-year-old job descriptions! What is going on and why is this happening?

I asked Jeremy this question:

How Does HR Decide How Much to Pay Executive Assistants?

Jeremy:

First of all, I see what you see, which is that there are pronounced pay equity issues across all industries, jobs and geographies. The good news is that there is an increasing push by corporate HR departments to no longer be simply reactionary regarding these issues, but to proactively address – and correct – them. So, there is an increasing focus, especially right now, around compensation practices and ensuring they are equitable.

Here’s the hard truth. Part of the answer is complicated, and another part is quite simple. For many small to mid-sized companies, HR and compensation departments are working with obsolete job descriptions and old market data.

Therefore, we have found that all too often, salary bands are set using vast compilations of market data from jobs that are sometimes functionally incongruent.

And many times, compensation is being set arbitrarily – based more on the minimum compensation that people will accept for a role than on hard data.

Bonnie:

“Arbitrarily.” You are validating what I am hearing all over the world. So, what I am hearing you say is that the decisions about what to pay people are essentially educated guesses?

Jeremy:

In many cases, that is true. In larger companies that have bigger budgets, leaders buy surveys for “job families” of particular jobs or functions – “Executive Assistants,” for example.

The main vendors that provide these surveys are:

  • AON
  • Culpepper
  • Deloitte
  • ERI (Economic Research Institute)
  • Mercer
  • Pearl Meyer
  • Radford
  • Western Management Group
  • Willis Towers Watson

The cost of these surveys ranges widely – often between $5,000-$15,000. Therefore, these surveys are often cost prohibitive for smaller companies and explains why many will only refresh their market data every few years. HR professionals consider this type of survey information as the most reliable data available, even if it is several years old because we can typically age the data from one year to the next based on average salary increases from that year.

In fact, I have worked in the past for multiple compensation survey firms, so I am very familiar with the data collection and reporting processes from both the participant and vendor side.

When it comes to the C-suite Executive Assistants and the women and men who work for CEOs, this job family may not appear in most surveys. And when it does, it is up to HR whether the information is accessed. Many participating companies either don’t know it is there to pull data from or to match their internal roles to or are lumping all their salary data into one larger “Admin Professional” bucket.

Bonnie:

So, this would explain why C-suite Assistants do not currently have a data source that reflects the high organizational level at which they work and the commensurate salaries that they receive.

Jeremy:

Generally speaking, that would be correct. Another contributing factor to insufficient salaries is that the role has a perception problem. All too often, women particularly have been socialized to not highlight their talents or speak openly about their achievements.

The simple truth is that HR professionals do not fully understand the EA role. Thus, there is an inconsistent perception about what EAs do and at what level they function. Many people in leadership and HR still think of assistants in the old paradigm of answering phones, filing, and typing. The reality is much different – but not enough people know this reality. EAs need better PR!

Bonnie:

How do we fix this? Where does the U.S. Department of Labor (DOL) fit in all this with their job codes and salary ranges for C-Suite EAs?

Jeremy:

The DOL is not a viable or useful resource for current salary data because the job categories are too wide – meaning you can’t really pull out an EA salary data point from the larger set of data – because they’re lumping everything regardless of scope into one set of job data. Because of this lack of specificity, HR directors typically do not rely on information from the DOL as a primary compensation data source. In fact, most organizations I work with do not use this data at all to guide their salary structure development. HR prefers to rely on these market data surveys and what candidates will accept for a role to identify a salary threshold for both a job and a level.

The real long-term fix that I see is to collaborate with the survey companies to add current job family descriptions and salary ranges for the C-suite EAs. If these job families exist in these surveys already, we should partner with these survey firms to better advertise their existence and push companies that subscribe to these surveys to report data for these roles. That is how we build a true market data snapshot of salaries for commensurate roles.

The bottom line is that high level EAs are not being offered the money they deserve because historically there has been so little hard data available about the role, which is a relatively small subset of the larger “administrative professional” job family category.

Pay Equity and Pay Transparency

Jeremy:

Here is some good news about what is happening right now. There has recently been a flurry of state and local legislation that makes it illegal to ask new job candidates their salary history. Currently, 17 states and 20 local city governments across the USA have enacted this legislation. What does this mean for HR? It means that if we can’t base new hire salary rates off a candidate’s previous pay elsewhere, how will we know what a role is worth? Enter market data.

Companies will increasingly need to rely on market data from compensation survey vendors to not only validate their current salary rates, but to drive new salary structure development.

So, it is more important now than ever before for EAs to ensure their job descriptions adequately reflect the level and scope of the EA role, so that the right market data is used to drive salaries for these roles. Having the job description fully reflect the realistic scope of the EA role will help when requesting a salary review of these roles and the function.

3 Factors Driving Pay Equity and Pay Transparency

Jeremy:

There are three factors contributing to new trends around Pay Equity and Pay Transparency. These issues are now front of mind for leaders and HR professionals and cannot be overstated.

Bonnie:

Really? To use positive and hopeful words like “Equity” and “Transparency” is music to my ears. These words are opposites and so different compared to the negative words that have been commonly applied to compensation issues for decades: words like ‘off-limits’, ‘taboo’, ‘secret’, and ‘forbidden’. Assistants have historically felt isolated in the process of asking for salary increases and not encouraged to discuss it. What’s happened? What’s changed?

Jeremy:

In a pandemic-impacted economy and job market, the following three factors are driving compensation practices.

1. The rebounding job market which is highly competitive for skilled talent in certain sectors like technology and health care.

It is safe to say that HR departments around the world have been thrown into volatile chaos by the pandemic. Part of the effort to stabilize companies means retaining high-performing talent. HR professionals are having to review salaries more frequently, adjust job titles and job descriptions. What this means is that companies are voluntarily conducting pay evaluations and staff are receiving increases without even asking for them.

2. Easy and free access to crowdsourced salary data websites like Glassdoor, Blind, Paysa, Payscale, and LinkedIn.

Assistants are talented in doing research and are easily finding, documenting, and presenting real-time current compensation data in their geographic market. With more and more millennials in the workforce, they have never known a world without apps to crowdsource information and therefore, it is simply a new “normal.” It should be noted that since crowdsourced site data is self-reported and not verified, the data is not considered “clean data.” As a result, HR professionals take this data with a grain of salt and do not use it as their primary or sole resource, but they still do review it seriously, mainly because the staff is taking it seriously.

3. The movements #MeToo #TimesUp #BlackLivesMatter

In 2017, the #MeToo and #TimesUp movements began in response to systemic, pervasive reports of sexual harassment and bullying in the workplace. One other result of these movements has been to shine a light on all issues related to workplace advocacy – including compensation. Leaders have become highly sensitive to the frontpage news outlining the large wage gap between women and men and are working to make it right. CEO Marc Benioff of Salesforce is just one of many examples of company leaders investing millions of dollars to close the gap, not only to retain their people and because it is the right thing to do, but also because these actions attract the best new talent. Smart, eh?

In 2020, the #BlackLivesMatter movement is shining an important light on systemic racism and discrimination that exists in the world and the workplace. As we see an increase in the hiring of Diversity & Inclusion Directors at companies, we believe this will have a positive impact on compensation and hiring practices going forward.

Bonnie:

What do we recommend Assistants do with this information?

1. Create your resume/CV and written job description that is finely detailed and specific. These documents are critical to justifying higher compensation.

2. Do your research on what your role is worth in your market. Visit with a local recruiter to get as close as you can to the right number based on your responsibilities, experience, skills, and education.

3. Gather and organize all your data in writing and format it in a way that can be easily reviewed.

4. Set up a meeting with HR to present the data and respectfully ask for a “salary evaluation” to see how you are measuring up in the marketplace.

The ramifications of these developments cannot be underemphasized. The time for open conversations about compensation is right now.

For more information, you can view another article from Bonnie here, and from Jeremy here.

Jeremy Spake has spent his career as a compensation subject matter expert in market intelligence, compensation plan design, implementation and consulting.  He has experience as both a business leader and consultant in compensation, performance management, succession management, mergers & acquisitions, workforce analytics, and strategic planning. He has worked extensively in the technology industry and has provided consulting services to a variety of clients from aerospace and manufacturing, to healthcare and non-profits. Jeremy presents regularly to the Society of Human Resources Professionals, the WorldatWork Society and the Human Capital Institute and is a regular contributor to Workspan and ReWork magazines. www.cornerstoneondemand.com

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About Author

Bonnie Low-Kramen

Bonnie Low-Kramen is the Founder of Ultimate Assistant Training and is one of the most respected thought leaders on workplace issues. In May, 2019, her work was profiled in a Forbes cover story. For 25 years, Bonnie worked as the Personal Assistant to Oscar winner Olympia Dukakis and now travels the world speaking, teaching and consulting. Bonnie is known for her passionate commitment to the movement to transform the workplace in part by closing the wage gap between women and men and ending workplace bullying. The Be the Ultimate Assistant workshop that she teaches with technology expert Vickie Sokol Evans was named one of the Top 7 Conferences to Attend in 2019. Bonnie is also part of our Speaker Bureau. If you are interested in Bonnie training your assistants or speaking at your event, either virtually or in person, please email [email protected]

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