You don’t have to be on a compensation island all by yourself

Ruth Thomas (00:02.014)

Hello, and welcome to another episode of Comp and Coffee. It's definitely summer where I'm recording the podcast today. I'm in London, and we're in the middle of a heat wave, so it's very warm and sweaty here. I'm definitely thinking about disappearing to an island right now. I can't think of anything better.

But, of course, I'm here to record another episode of Comp and Coffee. So, I'm going to get as close to that island feeling as I can, and we're going to keep with the theme. Today, we're talking about how working in compensation can sometimes feel like being on an island and why that's a problem, especially now that compensation has never been more visible or more closely tied to business outcomes.

We're going to explore why compensation expertise has become one of the most valuable resources organizations can invest in to help them get off that island. We'll also discuss how strategic partnerships can help organizations achieve those goals by delivering a stronger compensation strategy.

I have two guests joining me today. We have one returning guest to the podcast, Kim O'Grady. Welcome, Kim! I'll let you introduce yourself in just a moment. We also have a new guest, Jenny Walling, our Senior Manager of Compensation Services and Benchmarking here at Payscale.

So, let's get started. Kim, would you like to reintroduce yourself to the audience? I think the last time you were on the podcast, we talked about how to speak the language of finance, or at least I think that was the topic. But yes, please reintroduce yourself to everyone listening.

Kim O’Grady (01:35.147)

Awesome. Well, thank you, Ruth, so much for having me back. I'm excited to be here again.

I'm Kim O'Grady, the Compensation Supervisor at Designer Brands, where I've been for seven years. I have to say, I love my job. Not only do I have a fabulous shoe closet, but I also get to work with some amazing people and on really meaningful projects.

In my role, I support the U.S. business, which includes more than 500 retail stores, several corporate offices, and a few logistics centers. I work across everything from base pay to short-term and long-term incentives.

When I'm not working, you'll usually find me hanging out with my family, playing ball in the backyard with my golden retriever, or planning my next cruise. So, the island theme is perfect because I love the beach.

Ruth Thomas (02:23.741)  

Me too, me too. Okay, Jenny, would you like to introduce yourself?

Jenny Walling (02:27.586)

Yes, absolutely. Thank you so much, Ruth.

I'm Jenny Walling, and I lead our Compensation Services and Benchmarking teams here at Payscale. I've been with the company for almost eight and a half years. I spent the first half of that time as a compensation consultant, working directly with our clients and helping them with everything from building compensation structures from scratch to navigating complex strategic questions.

That's really where I fell in love with this work. I was in a unique position to see firsthand just how much compensation matters. I saw the positive impact that thoughtful compensation strategies can have on both our clients and their employees, and that made a lasting impression on me.

When I moved into a management role, my goal was to scale that ability to help. I wanted to partner with even more organizations and help them move beyond that feeling of being alone on a compensation island.

Ruth Thomas (03:35.579)

We normally ask whether you're a coffee or tea person, but since we're sticking with the island theme today, and it's so hot here in the UK, let's switch it up.

Kim, if you were on an island, what would your favorite cocktail be?

Kim O'Grady (03:48.864)

I would have to go with a lemon drop martini. It's kind of a throwback to being a kid, drinking lemonade on the beach. It's still tart, refreshing, and perfect for an island day.

Ruth Thomas (03:57.672)

Lovely, lovely. And Kim sorry, Jenny, sorry, what about you?

Jenny Walling (04:02.046)

I think I'd go with a piña colada. I love anything slushy, and especially when you're on the beach, it's so cool and refreshing.

Ruth Thomas (04:12.689)

Yeah, I might join you with that piña colada, I think. I always feel like when I'm on the beach, I have to have at least one piña colada. It's almost a requirement. If it wasn't that, it would probably be a margarita.

So, we can all imagine ourselves enjoying those cocktails. I've actually just got water in a bottle here, but that's fine. It is late in the evening for me while we're recording this podcast.

Okay, let's get back to the island and the compensation island problem.

Jenny Walling (04:16.22)

Yeah.

Jenny Walling (04:22.315)

Actually.

Ruth Thomas (04:40.339)

I mean, from my own experience working in compensation for many years, it did sometimes feel like a very isolated job, particularly at a time when compensation was still very much a secretive function.

I think because of that secrecy, we often felt disconnected from our colleagues in HR and even from the broader business. It sometimes felt like I was working in a box, looking at the numbers, managing highly specialized processes, and relying on expertise that not everyone around me understood.

I think another reason compensation professionals can feel isolated is because compensation teams are often very small within an organization. In our Compensation Best Practices Report, we found that for companies with up to 5,000 employees, the average compensation team size was around two people. And when you think about the scope of responsibilities those teams manage, that really isn't a large team.

So why do many compensation professionals feel like they're carrying these responsibilities alone? Why do they feel disconnected, and what makes it challenging for compensation teams today?

Jenny, do you want to start us off here? What do you think contributes to compensation teams feeling so isolated?

Jenny Walling (06:00.492)

Yeah, you know, I think so much has changed over the last eight and a half years that I've been at Payscale. When I think about some of the trends that have made compensation more complex and contributed to teams feeling more isolated, the first thing that comes to mind is how fragmented the talent market has become.

Before the pandemic, if you were a company in Denver, you were primarily competing for talent in Denver. Now, remote work has completely changed that equation. We have clients competing nationally and sometimes even globally for the same roles.

That added complexity means that the same role in Austin, Texas, could have a very different market value than that same role in San Francisco or even Raleigh, North Carolina. So, a lot of clients are starting to ask questions like: How do I build a compensation strategy that's competitive across multiple markets? How do I attract the talent I need without blowing my budget?

Another piece of it, as you mentioned, is that compensation used to be much more private. We've seen a major shift with pay transparency and with employees expecting to understand more about their compensation. Employees today want to know not just what they're paid, but why they're paid that way and what their growth opportunities look like.

We've also seen that employees aren't necessarily staying at organizations for decades like they once did. So, if someone doesn't understand their compensation or doesn't see a path for growth, they're more likely to start looking elsewhere.

Then you add in pay transparency legislation and the fact that salary information is available everywhere online. There's a lot of information out there, but often not enough context around how a specific organization approaches compensation or how those numbers apply to their unique situation.

But because of all of these changes, compensation has also become impossible to ignore. It's no longer a back-office function. It is directly connected to whether you can attract and retain your best people.

So, when we talk about the compensation island problem, it's not just that these teams are small but mighty or that they're being asked to do more with less. It's that they're being asked to solve increasingly complex strategic problems with limited resources, and oftentimes without the executive backing needed to recognize how critical compensation really is.

I think that has been one of the biggest challenges for compensation teams today.

Ruth Thomas (09:03.677)

So all those problems, Kim, that like Jenny's laid out there, what are the risks when comp teams are forced to navigate these challenges alone?

Kim O'Grady (09:13.423)

Yeah, what Jenny said really resonated with me. I know this is a podcast, so you can't see me, but I was definitely nodding my head because that's exactly where my mind was going.

It's gotten so complex, and there are so many different things that we need to understand as compensation practitioners that it's unrealistic to think one team can manage it all alone.

As a retailer, we operate across dozens of states, and each location has its own pay transparency laws, requirements, and regulations that are constantly evolving. Just staying current with all of those changes can be a challenge and a full-time job in itself.

At the same time, as Jenny mentioned, compensation is no longer a black box. It's no longer a behind-the-scenes conversation that's considered taboo to discuss. Employees have access to so much salary information, they're having conversations with their peers, and they expect transparency.

We're no longer making compensation decisions in a box. We're also helping leaders communicate and defend those decisions. It comes up in very practical ways when leaders ask questions like, "Why am I paying this much for someone in Columbus, Ohio, but I need to pay this much for someone in New York City?"

And with remote work, we now have leaders managing employees across different locations, each with different market conditions. They need to be able to explain why compensation decisions may look different for team members in different regions.

When you're trying to manage all of that on your own, it's really easy to get stuck in a reactive mode. Instead of focusing on strategy and moving the business forward, you're just trying to keep your head above water.

That's why access to expertise and trusted partners has become so valuable. No one team can do it all alone anymore.

Ruth Thomas (11:13.903)

Yeah, and I think that growing complexity, the increasing need to defend compensation decisions within the organization, and, as you said, Jenny, the need to connect compensation to real strategic outcomes are all becoming more important.

The role has grown, the challenges have grown, and the amount of knowledge and expertise needed to manage compensation effectively has grown as well.

So, let's pivot to talking about why compensation has become more strategic. We talk about "strategic compensation" sometimes pretty casually, saying everything is becoming more strategic, but that can mean different things to different organizations.

When you both talk about compensation becoming more strategic, what does that actually look like in practice? Jenny, what strategic work gets pushed aside when teams are buried in administrative tasks?

Jenny Walling (12:17.09)

Yeah. And I think when I think about this, administrative compensation work is necessary, right? We need to process merit cycles, handle data entry, maintain our processes, keep the lights on, and keep things moving. But that's not where the biggest business impact happens.

With strategic compensation, we're able to start asking bigger questions. How does our compensation program actually help us attract the talent we need? How do we communicate our compensation philosophy to employees so they understand why they're paid the way they are and want to stay with us?

It’s about being able to take a step back and really focus on proving the return on investment. Asking questions like: We restructured our salary bands last year, but did that actually improve retention for the roles we were targeting? Were we able to attract stronger candidates because of those changes?

When we're able to operate more strategically, compensation becomes a lever the business can use to achieve its goals.

When we work with clients, we see this challenge pretty consistently. Teams get buried in administrative work. They're handling day-to-day requests, keeping market pricing updated, and managing ongoing processes. Then, suddenly, six months have gone by, and they haven't had the opportunity to sit down with leadership and ask: Is our compensation approach actually working? Did these changes move the needle? What return are we seeing from these investments?

When teams are focused so much on keeping the lights on, they don't have the time or space to step back and think strategically. And I think that's a real problem because it means compensation continues to be viewed as overhead instead of as a business driver.

That's where we see the gap between administration and strategy really show up. When teams don't have the bandwidth, they can't focus on the work that creates the biggest impact, or even access the data they need to understand whether their compensation program is actually working.

Ruth Thomas (14:48.987)

Mm-hmm. And Kim, as a practitioner, how does that play out for you? You know, like administrative to compensation strategy work?

Kim O'Grady (14:58.598)

Absolutely. And what Jenny was saying really resonates with me. I definitely enjoy working in the compensation strategy space because it's so important for us as practitioners to understand what's happening within the business.

Every organization is at a different point in its business lifecycle. Are we growing? Are we focused on managing costs? Are we trying to attract and retain talent? What will our business needs look like a year from now? What kind of talent are we building for the future?

When we get caught up in administrative tasks, we're often just solving yesterday's problems. We're keeping things moving, but we don't have the time to look ahead and understand what's happening in the broader business landscape. We don't get the opportunity to explore new programs or strategies that we may need to implement because of what's coming down the pipeline.

That's really where I like to spend my time, in that strategic space, because that's where compensation can have the biggest impact.

But I know personally there are absolutely times when we get stuck in the day-to-day administrative work. A merit cycle has to happen. There are specific steps that need to be followed. And during those periods, it can feel like there isn't enough time to step back and look at other metrics or ask bigger questions because you're focused on making sure the process runs smoothly.

As a practitioner, I always find those moments challenging because I know I can contribute so much more. I’m personally more fulfilled when I get to work on the strategy side and see how compensation decisions impact the business, whether that's improving retention, attracting the right candidates, or keeping declined offer rates low.

Ruth Thomas (16:31.763)

So, getting off the island is really about connecting yourself more closely to the business. And I think one of the ways organizations are trying to address this challenge is by recognizing that a lot of compensation work is very repetitive and cyclical.

We’re seeing organizations invest in technology to help streamline those processes, and technology is advancing very quickly. Our own technology here at Payscale is evolving rapidly, especially with the introduction of AI. We’re starting to see the benefits of automating a lot of that repetitive, cyclical work.

That’s a huge opportunity because it allows compensation professionals to spend more time on the strategic side of their roles.

But technology on its own isn’t enough. That’s something we see with our customers, and Jenny, I think you’d agree with me there. Organizations also need expertise.

That’s really where I want to take the conversation next. Why is expertise such an important part of achieving success in compensation today?

Jenny, let’s start with you. How do services amplify your investment in compensation technology? That’s really how we think about our service offerings here at Payscale.

 
Jenny Walling (17:46.657)

Absolutely. And I think we see organizations invest in compensation technology with the best intentions, but oftentimes they end up hitting a wall.

They have the platform, they have the data, and they have the benchmarking tools, but maybe they don't have a roadmap for how to use it effectively. Or they have a roadmap, but it requires a level of compensation expertise that they don't necessarily have in-house to implement it successfully.

For me, the true unlock happens when you pair technology with expertise. That's where the platform becomes exponentially more valuable.

We work with clients to understand what strategic questions they’re trying to answer, and then we help them use the technology to get there. It’s about recognizing that technology is the tool, but expertise is what transforms that tool into meaningful business results.

 
Ruth Thomas (18:53.223)

We've seen the way we support compensation professionals evolve because the work our solutions are doing has changed.

We’ve talked about how more automation is taking on a lot of the repetitive, cyclical work, so how are we thinking about shifting the service offerings we provide to our customers as a result of those changes?

Jenny Walling (19:18.09)

Absolutely. And just as our platforms and technology are evolving, we want to make sure our services are evolving right alongside them.

A big focus for us is ensuring that we’re able to meet clients where they are in their compensation maturity journey. That has changed quite a bit over the years, as organizations have different needs depending on where they are and what challenges they’re facing.

We might be working with a team of one who is completely overwhelmed by the volume of work they’re managing. Or we may be working with a more established compensation team that’s buried in manual processes and doesn’t have the time to focus on strategic initiatives.

We also see compensation leaders who know exactly what needs to change but are facing an uphill battle internally because their leadership team may not be as compensation-savvy. In those situations, having a neutral third-party partner can provide valuable support and help move those initiatives forward.

We wanted to expand our services because we want our clients to maximize the return on their technology investment. It’s not just about having better data. It’s about having a strategic partner who understands compensation strategy, can benchmark your approach against peers, and can help you implement those changes with confidence.

I think that’s the key insight: technology is critical, but without the expertise to use it strategically, you’re leaving a lot of that value on the table.

Ruth Thomas (20:57.521)

Yeah. And so, Kim, when you think about using expertise, how have you leveraged that in your role? Where has it really helped you?

Kim O'Grady (21:06.007)

Yeah. So, what’s so great about using a third party and having access to that expertise is that they have visibility into so many different organizations and approaches. I only have visibility into my own company and my own network, so having an expert team that can act as a thought partner is incredibly valuable.

Data is important, and that’s absolutely a critical piece. But what I think is even more valuable is having someone who can help me build confidence in my approach and strengthen the story I bring back to the business to help drive decisions forward.

Great partners don’t just give you the answer. Great partners help you find the answer. They challenge your thinking, ask the right questions, and help you come to the best decision for your organization.

So, I completely echo what Jenny said. The tools and technology are incredibly valuable and make my job easier, but having that strategic partnership and a true thought partner to work alongside me is invaluable.

Ruth Thomas (22:06.513)

Yeah. I mean, you've made the investment in the technology, so let's assume you've already made that investment. You really want to maximize that investment and, especially, be able to show the ROI to your leaders.

Because when renewal time comes around, if you have a tool that's been sitting there and you haven't been able to demonstrate its impact on the business, you're going to have a much harder time getting someone to commit to another three years of that investment. And then you can find yourself in a difficult position, thinking, "How am I going to manage all of this work on my own?"

It's interesting because when people think about services in the software world, they often think of it as implementation support. You buy the tool, someone helps you set it up, they hand it off, and then you're on your own.

That approach makes sense for a lot of tools, but compensation strategy isn't really like that. It's not a one-time project. It's an ongoing, living, breathing process that evolves alongside your organization's talent strategy.

So, Jenny, what makes a true partnership different from traditional consulting or support?

Jenny Walling (23:17.122)

Yes. And I love this question because I think the distinction really matters. Kim was touching on this in her last answer as well.

With traditional consulting, the work often looks like someone coming in, running a project, delivering a report or recommendations, and then leaving. After that, the responsibility falls back on you to figure out how to implement those recommendations long term and make adjustments as needed.

Support can also be more reactive. If something breaks, you reach out for help. If something isn't working as expected, you contact the support team to troubleshoot the issue.

A partnership is different because it's ongoing and collaborative. It's about saying, "We're invested in your long-term compensation maturity journey." That means we're not just focused on the immediate project in front of us. We're thinking about your broader strategy and goals.

We’re considering your short-term, mid-term, and long-term objectives and asking questions like: What do we need to account for if we make this decision? How will this impact where you want to go next?

When you have a true partner, they become an extension of your team. As we’ve been discussing, it’s about not being alone on that compensation island. It’s having someone who can help you navigate decisions, bring insights from what other organizations are doing, and provide a space to talk through different strategic options.

A great partner isn’t there to simply tell you what to do. They’re there to have the conversation, work through the options together, determine what’s best for your organization, and help make sure it actually works.

Ruth Thomas (25:30.333)

And you talked earlier about how we often think about our relationship with customers as helping them progress through their compensation maturity journey, which is a model we use here at Payscale quite often.

We think about how organizations begin their compensation journey. Maybe they're a startup or a relatively new company, and then how they evolve over time as their compensation programs become more sophisticated and better aligned with their business strategy.

I think one of the things I love about working with customers is seeing how they progress through that journey. It's not about just helping them at the beginning. It's about being there as they continue to grow and evolve.

So, Jenny, when you're working with customers, is that what you find as well? That the partnership continues to evolve as they move through their compensation maturity journey?

Jenny Walling (26:18.39)

Absolutely. And I love that too because, having been here for over eight years, I’ve been able to see how we’ve progressed as an organization in our own compensation journey, as well as our technology journey.

But what I really enjoy is being able to walk alongside our clients through their journeys and see how they grow and evolve over time.

Honestly, that was one of my favorite parts of being a compensation consultant: building those long-term relationships with clients and working with them year after year. Being able to come back and say, "Hey, I know the last time we talked, you implemented some new pay ranges. How did it go? How was it received?"

Being able to hear that feedback and understand the impact of those decisions makes it feel like you have more skin in the game.

We genuinely care about whether your compensation program works because your success feels like our success. We want to make sure our clients are successful and that they feel confident in the decisions they're making.

 
Ruth Thomas (27:17.037)

We all share that same value here at Payscale: the importance of compensation and the relationship it has with people and the impact it can have on employees and organizations.

I think that’s fundamentally part of who we are and how we think about our relationships with customers.

Kim, when you think about the role of expertise moving forward, what are some of the areas where you’ll be looking for support in 2026, 2027, and beyond?

 
Jenny Walling (27:28.342)

Yeah.

 
Kim O'Grady (27:42.568)

Yeah, so we’re on a journey right now where we’re exploring things like skills-based pay, which is a huge topic in the compensation space.

We have our job architecture and job descriptions in place, but now we’re looking at what skills-based pay could mean for our organization. It’s something that I don’t necessarily have the time to fully dive into on my own, so that’s an area where I would look to outside expertise to help us evaluate: Does this make sense for our business? Is this the right approach for us? Or is there another strategy that would better support our goals?

And then, of course, AI continues to be a major topic. We’re always looking at where we can use AI to help reduce some of those administrative burdens so we can spend more time focused on the strategic side of compensation.

Ultimately, the goal is always making sure that whatever we put in place helps us attract, retain, and motivate our key talent. That’s always at the heart of what we’re trying to achieve.

 
Ruth Thomas (28:32.083)

Yeah.

I think getting support with AI is important as well because it’s going to be such a fundamental part of how we approach our jobs moving forward. Many of us are going to need support in understanding how to effectively leverage AI and use it to help us become more strategic.

Hopefully, through this conversation, we’ve shown that you don’t have to be in compensation alone. You don’t have to be on that island by yourself. Building partnerships can extend the work you’re able to do and help improve the impact of your compensation programs.

As we close out the podcast, I’d love to hear from both of you. What recommendations do you have for compensation leaders today to make their jobs easier tomorrow?

Jenny, do you want to start us off?

 
Jenny Walling (29:25.654)

Yeah, I was thinking about this, and it may sound simple, but I think it can be transformative: start documenting your current state, and really take the time to document it.

It doesn’t have to be perfect, but having clarity around questions like: What is our compensation strategy today? What are we trying to accomplish? Where is our data coming from? And where are our gaps?

Having that foundation in place is so helpful because once you have that map, you can start identifying what is actually taking up your time and what is truly driving business value.

It can be eye-opening when you realize, "I’m spending 40% of my time on something that isn’t actually moving the needle." Having that visibility allows you to prioritize differently because when we’re buried in administrative work, it’s easy to get stuck in the weeds.

It also allows you to have better conversations with leadership about what you actually need. Instead of saying, "I’m overwhelmed and I need help," you can have a more strategic conversation: "Here’s what we’re doing today. Here’s the gap. And here’s what it would take to close that gap."

I think that leads to much stronger conversations with leadership and ultimately helps you get the resources and support you need to make a bigger impact.

 
Ruth Thomas (31:01.891)

Those are some great tips. And Kim, what would be your advice for organizations that don’t know how to get help or aren’t sure where to begin? Do you have any tips for them?

Kim O'Grady (31:13.305)

Yeah, so I would always start by saying you don’t have to solve all of your problems at once. Start by looking at the areas that are creating the biggest challenges for your organization today and focus there first.

There are so many tools, networks, and resources available that can help you get connected. Look at your local compensation organizations, build your network, and start having conversations with other professionals in the space.

Those connections can help point you toward people with expertise in specific areas and help you find the right partners to support the challenges you’re trying to solve. Your network can be a great resource for finding the right expertise and getting the help you need.

Ruth Thomas (31:51.251)

And LinkedIn is obviously such a great resource now as well. Finding the right people to follow, connecting with others in the compensation space, and learning from their experiences is a great way to access expertise and build your network.

Well, thank you both for joining me on my hot island today. I really appreciated the conversation about partnerships, leveraging expertise, and how we can all continue to grow as compensation professionals and become more strategic in our roles.

Thank you both for joining me. We’d love to hear what you think. If you’d like to get in touch with us, you can email us at coffee@payscale.com with your questions, suggestions, and ideas for future episodes.

If you’re a Payscale customer and didn’t know we offer services, please reach out to your Customer Success Manager. You can also find more details about our services on our website at Payscale.com.

If you realize that services are an underutilized resource that you haven’t been taking advantage of, we encourage you to explore how they can help support your compensation journey.

Thank you both again for joining me today. I look forward to seeing you all on another episode of Comp and Coffee soon.