Getting A Global Team To a State Of Location-Based Pay Equity: Q&A With Jen Paxton, People-first People Leader

Jen Paxton is a people-first leader and most recently, she was VP, People for the world's largest loyalty program provider. She also has the distinction of being named a 2nd Annual People Pioneer, honoring her work as a forward-thinking HR leader who has driven impact with people-first strategies.

Read on to learn what it takes to build a people-first People program.

ChartHop: What were your responsibilities at your last role?

Jen Paxton: For a year and a half, I was the VP People where I oversaw recruiting, employer branding, manager coaching, and served on the executive leadership team.

CH: When you joined the Ontario-based rewards platform, there were 50 people in 15 countries and the compensation was all over the place. You overhauled total rewards and established a fair compensation policy for the global team. How did you arrive at taking a location-based approach to your pay model?

JP: When I first joined, one of the things I knew coming in was that I would need to revamp the total rewards program. Throughout my interview process, I was told that “the art of the deal” approach was how base pay had been determined up to that point, and candidates didn’t like that. I knew that if I took the job, overhauling the compensation policy would be a top priority.

In order to do that, first, I sat down with every single employee because I wanted to get as many people’s feedback and input as possible early on. In those conversations, I let people know that we were going to be overhauling the total rewards program and I wanted to understand, “Is pay equity something you value? Is being paid similar or on par with your peers something you want to see us do here?” I’ve been a strong champion of this for years, at a previous company I made sure that we had pay equity throughout the entire organization so it’s something that I wanted to see if I could do on a global scale.

Next, I spoke with members of the management and leadership team to understand if we go this route, what does it mean in practice and how do we keep ourselves accountable? And then in November 2021, we held a leadership team offsite where we all got together to hash out the details. We discussed, if we go with a location-based pay model for the global team, what location are we choosing, why are we choosing that location, and can we afford this? It costs a good amount of money to get everyone to a state of equity. But there was already a culture that’s based on equity between employees and to not move forward with a location-based pay model would feel disingenuous to that culture, which I brought up to the leadership team.

CH: To get everyone to a state of equality took about $500,000 CAD. What was the driving force behind the compensation philosophy built on equality? How did you get leadership buy-in to sign off on this investment?

JP: We looked at it from an employee retention perspective. For current employees, we want them to feel valued and that their impact is just as important as that of their peers. And then in addition to that, I spoke with the leadership team about hiring plans for 2022 and I said it’s going to be easier from a talent acquisition perspective to recruit top talent in different markets.

The company ethos is to not just focus on the majority of people but on everyone at the company. Because everything, from the policies implemented to the ways of work affects all the employees, not just those who make up the majority.

CH: As a result of these changes made to the total compensation strategy, employee turnover decreased by almost 4%, that's 1 person or less each month. That’s fantastic! How long did it take to see that ROI? Have the changes to total compensation had an impact on attracting talent in a competitive market?

JP: It took about six months to see a decrease in turnover. When you first join as a People leader, it takes time to build trust with the organization. Some people are going to stick along for the ride while others will jump ship during a leadership transition. Before I joined, there was a lot of cultural baggage and debt. It took about six months to unpack it all.

Part of the changes to the total compensation package was overhauling the interview process. Previously, salary for a job posting was a potentially nebulous number that the recruiter would throw out for the candidate to react to. We’ve since introduced transparency to the process and now include salary bands for roles in the job posting. Having the compensation right up front has been the most impactful change for recruiting conversations and attracting top talent.

I myself have had conversations with prospective candidates in the initial screening where their target pay is over our allotted range. In this scenario, I shared our compensation philosophy and told them, “As part of our philosophy, we decided that we want to be in the 50th percentile for all of Canada. What that means for the role you’ve applied for is the pay range is X to Y.” I then give them space to take that information in and ask if it makes sense. While some candidates will walk away if the pay is lower than they’re willing to accept, we’ve actually had a few candidates boomerang back even if they were offered a higher salary elsewhere because they remembered and appreciated the transparency and respect they received during the interview process.

CH: What does being a people-first People leader mean to you?

JP: Honestly, I think being people-first means whenever you’re making a decision or putting out a policy/making a change or thinking of where the business is going, you’re really thinking at the same time how it’s going to affect the people at the company. And not just in the sense of, ‘what they’re going to react to’. But how it’s going to affect their day-to-day life, their income, and their families.

More Lessons from the 2nd Annual People Pioneers

Interested in even more lessons learned from senior HR leaders? Check out the full list of 2nd Annual People Pioneers and read more about the people-first initiatives they implemented to drive impact through creating a connected team, growing intentionally and sustainably, implementing wellness benefits, and much more.