Megan Nail | NFP: Total Rewards and the Tech Workforce
Our free, 70-page Total Rewards: Indiana Tech Trends Report is brought to you through a unique partnership between TechPoint and NFP.
We talk to Megan Nail, Vice President of the Total Rewards Practice at NFP. NFP is a leading benefits consultant, wealth manager, and retirement plan advisor. In this episode, we talk about how tech-driven employers can leverage compensation and benefit plan design to attract and retain talent. We explore considerations for navigating total rewards administration in a hybrid or remote first work environment. And we discuss the importance of communicating compensation philosophy to employees and navigating questions related to the current economic climate.
Jessica Stephenson
Hello everyone. I’m Jessica Stevenson, vice President of Marketing with TechPoint. And joining me today on the Circuit podcast is Megan Nail, VP of Total Rewards with NFP. And we’re happy to have her on the podcast today. Megan, for those of you who aren’t familiar with NFP, can you talk a little bit about your organization’s overall services as well as your mission with the Total Rewards Practice specifically?
Megan Nail
Thanks, Jessica. Of course. It’s so nice to be here. I appreciate you having me. So, NFP, we are a global total rewards and insurance carriers. So we work in all areas, specifically focusing quite a bit on employee benefits and total rewards and what that whole picture looks like from compensation to benefits to all the other types of insurance products and other consulting needs that companies and organizations might have.
Jessica Stephenson
Okay. Do you focus on any certain industries or really just industry agnostic?
Megan Nail
We’re pretty broad in terms of our industries. We definitely have our specializations. I know in our local office here in Indianapolis, we work just across a broad range of industries. Of course, we love our tech clients and love working with TechPoint, uh, nonprofits, public sector, all different types of industries.
Jessica Stephenson
Okay, great. I’m sure you’ve got a lot of experience across a number of different realms. Well, Megan, we’ve known each other for a number of years thanks to working together on various local and state SHRM initiatives. And for all of you who don’t know, uh, about SHRM, that’s the Society for Human Resources Management. And so not only do you work with a wide cross section of organizations and industries on their total rewards strategies during your day job at NFP, you also serve in a big volunteer leader role for SHRM National. Can you share a quick overview of what that role is and what it entails?
Megan Nail
Sure. Yeah. SHRM’s been a big part of my life personally and professionally over the past 15, 20 years. So my current role is on the membership advisory council and basically we’re volunteer leaders. So it’s my unpaid job, unlike NFP, which is my paid job, we really service that interface between the SHRM members and the SHRM board of directors. So I like to think about it, we’re the voice of the membership to the SHRM board, just to make sure that they’re informed on what all of our members are needing, wanting and what they’re experiencing as members of SHRM.
Talent Acquisition (and Retention) in Tech.
Jessica Stephenson
Okay, great. So through your progressive roles, both at your day job and with SHRM, you’ve really had a chance to engage with a number of organizations across Indiana and really nationwide on the most challenging parts of talent acquisition and retention. Megan, what are, what would you say are some of the common missteps you see employers making with tech and business skilled workers in particular in the current economic climate?
Megan Nail
Yeah, it’s a really, it’s a really challenging labor market right now, I think. And we’re all trying to play that game of matching up from a total rewards perspective, what our candidates and what our employees are looking for, and then what we have to offer. And I think especially when we’re dealing with the ultra highly competitive tech market and business services, getting that matching game rate is even more important. So when I think about it, each employee has their own, each person has their own kind of picture of what total rewards are most meaningful to them. I know even just thinking about myself, kind of what I was looking for earlier in my career is different than what I’m looking for in mid-career, maybe earlier on some of those training and development, you know, things like financial wellness, those pieces were really, really important, just where I was in my life and my career, and now it’s just changed to other things, benefits, taking more prominence and so forth. So I think one of the missteps that I see with a lot of our clients is really just thinking about their total rewards package as being really stagnant as something that we offer. We maybe make tiny updates every year. We tweak a benefits plan, something like that. And really not taking that time to reassess how, what their workforce in their desired workforce is looking for in the future. And then looking at potentially some more creative or holistic changes based on that so they can be more successful in attracting and retaining talent.
Jessica Stephenson
Okay, great. So what are some of the unique practices that employers are now adopting to remain competitive in their total rewards packages and as they think about how often they wanna reassess their packages to stay on top of just the climate, especially since the pandemic?
Megan Nail
Yeah, absolutely. A couple of things that I’m seeing more and more are family focused benefits, and I use the word family very broadly in kind of thinking about everything from pet insurance as we know pets are a member of our family all the way to family building benefits. So even from a diversity equity inclusion standpoint, families of all types, uh, what type of support is needed to really build families in different ways or traditionally. And then also just thinking about how to bring that forward to childcare benefits and elder care benefits and just dependence in general. We know that from a diversity, equity, inclusion and belonging standpoint, we have fewer workers right now than what we need in the workforce. And a lot of that is just due to kind of some of those childcare, some of those family type dynamics that are maybe preventing individuals from working as much as they want or in the way that they want.
Megan Nail
And so employers are really looking for creative ways to bring that about. I think in general, in addition to that is just flexibility. So kind of what is that flexibility not only in things like work schedule and work location and, and those traditional aspects of flexibility, but also just thinking about flexibility of giving our our employees some choice in what their package looks like and how they can customize it to them. And then finally, I would add in financial wellness, taking more and more prominence. So I know I’m in the compensation world, it’s just really hard to keep pace with that right now. So just thinking about how can we not only pay our team competitively and equitably, but how can we help them maximize that investment that we’re making in their compensation through some really strong financial wellness benefits to again, help them maximize the power of that compensation that we’re giving.
Total Rewards Practice.
Jessica Stephenson
That’s, that’s a great deep dive and I love how you’re talking about not just compensation, but the benefit piece and even just wraparound resources as well. And I should have mentioned this earlier when we were talking about your title, including the words total rewards in it. And that’s really, I think in our experience, especially over the last 10 or 15 years, something that’s really a feather in the cap of employers to really lean into thinking about that total rewards experience, especially depending on where they pay relative to market. There’s some unique thing, unique things that you can do in the design of that to attract different employees where they are at different points in their lives, whether it’s, like you said, thinking about different choices and insurance plans or even, like whether you have a significant part of like variable compensation maybe for different roles and that kind of thing too. Is there anything you might add based on I’m variable compensation and like how popular that is in the last few years?
Megan Nail
Yeah, I agree. I mean, variable compensation, so anything kind of outside of that, uh, standard base pay that you’re offering for a position has grown in popularity immensely. I know, you know, probably 10 years ago when I was internal doing compensation within a particular company, we would have debates all the time about should we have bonus opportunities or incentive opportunities for everyone in the organization or should just be managers and up. That has really changed, I think, for the better where now we do see that variable pay across the organization really at all levels, and I think it’s become more popular for a couple of different reasons. First, it’s a great way to really incent and motivate certain behaviors and really to support like goal setting and company goals and individual goals and team goals and all of those pieces. Just a great way to more directly tie rewards to that. And then also it gives a lot of financial flexibility for the organizations that if it’s designed appropriately from a finance standpoint, again, it’s something that’s set up where if there is an off year and there’s not an ability to pay, it just gives some more flexibility without having to think about, maybe some more measures in an off year that wouldn’t be as desirable.
Compensation Philosophy.
Jessica Stephenson
Yeah, absolutely. So in a global competition for talent startup and scale up employers especially are increasingly navigating the challenges of compensation administration across state lines and for in-person versus remote employees, I have to imagine this is a hot topic for you, especially since the pandemic began. So Megan, what would you say some best practices are that these employers should think about as they wrestle with that compensation philosophy in a hybrid or even a remote first work world?
Megan Nail
Yeah, it’s a great question and I would definitely say there’s not one size fits all answer to it. So I think the first piece is really to think about your workforce strategy and are we really mainly centered in a few locations or maybe one location, but we allow remote work and we allow people to choose to work remotely in other locations. That’s a very different strategy from a workforce perspective than a true remote. First, we’re going to hire everywhere, and we’re really open to that. So I think I would first step back from a strategy and really think about that piece and then just think about kind of what your, where you’re really hiring people. And what I like to focus in on are maybe some of those ultra high cost markets that we have either nationally or internationally that are really so much different than anywhere else.
Megan Nail
Think about your San Francisco, New York, very different than a lot of other places throughout the country. And then just think about kind of those places in between. So you may not need to pay a differential or get so fine detailed, for different locations that are actually very close to one another. So my thought is really think about where your workforce strategy is and then try to match to that, but don’t overthink it. And then also realize that with remote work, there are a lot of benefits to that, and there have been a number of studies that have come out recently that employees are even willing to maybe take a lesser package to have that ability to remote work and to work a little bit less. So again, you want to be equitable. You want it to reflect the market where people live and where you’re hiring, but I think you have a little bit of flexibility in how the approach is, as long as you have good communication about what you’re doing and why.
Employee Benefits in a Work-From-Home World.
Jessica Stephenson
Absolutely. And I don’t know if across your a client portfolio, if you could speak to whether you’re seeing big differences in how employers are, offering sort of fringe at-home benefits. Are they covering internet? Are they covering the mobile bill? Are they like doing a stipend for a standing desk? Those kinds of things. Does that get into your realm very much and are you seeing big spectrum differences?
Megan Nail
Lots of questions about that. I would say kind of what I would say what I’m seeing most is setting up employees for success. So giving them an at-home setup at a reasonable cost level, some sort of stipend to really get them into a good place if that’s something that you’re supporting on the remote work. So do they have the, the IT equipment, the monitors and ergonomics set up that really makes sense. And then from there, just thinking about being flexible in terms of, I’m often seeing these stipends, so knowing that, you know, everyone has a different cell phone plan, everyone has a different IT need or set up not getting into kind of the details and trying to micromanage what that is or even track it, but giving some type of stipends to help offset some of those expenses. It’s a really nice benefit. I don’t think it’s a have to have, but it’s a really nice piece of a total rewards package that at a pretty reasonable cost can send a great message about how much you value all of your employees, whether they work remotely or in person.
Jessica Stephenson
Yeah, that’s actually a great segue into thinking about how you’re communicating the value of employee total rewards packages. You know, what have you seen work really well in your experience at NFP with the care that whoever your main points of contact are in an employer the care that they take and that you do so alongside with them to make sure that employees are engaged and that they’re understanding the options available to them and actually sort of, you know, using it as a retention tool. Can you speak to that?
Megan Nail
Yeah, I think it’s definitely, first my number one advice, because I see missteps on this all the time, is sit down and look at everything that you offer and put it on a document, put it on a piece of paper, type it out because that is usually the first thing that I see is that so many different programs are offered, but we haven’t even really done an inventory to know what we should be communicating and promoting. So do your own inventory first of all of those different things. And then when you think about communicating it, we know in the world of total rewards, there are usually at least two really key touchpoints, maybe at a compensation increase time or a bonus award point of the cycle. And then also at open enrollment, think about those two times and be thoughtful about how you can communicate the total package and the value of that that employees are receiving during those periods.
Megan Nail
But then also don’t miss really communicating throughout the year. So giving those little reminders throughout the year about what the benefits are, what these programs are, how they can be used is really important. So if you’re going through a really busy time, maybe you’re getting ready for a new product launch or something along those lines, bring out those mental health benefits that you have, really make sure to share those, embed those within team meetings the different benefits so that people are hearing about them in a variety of forms, a variety of mediums throughout the year and not just at those critical times.
Jessica Stephenson
Okay, great. You mentioned mental health benefits and I wonder if you’re seeing I I would imagine that you’re seeing an increased consumption and interest in that type of benefit across your organizations, but I also wonder about maybe in tech specifically because tech is often kind of thought of as the industry where there were more remote workers even before the pandemic just because of such high demand for some of the more technical software development oriented and other like product manager type skills and so forth. So I wonder when you think about remote first, you also are challenge as an organization to keep people connected and engaged in corporate culture. And so how do you see that bleeding into whether employers are really leaning in and adopting that and actually implementing it or maybe just kind of not quite there yet?
Megan Nail
Yeah, I think it’s definitely there’s so much talk and action too, I think to some extent around mental wellbeing benefits and also just culture and how we keep people connected broadly, especially as you said on those remote or hybrid cultures where we’re not all together all the time. My personal belief is we don’t have to be physically together to have a great culture. So thinking about how we can engage in different ways and be thoughtful with each other and just take care and notice on what people are going through and then connect them with those resources. I do think when it comes to mental wellbeing, we’ve seen huge strides in a positive way over the course of the pandemic about not only acceptance of what some of those potential challenges and what those needs are, but also having more of a tech first approach to mental wellbeing, right? Tech therapy, virtual visits, things like that. Really making it more accessible to meet people where they’re at, not only physically but also emotionally. So really just thinking about what that big picture is and then how teams can be connected from a culture standpoint, which also should help our mental wellbeing no matter where they’re located.
2022 Total Rewards Report.
Jessica Stephenson
Yeah, I love that and I agree with that as well. We can make that, that type of environment, uh, work. And I love that you talk about being tech forward with how you make some of these benefits available, especially for tech driven organizations that are competing for talent in a global marketplace and want to also be perceived as being tech forward themselves to attract the best candidates. It’s important that they think about, the user experience for some of their, some of their benefit options too. Okay. Absolutely. Yeah. So a couple of months ago, you and your colleague Laura Butler presented, uh, findings from the new 2022 Total Rewards Indiana Tech Trends report, which was jointly produced by NFP and TechPoint. And by the way, everyone, you can download that report for free at techpoint.org and we’ll add a link to the show notes too. It used market data to benchmark 10 positions in the tech field.
Jessica Stephenson
And Megan, you presented those findings at our skills first hiring event launch mission 4k, which was the jumping off point for the Indiana tech community’s joint effort to inclusively add 41,000 net new tech workers to our ecosystem by the year 2030. So can you share your perspective on a couple of key questions that I know surfaced from your session at that event? And the first is in our Mission 41K efforts, we acknowledge that we’re faced with a current forecast of fewer highly skilled workers available to participate in the workforce, thanks to things like the baby boomer retirement and fewer adults choosing to participate at full employment levels since the pandemic. And so, you know, we are trying to augment this community effort, this collaborative impact effort to create more inclusive pathways for people to gain the skills to succeed in the tech driven jobs of tomorrow.
Skills-First Hiring.
Jessica Stephenson
And so through our work, we realize that requires a mindset shift away from the traditional way of kind of by default requiring four year degrees or a minimum of x years of work experience in so many different positions and, a shift rather toward assessing job fit based on verified skills alignment instead. So Megan, what, what should employers consider as they align pay and or benefits to skills-first qualifications rather than traditional education or experience heavy qualifications across all job categories. We know that there are some job categories that a different approach is warranted.
Megan Nail
I think it’s great. I think it’s, that’s the direction that we need to go to get more individuals to choose to participate in not only the workforce in general, but in this industry, which is so needed. So I think when you think about how pay links into that skills first, really looking at the job and the person’s ability to do the job and the skills that they bring to meet what those expectations of the job are, and then really mapping out your pay to what those skills are and then what that career path is as that person hopefully continues to grow and develop their skills going forward. And I think when we can bring the skills and the career path and the pay together and really allow someone to see how they can progress in all of those different areas, that’s really what creates a compelling career opportunity, both personally growing your financial opportunity throughout that as well, your benefits, your total rewards, verbally matching that to how someone’s career is growing and then thinking about those different pieces not only on base pay, but also variable pay and how we’re maybe incenting them to continue to grow and to meet those career milestones that you’ve hopefully established so that they’re really tuned in and can be retained by your company, continue to grow themselves and then to grow your company along with it.
Inflation and Pay Increases.
Jessica Stephenson
Great, great. And there’s lots of different on-ramps available for people certainly for the traditional four year degree individuals, but transitioning military veterans people who wanna do a career pivot someone who might become an adult apprentice or even started as a youth apprentice to get some of those skills while they’re learning on the job. Okay. So the other discussion topic that I think was a hot topic that might be on a lot of people’s minds right now is that I find that came from Launch Mission 41K is how employers might field questions from employees about whether inflation has an impact on pay increases. And so I remember seeing your session and you and your colleague Laura talking about whether inflation, excuse me, whether there is any relationship between cost of living and cost of labor.
Megan Nail
It’s a hot question right now. It’s probably the number one question that I get. And while they may be related in some ways, they’re really different. So if we think about cost of wages and cost of labor, that’s how much the market is really demanding is being paid for those skills as we talked about that job to be performed. Inflation really represents the cost of goods. So we usually think about food, fuel and housing as being kind of key indicators of that. So while as you shared, Jessica, we’re in this tight labor market, right? There’s not enough people available to work and to fill the jobs that we’re in, that is really what is driving up cost of wages, but it’s not a direct correlation to inflation. Inflation is much higher right now than what we see wages increase at. So wages really tend to be more steady over time.
Megan Nail
So if you even think back, five years ago, or even in the past few years, our inflation was almost zero for a long time, but we still saw wages kind of taking this steady increase up by roughly around 3% each year. Once we give someone base pay, it’s really, really hard to take it back. Usually when I ask that question to a group of people, very few people raise their hands and have ever really given a pay cut to a large group of people. So because employers know that it’s probably something that is going to stay steady, tend to be a little bit more conservative in increasing wages and not going quite as high as what our inflation is right now. So although there’s some relationship, it’s not really a relationship between the two, they just both happen to be rising at a fast rate right now.
Pay Transparency.
Jessica Stephenson
Yeah, that’s, that’s, that makes sense and still sometimes hard to convey to employees to under who maybe aren’t up on like what all the pay bands are and that kind of thing for an organization. So when you think about how you might advise employers to talk to their teams, to their workforces about compensation philosophy, like what are some of the things that you most often see employers being transparent about with regards to how they create awareness about how they pay?
Megan Nail
I’m a big believer in having a philosophy, kind of the why behind what you do and sharing that with your employees. So there’s a whole range of transparency. Obviously you can be transparent on all of your ranges if, if you want, if that’s your decision, but to me, the starting place is at least explaining the why. And it doesn’t have to be something overly complicated or super technical. I think just explaining the different factors that go into the decision. Do we benchmark salaries or how do we get a sense of the external market? How do skills and career path play a role in that? How does that change in terms of pay budget is the one that people don’t typically like to think about, but that also plays a role in how we can budget and what that piece plays into, what our decisions are.
Megan Nail
We talked about the relationship earlier between variable opinion and base pay, kind of what, what can you expect on both of those and what is your opportunity? So just putting a few sentences together, a few paragraphs to really give insight as to why and how your company thinks about compensation and making sure to share that with employees, they can help fill that gap. If we don’t explain anything and we’re really opaque about the whole process, it can lead to understandably a lot of questions about fairness and how this came up and how these decisions are made. So shedding a little bit of light on it is really important.
Jessica Stephenson
Okay, great. So as we work together to increase tech job creation in the state of Indiana obviously as a part of Mission 41K for us as well, what do you see as the biggest opportunities for employers to make their total rewards packages and or wraparound benefits appealing enough to attract and retain talent? So the comp piece, the benefit piece, and even some of the services that might help more people from a broader section of society have more on-ramps into successful sustainable employment.
Megan Nail
Yeah, so I think first off, communication. So look at what you currently have and make sure that you’re communicating it well. Second, think about again, who you’re trying to attract in general and what benefits would help them to your, to use your words, Jessica, on ramp into these careers. So whether it’s some of those family benefits, whether it’s some of those financial wellness benefits just really thinking about what barriers may exist and then what types of benefits packages or total worth can we put in place to help mitigate those. I can give an example from a client that I was working with that I thought was really creative. It was a role that required some level of after hours type events and commitment that needed to be done, in the evenings to be successful in that role.
Megan Nail
And this employer, very small employer, I think they had, 25 employees, so not a huge company decided to give a babysitting stipend if needed to help kind of offset the cost of babysitting for some of those employees in the evening so they could attend those events. Again, not something, something super flashy, it was something that they were able to put in place that really made a difference and help them to attract and retain individuals to that role. So I think adding in a few creative things, whatever that may be, to really just help support. Maybe it’s that tech package for your remote workers to making sure that they know that they’re gonna have access to the equipment that they need and that, you know, maybe it’s a monthly or quarterly stipend to help offset some of those expenses. And just communicate it. And I would say communicate some of that in your job postings as well, so that as you’re thinking about attracting those individuals, they can really, really, again, see the future, what, what is offered by your company.
Jessica Stephenson
Okay. Great. You know, thanks so much for your time today, Megan. I think this has been really enlightening and a great overview of how employers might start to be more intentional about thinking about compensation philosophy. Obviously they know who they can come to for assistance with that, you and your team at NFP and would encourage everyone to take a, take a look and download the 2022 total total rewards tech trends report that we mentioned earlier as well. Any parting words from you, Megan, in terms of general advice to employers as they kind of maybe first embark on that journey? If they maybe don’t have existing pay grades or they’re a startup and they’re just sort of navigating all things HR and talent engagement for the first time?
Megan Nail
Yeah, I would, my biggest advice is to think about what you have in place and then listen to your employees on what would be most beneficial to them. So just thinking about as you’re thinking about your package and what’s working and what’s not working, whether that’s compensation or anything else, just think about what that is. Listen to your employees, get their feedback, and then really make that strategy going forward. We know most employers can’t do everything at once. And there’s always more that employees would would want and look for if they could, but just having that roadmap and that good path of communication, I think is key.
Jessica Stephenson
Absolutely. Couldn’t agree more. Well, thanks so much for your time today, Megan. I really appreciate you coming out for the podcast and we’ll look for more exciting things coming down the pipe for NFP in the future as well.
Megan Nail
Thank you.
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