Harnessing Market Forces for Swift Wins in Compensation with SentinelOne's Tristan Orford

Your next best compensation plan is closer than you think.

With external pressures like pay transparency demands and a tight labor market, compensation and recruiting teams need quick wins.

Total rewards leader Tristan Orford holds a unique POV, having spent years leading enterprise compensation at SentinelOne and Electronic Arts (EA). His take? Companies can leverage pay pressure to evolve programs and uncover the best (and most underused) parts of their rewards offerings.

Compa’s CEO Charlie Franklin and guest Tristan Orford recently sat down to discuss how companies can leverage pay pressure to improve compensation programs, connect with employees, and uncover the best (and most underused) parts of their rewards programs.

Recap our summary and full transcript below, or jump back into the recording here.

On market volatility’s impact on compensation leaders

Market volatility is forcing compensation professionals to think more creatively, especially the last few years. This also presents an opportunity to add value, both to the organizations they work for and the people they support, while also enhancing their own careers and capabilities. Specific issues include:

• Pressure and disruption on the cost profile: Market forces, such as inflation, have significantly impacted pay and benefits programs over the last few years, with emerging effects on benefit programs as well. Managing cost profiles has become a major challenge.
• Constraints on cost and talent supply: Organizations are facing cost constraints while simultaneously dealing with a shortage of talent in the labor supply. This unusual combination requires innovative solutions.
• Heightened economic volatility and uncertainty: There is an increase in economic volatility and uncertainty, fueled by geopolitical conflicts and other factors, unlike anything seen in recent decades.
• Regulatory pressure and changes: There are constant cycles of regulatory changes that need to be navigated.

On critical thinking and decision making

Tristan emphasized that compensation professionals have a unique opportunity right now to add significant value. While he believes it's nice to introduce new initiatives, the real value lies in making hard choices. The key is to critically assess all investments, whether in time or money, and ensure the best return on them. 

On market forces affecting the company culture 

The interaction between HR teams and managers is crucial in shaping the outcome. It can either bring people together or create divisions and distractions. Tristan encouraged HR professionals to take an active role and capitalize on this dynamic time to make a positive impact. Not all efforts will succeed, but HR professionals can contribute to moving the organizational agenda forward and making the company more successful than it would have been otherwise. 

Examples of new strategies

Tristan suggested putting all programs on the table and understanding their costs, utilization, and impact. There is currently significant "air cover" to make tough decisions due to macro pressures, making it a good time to optimize programs. Taking away programs, though challenging, can be more feasible now with clear reasons for redeploying funds. He also emphasized the importance of pay disclosures and pay equity. Communication and change management are crucial, and it is essential to focus on doing the right thing to set the organization and oneself up for success. 

On conjoint analysis

Conjoint analysis, typically offered by consulting firms, is a valuable tool for optimizing compensation programs. It involves presenting employees with different combinations of benefits and asking them to choose between them. This approach helps reveal employees' true preferences, as it avoids the bias that may arise when they are asked about individual benefits separately. The analysis considers both the programs offered and their associated costs, enabling organizations to assess the value of their rewards. The process begins by feeding data on existing programs and their cost profiles into the algorithm. Employees are then presented with choices that reflect trade-offs between different benefits. The software tools manage these choices, and the analysis results in an ROI report, which quantifies the level of engagement generated per dollar spent on various programs.

On being proactive with education

Tristan recommended assessing employees' understanding and familiarity with various programs and their perspective on the value of those programs. Often, employees may not be aware of certain programs or might not fully understand how they work. It's crucial to gather insights into both awareness and comprehension, as it can influence decision-making regarding program management and trade-offs. By identifying areas where employees lack awareness or understanding, HR professionals can take the opportunity to provide more education and improve program effectiveness over time. This proactive approach can lead to better utilization and appreciation of the benefits offered by the organization.

On understanding full compensation

Tristan highlighted the importance of considering below-the-line costs, such as benefits, employee engagement programs, and workplace overheads, in compensation analysis. He noted that many organizations may not have specific information on these costs readily available. Understanding these costs and internal data can help HR professionals make informed decisions and optimize compensation without requiring extensive statistical exercises. By analyzing the inventory of programs and their associated costs, HR teams can identify areas for improvement and better manage total compensation expenses.

On compensation prominence

In challenging times, the compensation team gains prominence and influence, making C-suite level decisions. However, it's essential not to abuse this position but rather be a great partner and maintain a holistic view of the talent strategy. Collaborate with other HR functions to ensure a comprehensive approach to compensation and talent management. Avoid short-term thinking and focus on the long game to support the company's growth and success beyond the current downturn. Pay attention to shifts in the talent strategy and remember that it's not just about cost-saving; it's about positioning the company for success in the future.

On pay equity in a turbulent market

Tristan emphasized the significance of job architectures as a fundamental aspect of HR work, particularly amid the current market volatility. He highlighted the importance of operating within a dynamic structure that reflects the evolving nature of organizations and functions. Job architectures serve as a critical baseline for managing pay equity and creating an effective and equitable organization. By ensuring a solid job architecture and making appropriate investments in policies and governance, organizations can be better prepared to address pay disclosures and pay equity concerns. 

Pay equity is crucial and involves effective communication and building trust to demonstrate fairness across the workforce. It extends beyond addressing gender pay gaps to encompass broader aspects of compensation, especially in a volatile market where stock fluctuations can impact employee satisfaction. Communication should highlight the long-term nature of stock compensation and its at-risk nature while aligning it with company values. Understanding compensation programs, marketing them, and fostering better comprehension of individual pay decisions are vital in navigating compensation challenges amidst market volatility. Proper data management is also essential in this process.

On the importance of accurate data

In volatile markets, the significance of precise and accurate market data increases. Having a strong grasp of internal data becomes crucial, as compensation decisions are scrutinized closely by leaders and the compensation committee. To ensure credible data for decision-making during a downturn, focus on obtaining both great market data and a comprehensive understanding of internal metrics. This data-driven approach becomes the scientific side of the job, supporting the compensation team's ability to make well-founded scaling decisions. When making decisions related to compensation or evaluating a company's value, triangulation is essential. Relying solely on one data source may lead to incomplete or inaccurate conclusions. It's crucial to be smart about data collection and utilize various sources to validate hypotheses and make informed decisions.

On perfection as the enemy of good

Tristan emphasized the importance of striking a balance between perfectionism and progress in compensation management. He recognizes that in the field of compensation, sensitive topics and the desire for polished outcomes can sometimes hinder the ability to adapt quickly to market pressures and changes in the workforce. He also acknowledged that compensation professionals may come from backgrounds where precision and attention to detail are highly valued, such as the consulting world. To effectively navigate these changes, Tristan encouraged compensation teams to focus on their core mission of solving business problems. This involves not only analyzing data and numbers but also understanding the broader context of the organization and its goals. 

About Tristan Orford

Tristan is VP of compensation and M&A at SentinelOne, a leading cybersecurity company based in Mountain View, California. He joined SentinelOne in 2022. Prior to that he led executive and broad based compensation at Electronic Arts. And before that he led the global compensation team at Riot Games, building programs and practices during a period of very substantial business and headcount growth for that company. Tristan began his career in finance, working in investment banking and private equity before making the transition to our world and compensation. Tristan grew up near Portland, Oregon, and received his degree in International Political Economy, sigma cum laude from University of Puget Sound. And he holds both the CCP and GRP certifications from World at Work.

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