Betsy Irizarry - The Compensation Risk Most Companies Don't Measure

In this episode of HR Data Labs Podcast, host David Turetsky is joined by Betsy Irizarry, CEO and founder of HR Contempo, to unpack one of the most overlooked compensation risks in modern organizations: pay compression. They also discuss how AI, labor market pressure, mergers and acquisitions, and communication gaps are reshaping workforce strategy and employee trust. Betsy brings 25-plus years of HR experience across industries including technology, professional services, agriculture, and energy, making this a practical conversation about what leaders are missing and what they need to do next.  Key topics  Betsy Irizarry shares how HR Contempo helps organizations with human capital issues, especially mergers and acquisitions and compensation work.  Pay compression is becoming more common as companies raise pay to compete for new hires while leaving long-tenured employees behind.  Labor market pressure is intensifying the problem, especially in skilled trades like plumbing and electrical work tied to data centers and other growth sectors.  David and Betsy connect today’s compensation challenges to pandemic-era pay decisions that created long-term ripple effects.  Mergers and acquisitions often focus on financial and operational integration while overlooking compensation structure and job analysis.  Simply matching job titles is not enough in M&A work because the actual work, scope, and responsibilities may be very different.  AI is creating a new kind of compensation pressure as companies pay more for employees who can use AI tools to generate insights and move faster.  Betsy argues that organizations must balance AI adoption with institutional knowledge, since experienced employees still bring critical context.  Workforce readiness for AI is uneven, so organizations need to assess who can reskill and who may struggle to adapt.  Total rewards matters more than base pay alone, including benefits, 401(k), employee assistance programs, development, and other perquisites.  Communication is a major theme throughout the conversation, especially around pay transparency, manager training, and helping employees understand total compensation.  The episode closes on the idea that compensation conversations should become more open, business-oriented, and positive.  Timestamps  00:00 - Welcome to HR Data Labs Podcast and introduction to Betsy Irizarry 01:07 - Betsy’s background and HR Contempo’s focus on human capital and M&A 02:14 - Betsy’s travel habit of studying how businesses operate in different places 04:22 - Episode topic: pay compression and AI reshaping workforce strategy 05:30 - The most common compensation challenge Betsy sees across clients 06:42 - How pandemic-era pay decisions still affect compensation today 07:19 - Labor market pressure and why skilled trades are at risk of compression 08:49 - Solar and IT examples of demand spikes driving wage pressure 10:02 - Why M&A can create major pay compression if compensation is ignored 11:06 - Job description management and why titles alone do not tell the full story 12:35 - AI skills becoming a premium and the risk of losing institutional knowledge 13:37 - Should companies hire AI talent or reskill current employees? 15:23 - Why outcome-based AI use matters more than activity metrics 16:50 - Walmart self-checkout as a cautionary tale about automation and human oversight 18:49 - HR’s role as the sounding board for leaders on cost-cutting and people strategy 20:07 - What pay compression means, with a practical salary example 21:50 - Ways to address compression without giving everyone the same raise 23:27 - Why total rewards is broader than base pay and benefits 24:04 - Differences between companies with strong total compensation packages and those without 25:36 - The need to overcommunicate total rewards through statements and ongoing manager conversations 26:50 - Why merit review should include the full compensation picture 27:48 - Does pay transparency actually improve equity? 29:33 - Training managers and employees to have business-oriented pay conversations 31:04 - AI makes pay and company information easier to find, increasing the need for honest communication 32:18 - HR’s responsibility to advise leaders and support employees’ basic need to be paid fairly  Notable quotes  “AI won't replace you. Someone who understands AI and uses it as a tool will replace you if you don't.”  “At the end of the day, they just want to get paid so that they can go back home and have a good life.”  “Let's have continue to have conversation, meaningful conversations with our leaders and our employees.”