Nakia McKenzie, VP of compensation and benefits at AARP, knows her company has one perk she thinks puts it in a particularly attractive light: It’s one of the few organizations to still offer a pension.
In 2019, just 14% of Fortune 500 companies offered a defined benefit plan (like a pension) to new hires, according to Willis Towers Watson. That’s down from 59% among the same group of employers back in 1998. Last year, just a quarter of civilian workers were offered a traditional pension plan, according to the Bureau of Labor Statistics. AARP is one of them, which McKenzie said doesn’t instantly strike Gen Zers as very important.
“But,” she said Wednesday during a panel at Fortune’s Most Powerful Women Next Gen conference in San Diego, “if our recruiters tell them it’s free money, that might motivate them to come work with us.”
Recruiting young people is a skill in and of itself, she said. “Remote work, for one thing, is an expectation,” she said. “But they really want to know what they’re going to be working on, who they’ll be working with, and how they’ll be able to contribute.”
AARP’s recruiters don’t expect Gen Z hires to stay around for long. “They expect them to come in, make their contribution, then leave,” she said. “We talk about working on retaining people, but we’re not talking enough with our managers about people coming in and potentially going back out. We have a lot of boomerang employees at AARP.”
All told, today’s hires just want to know what they can expect to do on a daily basis—alongside their base pay, which they still believe is most important.
That’s just one of the many ways McKenzie insists upon equality. Before any manager is allowed to make a job posting, they must agree with her on what level of experience they’re looking for—this determines the salary range the recruiter will use. “They can’t say they’re looking for someone with zero to 15 years of experience,” she said. “They need to hone in on the qualifications they’re looking for, and we’ll tell them where in the range, equity-wise, they’ll be.”
That’s why AARP has such a small range of job postings, she said. “We make people take postings down and start over if they don’t stick with what they asked for; it seems rigid, but it’s also fair.”
That’s where equal pay comes in. McKenzie knows how important pay transparency is. And as salary transparency laws go into effect in state after state, time is running out for companies who refuse to modernize.
“Pay transparency really starts with wanting to achieve equity,” McKenzie said. “But you can’t be transparent if your processes are based on people, because that leaves a lot of room for subjectivity.”
The long road to equality
AARP’s journey towards total pay equity has been McKenzie’s purview since she joined the vast nonprofit nearly five years ago.
“I realized it would be really impossible to be transparent, because you could see our structure was based on relationships, tenure, and who you knew—not based on the work being performed,” she said.
To fix that, over the past three years, she said the company has spent “a tremendous amount of time” standardizing each of its jobs, reducing the number of people doing the same work under different titles—and thereby reducing the odds that someone might be getting short-changed. Since 2020, AARP has gone from having 1,300 individual jobs for its 2,000 employees down to just 500.
AARP also now decides early on how much it’s willing to pay for a given job, and it’s currently 92% compliant with staying in its range, McKenzie said. “It can be hard because people are driven by money, and we have to go outside the box sometimes, because we’re a nonprofit,” she explained.
Despite the immense amount of work McKenzie and her team has done to make AARP more fair, she tries not to talk about money, especially with Gen Z candidates too soon—even if they’re going to like what they hear.
“Some people don’t want to share pay details until after they’ve had a conversation with a candidate, so they know what motivates that candidate,” she said. “Then they can talk about total compensation, and what other things the organization offers that might make them want to come.”
