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As you consider employee raises and prepare your compensation strategy, it's imperative to have reliable, New England-specific data to inform your decisions when building a solid compensation foundation.
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New England Compensation Trends & Pay Practices
Cami DeFoor, CCPManager, East CoastPayScale, Inc.
Karaka LesliePartnership Manager PayScale, Inc.
www.payscale.com
14,000 Positions 3000 Customers 11 Countries
250 Compensable Factors40 Million Salary Profiles
Agenda
o5 Compensation Best Practices & Trends
o Immediate Action
o Special! Trends Data For You
oQ & A
• Surveyed over 4,000 respondents
• Themes:– Financial Performance– Wage Growth– Hiring Practices– Retention Concerns– Managing Increases
• Company size breakdown:– Small: < 100 employees - 45%– Medium: 100 - 1,000 employees - 34%– Large: >1,000 employees – 21%
Source: http://www.payscale.com/hr/compensation-practices-survey
General Market Trends
Source: http://www.payscale.com/hr/compensation-practices-survey
New England vs. National Trends
What is the PayScale Index?• The PayScale Index measures the change in pay of employed workers over time,
and makes predictions about how national wages might change for the next quarter
What specifically does the PayScale Index measure?• The PayScale Index specifically measures the quarterly change in total cash
compensation of full time private industry employees
Five
Compensation
Best Practices
1) Understand Your Labor Market
2) Understand Your Jobs
3) Create a Competitive Strategy
4) Build a Structure
5) Pay for Performance
Understand Your Labor Market
Understand Your Labor Market
•Who do you compete with?
• Size, Location, Revenue, Industry
•Who can you compete with?
Understand Your Labor Market
YOU
THE COMPETITION
Understanding Your Markets
Understand Your Jobs
Understanding Your Jobs•Work Gets More Specialized
•Hot Skills in New England
•Not All Jobs Are Created Equal
•Hot Jobs in New England
Hot Skills in New EnglandTechInformation Technology Infrastructure Library (ITIL)Network Security ManagementStorage Area Networking (SAN)Data Mining/Data WarehousePerlSecurity Intrusion DetectionSoftware Architecture
FinancialCredit ControlCompliance (Financial)Financial ModelingStatistical Analysis
OtherConsulting ManagementPerformance ManagementChange ManagementClinical EducationMedical Credentialing
Without Skill
With Skill
Skills Can Play a Role
Hot Jobs in New EnglandSales/Marketing/OperationsMarketing Director - 8.08%Production Supervisor - 6.90%VP Operations – 5.93%General/Operations Manager – 4.49%
TechSoftware Development Engineer, Test (SDET) – 7.12%Software Developer – 3.74%
Finance/HRHR Manager – 6.22%Financial Controller – 5.42%
OtherRetail Store Manager - 6.86%Attorney/Lawyer – 4.66%Project Engineer – 4.23%Licensed Practical Nurse – 4.00%
“The market” changes for each job
2011 Q1
2011 Q2
2011 Q3
2011 Q4
2012 Q1
2012 Q2
2012 Q3
2012 Q4
2013 Q1
2013 Q2
2013 Q3
90.0
95.0
100.0
105.0
110.0
115.0
Software Developer Median PayAcross Time for New England
Software Developer United States
2011 Q1
2011 Q2
2011 Q3
2011 Q4
2012 Q1
2012 Q2
2012 Q3
2012 Q4
2013 Q1
2013 Q2
2013 Q3
94.0
96.0
98.0
100.0
102.0
104.0
106.0
108.0
110.0
Social Worker Median PayAcross Time for New England
Social Worker United States
Create a Competitive Strategy
Why Have a Comp Strategy?We asked thousands of HR and business leaders* about their top challenges in compensation. They said:
1. Retain. They don’t want to risk losing employees by underpaying them, or losing money by overpaying them
2. Attract. To compete for talent, job offers must match the market and the unique factors driving pay for their jobs.
3. Motivate. Drive performance with strategies that reward top performers while aligning with company goals.
4. Confidence. Having the science to back up decisions and conversations with executives and employees.
Source: http://www.payscale.com/hr/compensation-practices-survey
Competitive Strategy• Understand business goals
• Who is your market?
•How competitive do you want to be?
•What do you want to reward?
Competitive Strategy• Vary strategy by department
• Base your decisions on key roles
Retaining Key Talent
Source: http://www.payscale.com/gen-y-on-the-jobSee methodology: http://www.payscale.com/gen-y-methodology
Build a Structure
Build a Structure• Let the structure guide your business forward
• Keep it current
•Decide what’s important for you
Advantages of Pay Structures
Provide alignment to business strategy
Clarify relative worth of the position internally & externally
Ensure fair pay (legally defensible)
Define a pay range for a position
Create clear career paths
Room to reward your employees based on performance, tenure, etc.
Building a Structure
Source: http://www.payscale.com/hr/compensation-practices-survey
Pay for Performance
Performance
Top people concerns among senior business executives are:oCreating a high-performance culture o Leadership developmentoTalent ManagementoTraining
Market Trend:Ongoing Shift Toward P4P
Source: Hewitt Survey – U.S. Salary Increases 2009/2010 and Impact on Org Spend for 2010
When crafting next years budget vs. this year the use of Across the board increases down by 50%Use of Variable Pay has increased 300%
Merit Matrix
Immediate Action
Elementary• Know your jobs
• Have an understanding of the market
Intermediate• Discuss a compensation strategy with leadership
• Know what you want to reward and what you value
• Build guidelines that reflect a compensation strategy that works for your business
Advanced• Find new and creative ways to incorporate performance pay
• Know how your pay practices stack up against your exact competition for talent
• Communicate you pay strategy with management
• Develop a strong compensation structure
Immediate Action
Sneak Peek!
Source: http://www.payscale.com/hr-value-of-hr-certifications
Sneak Peek!
Source: http://www.payscale.com/hr-value-of-hr-certifications
Special Offer for
New England HR Professionals
PayScale Delivers Where Other Compensation Providers Fall ShortPayScale leads the world in compensation knowledge with the freshest and most detailed data from over 40 million salary profiles. More than 3000 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people.
Visit our blog: www.payscale.com/compensation-todayJoin our Group on LinkedIN: Compensation Today: HR Best Practices
Cami DeFoor, CCPManager, East CoastPayScale, Inc.
Karaka LesliePartnership Manager PayScale, Inc.
www.payscale.com
