new england compensation trends & pay practices

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