compensation and planning for the future
DESCRIPTION
TLNT Webinar from 8/18/11, presented by Ann Bares, Jim Brennan and Laura Schroeder.TRANSCRIPT
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Compensation and Planning for the Future
Presented by:
Ann Bares E. James (Jim) Brennan
Laura Schroeder
August 18, 2011
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Today’s Presenters
Ann Bares Managing Partner, Altura Consulting Group Compensation Café Founder & Editor
E. James (Jim) Brennan Senior Associate, ERI Economic Research Compensation Café Contributor
Laura Schroeder Global Talent Specialist, Workday Compensation Café Contributor
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The Story Research Tells Us
Ann Bares Managing Partner, Altura Consulting Group
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2012 Salary Increase Budgets Employee Group WorldatWork Hay Group ERI
Hourly Nonexempt 2.9%
3.0% 2.6%
Salaried Nonexempt 2.9%
3.0% 2.8%
Salaried Exempt 2.9%
3.0% 2.9%
Officers/Executives 2.9%
3.0% 3.0%
Steady as She Goes… Sources: WorldatWork 2011/2012 Salary Increase Budget Survey, Hay Group’s U.S. Database (7/11 Press Release), ERI 2012 Salary Increase Survey
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2012 Salary Structure Adjustments
Employee Group WorldatWork Hay Group ERI
Hourly Nonexempt 1.9%
-- 1.4%
Salaried Nonexempt 1.9%
-- 1.5%
Salaried Exempt 1.9%
-- 1.6%
Officers/Executives 2.9%
-- 1.7%
…Playing a Little Catch-Up? Sources: WorldatWork 2011/2012 Salary Increase Budget Survey, Hay Group’s U.S. Database (7/11 Press Release), ERI 2012 Salary Increase Survey
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Another More Chaotic Reality
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The General Salary Program Picture
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2006 2007 2008 2009 2010 2011 2012
Salary increases Structure adjustments
Sources: WorldatWork 2011/2012 Salary Increase Budget Survey
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Put in Larger Economic Context
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2006 2007 2008 2009 2010 2011 2012
Salary increases Structure adjustments CPI Unemployment
Sources: WorldatWork 2011/2012 Salary Increase Budget Survey
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With an Interesting Twist
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The State of Variable Pay
2006 2007 2008 2009 2010 2011
% of organizations using variable pay
79% 80% 81% 80% 80% 79%
The percent of organizations using variable pay hovering
around 80%
Sources: WorldatWork 2011/2012 Salary Increase Budget Survey
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Most Popular Programs/Practices
Program 2009 2010 2011
Employee referral bonus 66% 55% 62%
Sign-on/hiring bonus 64% 50% 62%
Market adjustments to base salary 37% 35% 60%
Program 2009 2010 2011
Spot bonus 39% 36% 48%
Non-cash recognition -- 38% 41%
Top Three
Next Two
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Making Compensation Planning Dynamic
E. James (Jim) Brennan Senior Associate ERI Economic Research
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Budgeting Principles
• Fixed budget = guaranteed expense • Human enterprises, dynamic treatments
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P P P P P P
1. Anticipate your market situation 2. Target Midpoints or Job Values
• study your market ratios • analyze your compa-ratios • define your closure needs
3. Plan action steps to • minimize residual risk exposures • remedy shortfalls over time • protect key talent
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Timing of Increases
• Simultaneous (Focal) • Variable (Anniversary)
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Expect Variations
• Prepare A B C budgets • Randomness is lumpy • Human reality is rarely neat, smooth or
symmetrical • Ready, aim, fire, score, adjust, repeat
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Compensation 2.0 Five Trends That Will Change
How We Think About Compensation
Laura Schroeder Global Talent Specialist Workday
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5 Trends in Compensation
1. Evolving Role of Salary Surveys 2. A New Kind of Workforce 3. Flexible Compensation 4. New Business Priorities 5. Growing Demand for Transparency
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Evolving Role of Salary Surveys
• Hard to get reliable non-US information • Jobs are evolving – new jobs, ‘hybrid’ jobs • Growing emphasis on total rewards
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A New Kind of Workforce
• Global, contingent, multi-generational, flexible, virtual
• Different locations, priorities, work styles • Growing demand for cost and performance
analysis
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Flexible Compensation
• Compensation should support your strategic workforce goals
• Your compensation processes should be as dynamic as your workforce
• Once a year performance and compensation review may not cut it
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New Business Priorities
• Business priorities that shaped current compensation have changed
• It’s a good time to analyze whether business priorities match what is actually rewarded
• Everyone should have an incentive to perform as an individual as well a stake in overall company performance
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Growing Demand for Transparency
• Clear communication – and a bit of positive spin – can make the difference between resentment and gratitude
• Be honest about your total rewards offering • Total rewards statement to showcase your
real investment in people
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Questions and (Hopefully)
Answers