Canadian Compensation Trends & Pay Practices


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Many areas across Canada have returned to their patterns of rapid wage growth in recent quarters. Are you on top of the trends?

As you consider employee raises and refine your compensation strategy, it's imperative to have reliable Canada-specific data to inform your decisions when building a solid compensation foundation.

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  • Intro with a little bio on each of usHousekeepingWe will send out the slidesYou are all on mutePlease type in Q&APollsThis is approved for 1 CPD hour toward CHRP recertificationSurvey at the end-helps us understand what interests you most. We are sharing a lot of information with you and if we can provide you with any specific information to your organization, we’d love to
  • Karaka-PayScale is the sponsor of today’s webinar todayCreator of the largest database of individual compensation profiles in the world, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software. PayScale’s products are powered by innovative search and query algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time. Publisher of the quarterly PayScale IndexTM, PayScale's subscription software products for employers include PayScale MarketRateTMand PayScale InsightTM. Among PayScale's 2,500 corporate customers are organizations small and large across industries including Mozilla, Tully’s Coffee, Clemson University and the United States Postal Service.  
  • Karaka
  • KarakaPublished annually. Comes out in MarchHad over 550 respondents particular for Canada and 4,000 total. Across the nation. Talking about macro trends here. 65% expectied performance to improve30% expected performance to stay the sameOnly 5% expected performance to weakenGreat news, domino effect. Organizations expect performance to improve which means we see more hiring
  • KarakaGreat news, domino effect. Organizations expect performance to improve which means we see more hiring and giving raises. 85% of Canadian respondents gave a pay increase in 2012.Companies plan to continue expanding in This year.• Over 50% of organizations expect to increase in size in 2013. In last year’s survey, only 38% saidthey expected their workforce to increase in 2012.Only 5% of small companies, 9% of medium companies and 14% of large companies expect their organization to decrease57% say they will give raises to at leasthalf of their workforce. Huge number. So long wage freezes. If you are in that boat, we want to give you some tips and best practices for how to align your comp strategy and make smart decisions. POLL #1 Have you already given out increases this year?
  • FinnWeave in trends in these areas as we go through
  • Finn
  • Finn-understanding your labor markets where you compete for talent-determining your strategy for how to align yourself to the marketExamples specific to Canada. Alberta, Oil & Gas…SaskatchewanAnother one…. Vancouver…software development
  • Finn-Understand who you are competing for talent withThis will not be the same for all jobsUnderstand what different industries/locations around CA/and companies valueA lot of assumptions that don’t always applyKaraka: In looking at our database, These are the Industries (North American Industrial Classification) that have experienced the highest relative median pay growth in Canada over the past two years.Mining, Quarrying, and Oil and Gas Extraction15.52%Utilities8.87%Agriculture, Forestry, Fishing and Hunting6.28%
  • KarakaWe are now going to transition into talking about understanding your job. Though, we will be discussing labor markets later as well when we dive into strategy.
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  • KarakaNot a surprise to you in HR but it might seem like many managers in your organization think it should be easy to find the people you need. In fact, in the Best Practices Report, 55% of you believe that there is a lack of qualified applicants for your open positions. Lots of talk about the skills gap. Demand for talent is high, especially for highly skilled roles.This is taken from The Conference Board’s Advisory Meeting on Innovation and Competitiveness. Work gets more specialized…starting to see routine and manual tasks decrease and abstract tasks increase. This makes jobs more difficult to price and to understand their value in the market and to an organization. “Just as people in the early days of industrialization saw single jobs (such as a pin maker’s) transformed into many jobs (Adam Smith observed 18 separate steps in a pin factory), we will now see knowledge-worker jobs—salesperson, secretary, engineer—atomize into complex networks of people all over the world performing highly specialized tasks. Even job titles of recent vintage will soon strike us as quaint. “Software developer,” for example, already obscures the reality that often in a software project, different specialists are responsible for design, coding, and testing. And that is the simplest scenario.” The Big Idea: The Age of Hyperspecialization, Harvard Business Review, July 2011
  • Karaka--know the job and the market for those jobs --know what drives pay and what doesn’t-Skills, experience, certifications do matter for certain positionsPurple Squirrel plug
  • Karaka-we asked our team of data scientists to look at our database for skills that are in demand and are causing pay to increase.These are the skills that tend to cause median pay to increase the most in Canada.For those of you that are hiring for positions right now, any of the skills on this list ring a bell? If these skills are in such high demand for your positions, once you find the right candidate with those skills, you don’t want to pass them up. Understanding the value of those skills is important to make the right compensation offer.
  • Finn-Can’t put a finite $$ amount around skills. Must take into account other compensable factors. Some that we just mentioned, re: labor market factors and also the value that this position/employee brings to your organization.
  • KarakaThese are the jobs that have experienced the highest relative median pay growth in the Canada area over the past two years.These positions are Constantly changing These are the type of positions that can significantly impact the business. What if finding that particular developer helps you develop new software that revolutionizes your business. Or, what if you find that sales manager who increases your revenue by 10% or more.Bill Gates is famous for saying that one great programmer is worth a 1,000 average programmers. These are the hot positions we are noting in our database now. From best practices report, 34% of companies responded that they have positions that have been open at their organization for six months or more!
  • Supply and demand for laborKarakaThe market is constantly changing. Important to stay on top of the marketChanges vary for each job
  • KarakaMicro at two different positions.3% doesn’t work.Luckily you don’t have deal in generalities anymore. There are data and tools out there to support you getting a solid understanding on your jobs and helping you be strategic when it comes to compensation.
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  • FinnWhat’s most important is building our a strategy that is right for your company and right for your area*Who is our marketNumbers vary widelyNot always who “you” are—might be a start but think about where you get the people you put into your organization, and who is hiring for those same peopleWhen and where in the organization do we need to choose different labor marketsKnow your competitive market and how you want to position yourself
  • This is what business leaders care about. Don’t just talk about building a structure for your compensation plan. Talk about the strategy first. CRM story-Finn
  • Karaka
  • Finn*Vary the strategy by dept*Talk with Sr. Leadership – Align you compensation strategy with the overall business goals *Base this on the positions that are driving your business forward*Limited budget—need to focus on where we can let go and where we can be restricted*What challenges are you truly trying to solveKnow who you can compete with--- Are we in Alberta, anywhere near Oil Sands? Well we’re competing with Big Oil and Gas companies than. Can we match dollar for dollar? Probably not, but which positions should we try to on. You have to be differentPrioritization 12 names in the drawer
  • Karaka-discuss importance of structureKaraka-trends Over 74% of respondents either have or are working on a formal compensation strategy.• The likelihood of having or working on a formal compensation strategy increases with company size.54% conduct market & compensation analysis in Q4 & Q1—time is now!
  • FinnDon’t risk losing your top performer for internal equityKnow who you can pay less so you can afford to overpay your top employees and crucial rolesAlways keep an eye on the surging market changes.
  • KarakaPOLL #2 How does your organization pay for performance?
  • Karaka-read slide and say…Why? Because of the business need for“a relentless focus on innovation, productivity, growth and customer service.”Reasons:The main reason why most companies adjusted compensationwas “Performance-Based Pay Increases” (42%) and second was“Cost of Living Adjustments” (25%).
  • KarakaWhen crafting next years budget vs. this year the use of Across the board increases down by 50%Use of Variable Pay has increased 300%
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  • Finn & Karaka
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  • Karaka-update with CHRP
  • Karaka-update with CHRP
  • Canadian Compensation Trends & Pay Practices

    1. 1. Canadian Compensation Trends & Pay Practices Finn Andersen Sales Manager PayScale, Inc. Karaka Leslie Partnership Manager PayScale, Inc.
    2. 2. 14,000 Positions 2500 Customers 40 Million Salary Profiles 250 Compensable Factors 11 Countries
    3. 3. Agenda o 5 Compensation Best Practices & Trends o Immediate Action o Special! Trends Data For You oQ & A
    4. 4. • Surveyed over 550 respondents in Canada • Themes: – – – – – Financial Performance Wage Growth Hiring Practices Retention Concerns Managing Increases • Company size breakdown: – Small: < 100 employees - 48% – Medium: 100 - 1,000 employees - 36% – Large: >1,000 employees – 16% 65% of Canadian companies expected their financial performance to improve in 2013
    5. 5. General Market Trends
    6. 6. Five 1) Understand Your Labor Market Compensation 2) Understand Your Jobs Best Practices 3) Create a Competitive Strategy 4) Build a Structure 5) Pay for Performance
    7. 7. Understand Your Labor Market
    8. 8. Understand Your Labor Market • Who do you compete with? • Size, Location, Revenue, Industry • Who can you compete with?
    9. 9. Understand Your Labor Market
    10. 10. Understand Your Jobs
    11. 11. Understanding Your Jobs • Work Gets More Specialized • Hot Skills in Canada • Not All Jobs Are Created Equal • Hot Jobs in Canada
    12. 12. Hot Skills in Canada Tech Other Ruby on Rails Suretrak (Primavera) Software Development Lifecycle Cloud Computing Python Mobile Computing O&G/Engineering Interaction Design Well Production Engineering Six Sigma Green Belt SCADA Oil and Gas Formation Evaluation Chemical Process Engineering Shielded Metal Arc Welding (SMAW) Mergers and Acquisitions Avionics Financial Modeling Material Science Loan Underwriting SAP Enterprise Resource Planning
    13. 13. Skills Can Play a Role With Skill Without Skill
    14. 14. Hot Jobs in Canada Positions with Largest Year over Year Increases Technology Finance/Admin Web Developer - 7.09% Programmer Analyst Accounts Receivable Clerk - 5.38% Administrative Assistant Office Clerk Staff Accountant Receptionist Other Millwright - 4.1% Executive Chef - 4% Insurance Underwriter Retail Store Manager Construction Superintendent Logistics Coordinator Sales/Operations Regional Sales Manager - 5.25% National/Strategic Accounts Manager - 5.08% Quality Assurance Manager - 4.21% Warehouse Manager
    15. 15. Understanding Jobs In Markets
    16. 16. “The market” changes for each job Web Developer Median Pay Across Time for Canada 1.1500 Electrical Engineer Median Pay Across Time for Canada 1.1000 1.0800 1.0600 1.1000 1.0400 1.0200 1.0500 1.0000 0.9800 1.0000 0.9600 0.9400 0.9500 0.9200 0.9000 0.9000 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Web Developer Canada 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Electrical Engineer Canada
    17. 17. Create a Competitive Strategy
    18. 18. Competitive Strategy • Who is your market? • How competitive do you want to be? • What do you want to reward?
    19. 19. 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. *
    20. 20. Competitive Strategy Not all individuals, process, functions and business units have the same impact on results We need to prioritize jobs, key employees and business units and then allocate the greatest portion of its resources to those high priority areas.
    21. 21. Competitive Strategy • Talk with senior leadership • Vary strategy by department • Base your decisions on key roles
    22. 22. Build a Structure
    23. 23. 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.
    24. 24. Build a Structure • Let the structure guide your business forward • Keep it current • Decide what’s important for you
    25. 25. Pay for Performance
    26. 26. Performance Top people concerns among senior business executives are: o Creating a high-performance culture o Leadership development o Talent Management o Training
    27. 27. Market Trend: Ongoing Shift Toward P4P 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% Source: Hewitt Survey – U.S. Salary Increases 2009/2010 and Impact on Org Spend for 2010
    28. 28. Merit Matrix
    29. 29. Immediate Action
    30. 30. 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
    31. 31. CHRP worth more!
    32. 32. Faster Job Progression
    33. 33. Special Offer for Canadian HR Professionals
    34. 34. PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 36 million salary profiles. More than 2500 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: Join our Group on LinkedIN: Compensation Today: HR Best Practices Finn Andersen Sales Manager PayScale, Inc. Karaka Leslie Partnership Manager PayScale, Inc.