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New England Compensation Trends & Pay Practices

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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

  1. 1. New England Compensation Trends & Pay Practices Cami DeFoor, CCP Manager, East Coast PayScale, Inc. Karaka Leslie Partnership Manager PayScale, Inc. www.payscale.com
  2. 2. 14,000 Positions 3000 Customers 11 Countries 40 Million Salary Profiles 250 Compensable Factors
  3. 3. Agenda o 5 Compensation Best Practices & Trends o Immediate Action o Special! Trends Data For You oQ & A
  4. 4. • 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
  5. 5. General Market Trends Source: http://www.payscale.com/hr/compensation-practices-survey
  6. 6. 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
  7. 7. 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
  8. 8. Understand Your Labor Market
  9. 9. Understand Your Labor Market • Who do you compete with? • Size, Location, Revenue, Industry • Who can you compete with?
  10. 10. Understand Your Labor Market YOU THE COMPETITION
  11. 11. Understanding Your Markets
  12. 12. Understand Your Jobs
  13. 13. Understanding Your Jobs • Work Gets More Specialized • Hot Skills in New England • Not All Jobs Are Created Equal • Hot Jobs in New England
  14. 14. Hot Skills in New England Tech Other Information Technology Infrastructure Library (ITIL) Network Security Management Storage Area Networking (SAN) Data Mining/Data Warehouse Perl Security Intrusion Detection Software Architecture Consulting Management Performance Management Change Management Clinical Education Medical Credentialing Financial Credit Control Compliance (Financial) Financial Modeling Statistical Analysis
  15. 15. Skills Can Play a Role Without Skill With Skill
  16. 16. Hot Jobs in New England Sales/Marketing/Operations Other Marketing Director - 8.08% Production Supervisor - 6.90% VP Operations – 5.93% General/Operations Manager – 4.49% Retail Store Manager - 6.86% Attorney/Lawyer – 4.66% Project Engineer – 4.23% Licensed Practical Nurse – 4.00% Tech Software Development Engineer, Test (SDET) – 7.12% Software Developer – 3.74% Finance/HR HR Manager – 6.22% Financial Controller – 5.42%
  17. 17. “The market” changes for each job Software Developer Median Pay Across Time for New England 112.0 Social Worker Median Pay Across Time for New England 110.0 110.0 108.0 108.0 106.0 106.0 104.0 104.0 102.0 102.0 100.0 100.0 98.0 96.0 98.0 94.0 96.0 92.0 90.0 94.0 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Software Developer United States 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Social Worker United States
  18. 18. Create a Competitive Strategy
  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. Source: http://www.payscale.com/hr/compensation-practices-survey
  20. 20. Competitive Strategy • Understand business goals • Who is your market? • How competitive do you want to be? • What do you want to reward?
  21. 21. Competitive Strategy • Vary strategy by department • Base your decisions on key roles
  22. 22. Retaining Key Talent Source: http://www.payscale.com/gen-y-on-the-job See methodology: http://www.payscale.com/gen-y-methodology
  23. 23. Build a Structure
  24. 24. Build a Structure • Let the structure guide your business forward • Keep it current • Decide what’s important for you
  25. 25. 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.
  26. 26. Building a Structure Source: http://www.payscale.com/hr/compensation-practices-survey
  27. 27. Pay for Performance
  28. 28. Performance Top people concerns among senior business executives are: o Creating a high-performance culture o Leadership development o Talent Management o Training
  29. 29. 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
  30. 30. Merit Matrix
  31. 31. Immediate Action
  32. 32. 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
  33. 33. Sneak Peek! Source: http://www.payscale.com/hr-value-of-hr-certifications
  34. 34. Sneak Peek! Source: http://www.payscale.com/hr-value-of-hr-certifications
  35. 35. Special Offer for New England HR Professionals
  36. 36. PayScale Delivers Where Other Compensation Providers Fall Short PayScale 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-today Join our Group on LinkedIN: Compensation Today: HR Best Practices Cami DeFoor, CCP Manager, East Coast PayScale, Inc. Karaka Leslie Partnership Manager PayScale, Inc. www.payscale.com

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