PayScale Comp Foundation Series: Labor Markets
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This document discusses setting up labor markets for compensation planning and strategy. It defines a labor market as a set of parameters that define where an organization competes for talent, noting that a company's labor market may include different locations, organization types, industries, and organization sizes. The document outlines that determining labor markets involves both science, by analyzing where current employees come from, and art, through considering a company's compensation philosophy, competitiveness goals for different roles, growth outlook, and ability to attract and retain talent. It provides tips for executing a labor market strategy, such as setting no more than 2-3 labor markets per location to avoid overanalysis, paying more where needed but budgeting elsewhere, focusing on role value over individual incumbent
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PayScale Comp Foundation Series: Labor Markets
- 2. www.payscale.com Introduction Rita Patterson Onboarding Team Lead Paige Hanley, CCP Sr. Comp Professional
- 3. www.payscale.com Setting up labor markets for compensation planning and strategy
- 4. www.payscale.com Agenda 1. Basics 2. Science 3. Art 4. Execution 5. Q&A
- 6. www.payscale.com What is a labor market? A set of parameters that define where you compete for talent.
- 7. www.payscale.com Your labor market probably doesn’t look just like your organization. And you may be looking in different Labor Markets for different roles.
- 8. www.payscale.com 40 Million Salary Profiles 250 Compensable Factors 10 Org types 350 Industries 14,000 Positions The World’s Largest Salary Database
- 10. www.payscale.com Compensation: Both Art & Science
- 12. www.payscale.com Who do you compete with for talent? Think about: Where do your employees come from?
- 13. www.payscale.com
- 15. www.payscale.com
- 17. www.payscale.com
- 19. www.payscale.com
- 21. www.payscale.com
- 23. www.payscale.com
- 24. www.payscale.com
- 25. www.payscale.com
- 27. www.payscale.com Your overall philosophy on compensation
- 28. www.payscale.com How competitive do you want to be? Which roles are crucial to your organization’s success?
- 29. www.payscale.com The outlook for growth over the next year and beyond
- 30. www.payscale.com Your company's ability to attract and retain talent
- 32. www.payscale.com Tips & Best Practices • Set no more than 2-3 labor markets per location (otherwise, there can be analysis paralysis) • Paying well doesn’t mean paying more everywhere. Pay more where you need to, budget where you can • Different roles are differently valuable to your org. Don’t set the value of the incumbent, think about the value of the role
- 33. www.payscale.com Tips & Best Practices • Who are the market movers in your area? Who is setting the trends? • It’s okay if you can’t pay what the market mover is paying, but realize what that means to your organization
- 34. www.payscale.com Q & A (we’ll email this out)
Editor's Notes
- Marketing Team Introduce Webinar & Rita & Paige?
- Marketing Team Introduce Webinar & Rita & Paige?
- Paige – big picture of what we’re hear to talk about today; note that there are other ‘reasons’ to set up labor markets, what we are addressing today is setting up lm’s such as recruiting or what-if scenarios but our focus today is setting up lm’s for overall comp planning & strategy
- Rita: Agenda
- Paige – Let’s really break this down to the basic definition
- Paige – What is a labor market? Labor Market is not some nebulus undefinable thing, we can define it – esp. in PayScale Insight you can define the parameters of location, industry, etc. to speak to all the cuts of data
- Paige – not just your org, and not your competitors for business – not necessarily recruiting
- Paige – PayScale is great To get the right pay match for your role, it’s essential that you define which labor market you’re competing in. PayScale has over 40 million profiles, all with multiple data points. Some will be relevant to your role, some won’t – and telling PayScale about your Labor Market lets us know which ones are.
- Paige – in the actual Insight platform, in your Dashboard a market report is a combo of Job & Labor Market, so LM is just as important to define as Job Details
- Paige – So let’s bring this back to the idea of compensation and one of the things we know to be true is that Comp is both an Art & Science, and we’re going help you look at it through both lenses.
- Rita – let’s talk about science!
- Rita: in the PayScale Insight platform, again, we’re asking you to define the parameters of the types of organizations that you compete with for talent – give examples – then we’re actually gonna define that in the platform/tool.
- Rita: For example – here is an example of a set of Labor Markets for a company in the IT Services space, and in this example we’ve set up a number of LM’s for their different office locations, as well as a couple specific segments. PayScale Example: Amazon & Microsoft
- Rita: So it is as easy as one labor market for every branch or office location – not quite, but PayScale Insight enables you to start with location and be strategic about the appropriate competitive set for each location.
- Rita – Location Scope City/Metro - call out, you are able to go beyond Large Metro and scope to specific city and the PayScale Insight platform will know which metropolitan area that city falls in based US Census data – no longer to you have to default to scoping to the nearest metro, we’ll figure it out for you. Another important thing to think about re: location scope is if you typically compete for talent statewide or nationwide – give examples: machine maintenance in Atlanta area, actually had techs living all over GA and working all over GA, decided to price statewide, another good example is traveling sales roles where they are expected to work in multiple geo areas. The thing you should ask yourself when deciding location scope – where do you wan to pay these people?
- Rita: Another way that we can slice the data is by organization type
- Rita: You may think we are talking about industry, but we will get to that in a second, in the the PS IS platform we can drill down a level deeper and specify what type of org – nonprof, priv prac, for prof comp. Another reminder here that what we want to make sure we are defining is the org type that this labor market typically competes with for talent, again, not necessarily your actual org.
- Rita: Now let’s talk about industry
- Rita: PS IS platform has over 300 Industries & sub-industries, and these align to NAICS & SIC A question that comes up often is – how do I know which ind to choose – for example – Software Development vs SaaS or Product Manufacturing vs. Manufacturing – what you’ll want to do is think about bringing it back to where you compete for talent – sometimes the broader option of manufacturing vs. specifically food manufacturing or chemical mfg is n
- Rita: Okay, let’s talk about org size – this is another that we get a lot of questions about.
- Rita: in the PS IS platform, when we are asking you to define org size, we are specifically asking – what is the average size in terms of # of employees in the orgs that you compete with for talent It is gonna show you a handy dandy chart that gives you an idea of how org size impacts pay, specific to the location chosen. We’ve seen typically that org size has a lot of impact on c-level roles & financial roles Paige: climbs up & levels out.
- Rita: Lastly, there are a few additional factors that play in to the science of scoping your labor market in the PS IS platform
- Rita: Those can include Filing Status & Stock Exchange Listing…
- Rita: …which will be optional for all org types – typically you’ll want to get specific with these two factors if you have a very specific type of org that you are trying to mirror your competitive set to – if not, you probably won’t need to get this specific an you can leave these blank.
- Rita: There are some additional dropdowns that are ind spec such as # of beds in hops or hc fac or # of equity partners in a law firm. Again, this is all set up to scope to the parameters of the types of organizations you know you compete with for talent and want to compare for pay!
- Paige: so now that you have a good understanding of the science side of comp, let’s look at the art
- Paige: It’s pretty hard to select a correct labor market until you know you’re overall comp philosophy. What are you trying to achieve? comp philosophy – high level view on aims of org with regard to comp. Maybe you’re trying to meet the market. Maybe you know you have a killer benefits package so you can actually lag the market in base pay. Maybe you want to be a market leader.
- Paige: Once you’ve got you’re philosophy, time to start thinking about strategy – such as lead – how competitive – certain roles? Certain locations with diff comp. set?
- Paige: Also – your strategy is not just what you want to achieve today – but where you want to take comp moving forward Example: startups who can only do xyz now, but need to target for growth
- Paige: Ultimately a good labor market is going to support overall ability to attract & retain talent – which in turn should support your biz goals! Paige – this can seem overwhelmingly, if you need more help – that’s what my team does every day!
- Rita: So, we’ve talked about all the things you should think about with the art & science behind creating labor markets – so the most important question – now what? Let’s do it!
- Rita:
- Paige
- Paige – take it in to Q & A