The	  Widening	  Skills	  Gap	  	  and	  its	  	  Connec5on	  to	  Compensa5on	  Mykkah	  Herner,	  MA,	  CCP	  Senior	  C...	  14,000	  Posi5ons	  2500	  Customers	  36	  Million	  Salary	  Profiles	  250	  Compensable	  Factors	  ...	  AGENDA	  o  What	  is	  the	  Skills	  Gap?	  o  Defini5on	  o  Who	  it	  Impacts	  o  What	  it	  Cost...	  What	  is	  	  The	  Skills	  Gap?	  Skills	  Gap	  Defined	  	  Simply	  put…	  	  “job	  applicants	  don’t	  have	  the	  right	  skills	 ...	  Prevalence	  of	  the	  Skills	  Gap	  “67%	  of	  companies	  are	  having	  a	  hard	  5me	  filling	 ...	  Effect	  of	  Skills	  Gap	  Who	  it	  Impacts	  (Industry	  &	  Org	  Size)	  o  Industries:	  o  Mining,	  Oil	  &	  Gas	  Explor...	  Who	  it	  Impacts	  (Jobs)	  Depends	  on	  Org	  Size	  	  Other	  Includes:	  	  •  STEM	  Jobs	  • ...	  Costs	  of	  the	  Skills	  Gap	  o  Turnover	  o  Over5me	  o  Employee	  pay	  for	  “skilled”	  posi...	  Is	  it	  a	  Myth?	  The	  opposi5on	  says…	  “The	  ‘skills	  gap’	  myth	  plays	  a	  vital	  role...	  Bridging	  the	  Gap	  Iden5fying	  Skilled	  Talent?	  Finding…	  o  Skilled	  foreign	  workers	  o  Schools	  with	  the	  ...	  Retaining	  Skilled	  Talent	  Complexity	  of	  the	  mix…	  Company	  Culture	  Base	  Pay	  Structur...	  Base	  Pay	  Strategy	  o  Define	  labor	  market	  o  Know	  market	  value	  for	  cri5cal	  posi5ons...	  Variable	  &	  Incen5ve	  Pay	  Strategy	  o  Keep	  it	  simple	  o  Reward	  the	  right	  behaviors	...	  Comp	  Philosophies	  Compensa)on	  Philosophy	  –	  Be	  Flexible	  o  Uncertainty	  of	  “post”	  Gre...	  Notes	  on	  Millennials	  o  Transparency	  and	  communica5on	  o  Reward	  and	  recogni5on	  o  Eng...	  Cri5cal	  Ac5on	  Steps	  	  •  Benchmark	  cri-cal	  jobs	  –	  know	  their	  worth	  •  Consider	  s...
PayScale	  Delivers	  Where	  Other	  Compensa5on	  Providers	  Fall	  Short	  	  Connect	  with	  PayScale:	  Visit	  our...
Upcoming SlideShare
Loading in …5

The Widening Skills Gap and its Link to Compensation


Published on

Published in: Business, Technology

The Widening Skills Gap and its Link to Compensation

  1. 1. The  Widening  Skills  Gap    and  its    Connec5on  to  Compensa5on  Mykkah  Herner,  MA,  CCP  Senior  Compensa-on  Consultant,    PayScale,  Inc.  
  2. 2.  14,000  Posi5ons  2500  Customers  36  Million  Salary  Profiles  250  Compensable  Factors  11  Countries  
  3. 3.  AGENDA  o  What  is  the  Skills  Gap?  o  Defini5on  o  Who  it  Impacts  o  What  it  Costs  o  Bridging  the  Gap  o  Iden5fying  Skilled  Talent  o  Retaining  Skilled  Talent  o  Comp  Philosophies  o  Notes  on  Millennials  o  Cri5cal  Ac5on  Steps  
  4. 4.  What  is    The  Skills  Gap?  
  5. 5.  Skills  Gap  Defined    Simply  put…    “job  applicants  don’t  have  the  right  skills  for  the  job”      -­‐  Kathy  Robertson,  Sacramento  Business  Journal  
  6. 6.  Prevalence  of  the  Skills  Gap  “67%  of  companies  are  having  a  hard  5me  filling  skilled  job  posi5ons  with  61%  of  those  saying  the  reason  is  a  lack  of  qualified  job  applicants.  Though  unemployment  is  s5ll  high,  the  reported  skills  gap  shows  us  that  there  are  many  job  categories  in  high  demand.”      -­‐  PayScale’s  2013  Compensa5on  Best  Prac5ces  Report  
  7. 7.  Effect  of  Skills  Gap  
  8. 8.  Who  it  Impacts  (Industry  &  Org  Size)  o  Industries:  o  Mining,  Oil  &  Gas  Explora5on  o  Construc5on  o  Informa5on,  Media  &  Telecommunica5ons  o  Manufacturing  o  Organiza5onal  Size  o  Small  o  Medium  o  Large  
  9. 9.  Who  it  Impacts  (Jobs)  Depends  on  Org  Size    Other  Includes:    •  STEM  Jobs  •  Finance  •  Medical  Specialists  •  Maintenance  •  Machinists  •  Truck  Drivers    
  10. 10.  Costs  of  the  Skills  Gap  o  Turnover  o  Over5me  o  Employee  pay  for  “skilled”  posi5ons  o  Produc5vity  o  Employee  morale  
  11. 11.  Is  it  a  Myth?  The  opposi5on  says…  “The  ‘skills  gap’  myth  plays  a  vital  role  in  taking  the  spotlight  off  corporate  decisions  and  pro-­‐corporate  government  policies”      -­‐  Roger  Bybee,  “The  ‘skills  gap’  myth”  
  12. 12.  Bridging  the  Gap  
  13. 13.  Iden5fying  Skilled  Talent?  Finding…  o  Skilled  foreign  workers  o  Schools  with  the  ‘right’  programs  o  Other  companies  Airac5ng…  o  Right-­‐sized  total  compensa5on  packages  Cul5va5ng…  o  Succession  planning  o  Educa5ng  exis5ng  workforce  
  14. 14.  Retaining  Skilled  Talent  Complexity  of  the  mix…  Company  Culture  Base  Pay  Structure  Variable  or  Incen-ve  Pay  Structure  Individualized  Rewards  &  Recogni-on  
  15. 15.  Base  Pay  Strategy  o  Define  labor  market  o  Know  market  value  for  cri5cal  posi5ons  o  Manage  fixed  costs  o  Pay  for  performance  o  Target  hot  skills  jobs  higher  o  Pay  structure  right-­‐sized  for  organiza5on  
  16. 16.  Variable  &  Incen5ve  Pay  Strategy  o  Keep  it  simple  o  Reward  the  right  behaviors  o  Align  to  organiza5onal  goals  o  Leverage  variable  costs  
  17. 17.  Comp  Philosophies  Compensa)on  Philosophy  –  Be  Flexible  o  Uncertainty  of  “post”  Great  Recession  o  Impacts  of  the  Affordable  Care  Act  Company  Philosophy  –  Be  Fearless  o  Take  chances  on  exis5ng  staff  o  Consider  what  is  “overqualified”  and  “unskilled”  
  18. 18.  Notes  on  Millennials  o  Transparency  and  communica5on  o  Reward  and  recogni5on  o  Engagement  –  to  the  extremes  
  19. 19.  Cri5cal  Ac5on  Steps    •  Benchmark  cri-cal  jobs  –  know  their  worth  •  Consider  strategy  –  are  you  willing  to  target  higher  for  hot  skills?  •  Examine  total  compensa-on  package  •  Develop  marke-ng  around  company  culture  •  Iden-fy  missing  skills  in  the  organiza-on  •  Iden-fy  exis-ng  or  poten-al  internal  talent  •  Develop  a  talent  pipeline  •  Calculate  the  cost  of  con-nued  empty  roles  •  Ask  yourself  if  the  skills  gap  in  your  organiza-on  is  real  or  imagined  
  20. 20. PayScale  Delivers  Where  Other  Compensa5on  Providers  Fall  Short    Connect  with  PayScale:  Visit  our  blog:­‐today  Join  our  Group  on  Linkedin:    Compensa-on  Today:    HR  Best  Prac-ces  Get  the  2013  Comp  Best  Prac5ces  Report:    hTp://­‐compensa-on-­‐prac-ces-­‐report.html  Mykkah  Herner,  MA,  CCP  Senior  Compensa-on  Consultant,    PayScale,  Inc.