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Webinar-The Total Economic Impact of PayScale

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Compensation management is more than just pay roll distribution. And if you’re in the trenches, you know your impact is bigger than a simple 3% adjustment to the salary budget. But how do you measure it? To help businesses realize the full impact of better compensation management, PayScale commissioned Forrester Consulting, an independent research firm, to conduct a study of real customers evaluating the total economic impact of PayScale.

Join Tim Low, SVP of Marketing at PayScale, and guest speaker Sean Owens, Principal Consultant, Forrester, as we dive into the analysis of how PayScale is delivering 249% ROI to its customers!

In this webinar, you’ll learn:

The state of labor and its impact on comp management
-The Total Economic Impact Study methodology
-The link between comp and retention
-How PayScale is delivering 249% ROI to its customers

Featuring insights from The Total Economic Impact Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform.

Published in: Recruiting & HR
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Webinar-The Total Economic Impact of PayScale

  1. 1. The Total Economic Impact of PayScale Guest speaker: Sean Owens Principal Consultant, Forrester Tim Low Sr. Vice President, PayScale
  2. 2. Tim Low, Sr. Vice President, PayScale Tim joined PayScale in 2011 to bring his experience in demand generation, product marketing, branding and go-to-market to the company’s business products. Tim’s resume includes deep expertise in both enterprise software and cloud-based applications. He has held executive positions at Daptiv and at Niku (where he was part of the team that led the IPO), and product management roles at both Microsoft and Oracle. Tim was a founder of social analytics platform NorthbyNine and is a graduate of Marquette University.
  3. 3. We help employers and employees understand the right pay for every position and effectively communicate about compensation.
  4. 4. © 2017 FORRESTER. REPRODUCTION PROHIBITED.
  5. 5. 5© 2017 FORRESTER. REPRODUCTION PROHIBITED. Sean Owens Sean and the Forrester TEI team have worked on projects with a variety of clients: • PayScale • eBay • BAE • Microsoft • IBM • Dell • Oracle • And many others Sean has spent the last fifteen years helping technology vendors measure and communicate the business impact of its solution to their customers. IT strategy and planning executives, sales representatives, and product marketing professionals can use these materials to help understand the solution more completely, and better estimate the costs and business impact for their organization. Sean has been with the Forrester TEI team for more than four years. Previous Work Experience Before joining Forrester, Sean spent more than a decade as a partner, consultant and business development lead for business value consulting practices at several firms. Education Sean has a bachelor’s degree in English from Seattle Pacific University, and an MBA from the University of Washington. Principal Consultant, Total Economic Impact Practice
  6. 6. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. 6© 2017 FORRESTER. REPRODUCTION PROHIBITED.
  7. 7. © 2017 FORRESTER. REPRODUCTION PROHIBITED. The TEI of the PayScale Compensation Intelligence Platform Sean Owens, Principal Consultant September 1, 2017
  8. 8. 8© 2017 FORRESTER. REPRODUCTION PROHIBITED. Compensation impacts recruiting and maintaining employees Unfair compensation (whether perceived or real) has led to some employees deciding to leave the company Too many employees are not paid at compensation goals (many organizations have a 50th percentile goal) Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017 The answer to resolving these issues is not just paying people more!
  9. 9. 9© 2017 FORRESTER. REPRODUCTION PROHIBITED. Engaged Employees May Not Be Valued › Engaged Employees: • Enthusiastic about work • See meaning in work, personally and organizationally • Willing to devote extra time to help customers. Engaged Employees Stay Longer And Become Advocates of the Company And Its Products Engaged employee definition source: David Ning’s The Employee Engagement Network (http://employeeengagement.ning.com/) Chart and quote source: 7,228 global information workers. Claire Schooley, “Use Digital Technologies To Improve Employee Engagement,” April 19, 2016 (https://www.forrester.com/report/Use+Digital+Technologies+To+Improve+Employee+Engagement/-/E-RES82061) “Employee engagement is a measurable workforce characteristic that remains at low levels globally. Increasing the level of employee engagement drives higher levels of customer satisfaction and reduces employee turnover”
  10. 10. 10© 2017 FORRESTER. REPRODUCTION PROHIBITED. Employee Comp Not Tied To Customer Metrics › Many employees work face to face with customers › Quality work related to service - and engagement! › But not usually part of compensation package Most Employees And Managers Don’t Have Any Part Of Their Compensation Tied to Customer Metrics Source: 212 US CX Professionals. Rick Parrish “Talent Management For The Customer-Obsessed Organization,” July 20, 2016 (https://www.forrester.com/report/Talent+Management+For+The+CustomerObsessed+Organization/-/E-RES130905) “Customer-obsessed businesses have lower-than- average turnover.”
  11. 11. 11© 2017 FORRESTER. REPRODUCTION PROHIBITED. Each salary review took one hour. Position compensation was not consistent – a lot of people were being paid at less than 25% of the market “It was more of manager gut feel. They would just ask the person what their previous salary was and try to get them more than that” The organization estimated that it had to recruit and hire (and incur costs for recruiting and hiring) 50 people each year that wouldn’t have left if they had fairer compensation. Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017
  12. 12. 12© 2017 FORRESTER. REPRODUCTION PROHIBITED. Case Study: TEI of PayScale
  13. 13. 13© 2017 FORRESTER. REPRODUCTION PROHIBITED. About TEI The TEI Framework Total Economic Impact Approach and Methodology Perform due diligence Conduct customer interviews Construct financial model Write case study Benefits Costs Flexibility Total Economic ImpactTM (TEI) R i s k Build composite
  14. 14. 14© 2017 FORRESTER. REPRODUCTION PROHIBITED. Overview 4,000 Employees 1,000 Job titles Annual review cycles 10 Salary surveys managed 25% Turnover Goal: Improve Talent Make compensation more standard, fair and transparent Bring in good talent and keep what they have Implementation Using both PayScale and MarketPay Goal of 50th percentile Quick implementation Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017 The Organization
  15. 15. 15© 2017 FORRESTER. REPRODUCTION PROHIBITED. Each salary review now takes just 10 minutes, instead of 1 hour. “The biggest business operations benefit that I’ve seen is the consistency in benchmarking positions” Salaries are now set to the right amount – benchmarked based on metrics collected and adjusted taking into account position, tasks, location, and more. The organization has estimated that it avoids recruiting and hiring costs for 50 people each year. Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017
  16. 16. 16© 2017 FORRESTER. REPRODUCTION PROHIBITED. Avoided recruiting and hiring costs Reduced turnover leads to avoided costs Other benefits Reduced survey mgmt. time, reduced ad-hoc reviews and time, and avoided compensation team hires • $2.1 Million, 3-year PV • From 25% to 20% Reduction in turnover • $180,200 3-year PV • 1 FTE Avoided hiring 1 FTE for the compensation team because of the efficiencies provided with PayScale and MarketPay Study Overview Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017
  17. 17. 17© 2017 FORRESTER. REPRODUCTION PROHIBITED. Total Economic Impact of PayScale Results Metric Result ROI 249% Benefits PV $2.3 million NPV $1.6 million Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017 ($500,000) $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 Initial Year 1 Year 2 Year 3 Cashflows Financial Analysis (risk-adjusted) Total costs Total benefits Cumulative net benefits
  18. 18. 18© 2017 FORRESTER. REPRODUCTION PROHIBITED. • Turnover reduced from 25% to 20% • 50 total positions impacted by PayScale • Avoided hiring and recruiting • Additional benefits such as employee satisfaction Reduced turnover Input metrics w/ PayScale Turnover 25% to 20% Cost to recruit and hire a new employee (estimated) $20,000 Percent of employee that say pay was a reason for leaving 40% Percent of employees that left that could be avoided 60% Total employees 4,000 Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017
  19. 19. 19© 2017 FORRESTER. REPRODUCTION PROHIBITED. Better Transparency and Communication Salary standards are clear, measurable and easy to communicate. Fewer and faster ad- hoc compensation reviews Managers trust the process and data; any questions are still handled faster One avoided comp team hire 40 to 4 hours managing salary surveys. Easier job matching. Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017 Other Benefits
  20. 20. 20© 2017 FORRESTER. REPRODUCTION PROHIBITED. “Whenever I’ve done market pricing, I’ve always felt like if I could match about 80% of the jobs to market data in the surveys, I was setting up a really good foundation. Well here, I’ve been able to find good solid matches for about 90% of the jobs or more.” Source: The Total Economic Impact™ Of PayScale: Cost Savings And Business Benefits Enabled By The PayScale Compensation Intelligence Platform. June 2017 “We know for a fact that the data we have in MarketPay helped us build and keep current our Salary structure. It helps our managers and recruiters make better-informed pay decisions.”
  21. 21. 21© 2017 FORRESTER. REPRODUCTION PROHIBITED. What’s Next?
  22. 22. 22© 2017 FORRESTER. REPRODUCTION PROHIBITED. Compensation can be a value-added service 1. How do you think about compensation? • Is it simply based on past or current employee salaries? • Is it a strategic opportunity to bring in better talent? • Does it help or hinder employee engagement? 2. Build a business case • Use the TEI study, and create your own assessment 3. Start now! The sooner you start the sooner you save 4. Get the full report!
  23. 23. 23© 2017 FORRESTER. REPRODUCTION PROHIBITED. More discussion and workshop at Compference! › In person review of study findings › Workshop time to start your own business case! › October 3 right before lunch
  24. 24. 24© 2017 FORRESTER. REPRODUCTION PROHIBITED. Q&A
  25. 25. FORRESTER.COM Thank you © 2017 FORRESTER. REPRODUCTION PROHIBITED. Sean Owens sowens@forrester.com

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