Workforce volatility can profoundly impact productivity for individuals, departments or across entire organizations. From competitive job markets to rising employee turnover, there’s a common way employers of any size, in any industry, can overcome these workforces challenges – strategic compensation.

1. Overcoming
Workforce
Challenges with
Strategic
Compensation
Initiatives
Guest Presenter: Theresa Worman
Executive Vice President
Compdata Surveys & Consulting
TalentTakeaways
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2. AGENDAThe Series
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5. AGENDAAbout the Presenter
Talent Takeaways Series
Theresa M. Worman
Theresa is a recognized compensation expert with more
than twenty years in the industry. She oversees
business development and works to bring Compdata’s
consulting and survey solutions to the organizations
needing them.
Throughout her career, Theresa has been instrumental
in the creation and evolution of Compdata’s product
offerings and consulting services. Theresa often lends
her expertise to audiences at seminars and webinars for
ASHHRA, WorldatWork and state hospital associations.
She also shares her knowledge with journalists from
media outlets across the country, and has been
published in WorldatWork’s Workspan magazine on
multiple occasions, most recently the May 2017 issue.

6. INTRODUCTION
Top priorities for workforce planning initiatives:
– Finding candidates in high demand talent pools
– Compensating competitively and fairly
– Retaining top performers

7. REALITIES
OF TODAY’S WORKFORCE
TURNOVER RETIREMENT CULTURE SHIFTSKILL SHORTAGE

8. TURNOVER
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
2010 2011 2012 2013 2014 2015 2016 2017
9.1%
9.8% 9.8%
10.4%
11.0%
11.6%
12.8%
13.5%
Voluntary Turnover: All Industries

9. TURNOVER
Consider tracking turnover data to
determine the root cause(s):
• Tenure with your organization
• Age of employees (or generation)
• Specific skills
• Departments
• Shifts
• Supervisors or Managers

10. SKILL SHORTAGE
Skill shortages likely
to plague US labor market
for up to 15 years
• Healthcare & High Tech hit hard
• Nearly 1 in 4 jobs created in ‘16 was
healthcare sector*
*Bureau of Labor Statistics

11. SKILL SHORTAGE
Addressing skill shortages:
• More aggressive tuition reimbursement
• Student loans payment programs
• Retention bonuses for high demand skills
• Career Ladders or clear career paths and goals
• Mentoring Programs

12. RETIREMENT
10,000 Baby Boomers
reach retirement age
every day!
Pew Research Center

13. CULTURE SHIFT
• 54% of millennials are expected to
have 2-5 employers in their
lifetime*
• 25% expect to have 6 or more*
• Gen Xers averaged 2 jobs in 10 years
after getting a degree**
• Millennials are averaging at least 4
jobs in first 10 years**
*PriceWaterhouseCoopers
**LinkedIn

14. CULTURE SHIFT
Millennial Mentality
• Brought up playing sports
- Prefer collaborative environment to
competitive
- Prefer coach to boss
• Were raised as friends with their parents
- See themselves as mature
- Feel they are fully capable
• Anxious to “Go to Grow”

15. SKILL SHORTAGE
Addressing skill shortages:
• More aggressive tuition reimbursement
• Student loans payment programs
• Retention bonuses for high demand skills
• Career Ladders or clear career paths and goals
• Mentoring Programs





MILLENNIALS
MILLENNIALS

16. GOALS
SUCCESSFULLY
RECRUIT
MANAGE
TURNOVER
IMPROVE
RETENTION
Recruit successfully
with market
competitive rates
Manage turnover
by addressing pay
compression issues
Improve retention
rates through
transparency
Overcome Workforce Issues and…

17. REACH NEW
HEIGHTS
Implementation &
Communication
Maintain compliance with
new regulations
Administer a fair and equitable
compensation program
Design a fair and equitable
compensation program
Develop a strong foundation

18. DEVELOP A STRONG
FOUNDATION

19. COMPENSATION
PHILOSOPHY
Compensation
Philosophy (n):
A formal statement
explaining the
organization’s
position regarding
employee
compensation. It
should answer…
1
2
3
How do we desire to
pay compared to other
organizations?
How do the compensation
practices and policies
support the overall goals
of the organization?
How do we ensure fair pay
practices?

20. POLL #1
How would you describe your company’s
compensation philosophy?

21. NEW HIRE
PRACTICES
• New hires need to be compensated at the right levels
from the beginning
• Pay and how its administered will have an immediate and
long-lasting impression on employees
• People have a good sense of their market value and how
their pay compares internally

22. NEW HIRE
PRACTICES

23. Are you Underpaying or Overpaying?
Know the Market and How You Compare
NEW HIRE
PRACTICES
0
20
40
60
80
100
120
Too low: risk of
losing good talent
or hiring an
employee that
begins their
career resentful
Too high: create
high expectations,
an entitlement
attitude, and it
impacts the
bottom line

24. POLL #2
How confident are you in
your job descriptions?

25. POLL #3
What percentage of your
job descriptions are up-to-date?

26. The process of updating job documentation increases
employee-manager communication and helps employees
gain better clarity of job duties, leading to higher
employee engagement
JOB
DOCUMENTATION
Only 33% of
employees feel
they are engaged
at work Engaged employees
can increase
productivity by 21%
and profitability by
22%

27. MANAGEMENT &
ADMINISTRATION
Pay Management and Administration Considerations
• Design and manage the compensation program and administration
guidelines consistently with organizational objectives
• It’s critical to balance the organizational need for internal equity
and consistency while responding to the desire to be market
competitive
• Maintain the compensation structures annually – even if you don’t
make adjustments every year!

28. DESIGNING A FAIR AND
EQUITABLE COMP PROGRAM

29. COMP
PROGRAM
Salary Ranges | Midpoint Differentials | Market Data

30. SALARY RANGES
• To recognize differences in experience and ability, a salary
range is established around the competitive rate for each
grade
• The salary range should allow an organization the flexibility to
respond to sudden variations in the market for specific jobs

31. MIDPOINT
DIFFERENTIAL
• The midpoint differential is the difference between the
midpoints of two adjacent grades expressed as a
percent
• As you move up in the salary structure, the midpoint
differentials typically increase
– Helps prevent pay compression between jobs
– Keeps the difference significant enough to allow career growth

32. MARKET DATA
• Accessing reliable information relevant to your market will
help guide your compensation practices and structure
• Surveys are designed to provide a snapshot of the labor
market, but compensation is an art, not a science.
– Even the best data requires handling by an HR professional who
understands the strategic compensation goals of the organization.
• Determining individual pay depends on the value of the
job to the organization as a whole, and may vary based on
skill-level and experience

33. ADMINISTERING A FAIR AND
EQUITABLE COMPENSATION
PROGRAM

34. PAY
COMPRESSION
Pay Compression (n):
When you have small
differences in pay
regardless of
experience, skills,
level or seniority
1
2
3
Pay compression
doesn’t form overnight
Specific compression issues
vary noticeably from
organization to organization
How to fix the problem
also varies depending on
the situation

35. PAY INCREASES
& THE MARKET
Considerations
Review current
incumbent
salaries versus
new hire salaries
Update salary
ranges annually
Ensure administrative
guidelines are
consistently applied
A
B
C

36. MANAGING THE
RANGE
Managing
Performance
HIGH PERFORMERS
Manage at range maximum
Consider promotion
Re-evaluate job and adjust salary if needed
Provide a more defined grade structure
Update the succession plan
UNDERPERFORMERS
Consider re-assessing some employees
Freeze compensation
Reassign the employee to a job with lower
responsibility levels

37. MAINTAINING COMPLIANCE
WITH NEW REGULATIONS

38. COMPLIANCE
• It’s critical for organizations to stay compliant with
every-changing labor law
– Minimum Wage, FLSA, etc…
• In addition, there is a strong need to design and
manage compensation programs consistently with
organizational objectives

39. MINIMUM
WAGE
Determine when the changes will
occur and how much they will be
Calculate how many employees
are currently being paid below
minimum wage
Update the compensation
structure
Check for pay compression
Navigate changes successfully
1
2
3
4

40. IMPLEMENTATION AND
COMMUNICATION

41. IMPLEMENTATION
HR
SHOULD
PROVIDE LEADERSHIP
Compensation and benefits-related program
design information, including guidelines and
training
CONDUCT & ANALYZE SURVEY DATA
Key to making informed salary decisions
PROACTIVELY ADVISE MANAGERS
Be a strategic partner for compensation
matters
MANAGE JOB DESCRIPTIONS
Facilitate, coordinate, write and update
job descriptions as appropriate
SUPPORT ORGANIZATIONAL STRUCTURE
Provide organizational charts and be a
partner during re-organizations

42. COMMUNICATION
Helps
employees
clarify their role
Builds trust
Resolves pay
inequity
Pay Transparency

43. Contact us anytime with
questions about our data or
our consulting services:
Theresa M. Worman
Compdata Surveys & Consulting
800.300.9570
TWorman@CompdataConsulting.com

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