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Compensation trends in the insurance industry (1)
1. PayScale
Tim Low, VP Marketing
timl@payscale.com
Karaka Leslie, Business Development
karakal@payscale.com
COMPENSATION
BEST PRACTICES
Trends in the Insurance Industry
3. www.payscale.com
The Market is Volatile
o The recovery of the economy and profits and the
compensation lag
o The latest trends in HCM & compensation
o The on-going war for talent and the impact on
compensation
o Results of the PayScale 2013 Compensation Best
Practices Survey
5. www.payscale.com
*University of Wisconsin Center for Cooperatives Research http://reic.uwcc.wisc.edu/mutualinsurance/
Mutuals: $2B in Direct Wages
$26B in total Wages
$2B X .05 = $100,000,000
17. Hot Jobs in the Insurance Industry
Q2 2011-Q2 2013
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Operations ManagerClaims Adjuster / Examiner / InvestigatorInsurance BrokerInsurance AgentSenior Business AnalystPersonal Lines Manager (Insurance)Customer Service SupervisorActuarial AnalystFinancial AnalystClaims ProcessorInsurance Appraiser, Auto DamageBusiness Systems Anal
25. www.payscale.com
67% of respondents from the
Insurance Industry cite retaining top
employees as their primary
compensation objective in 2013
Insurance Trends:
Retention Concerns
27. www.payscale.com
87% of respondents from the
Insurance Industry gave raises in 2012
90% of respondents from the
Insurance Industry say they will give raises
in 2013
Insurance Trends:
Wage Growth
30. www.payscale.com
Prioritized Treatment
Not all individuals, process, functions and
business units have the same impact on results
We need to prioritize jobs, key employees and
business units and then allocate the greatest
portion of its resources to those high priority
areas.
Ideas:
o Recruitment
o Base Pay
o Incentive Pay
o Perks & Fringe benefits
o Recognition
34. www.payscale.com
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 your pay strategy with management
• Develop a strong compensation structure
Takeaways
36. o Ever-fresh Compensation Data
o Subscription Software to Create
and Manage Comp
o Compensation Plan Design
Karaka Leslie, Business Development
karakal@payscale.com
Tim Low, VP Marketing
timl@payscale.com
Thank You!
Hinweis der Redaktion
TimConversation with employees that’s fact basedHit on our business model—we crowdsource data and that’s why we’re huge! Tee up index data
Tim3% calm veneerMasks huge variation in individual jobs, markets
Tim
Tim
Tim
Tim
Karaka Make a list of the top three things that have affected compensation practices or or your labor market in the past two years. Break-Tim collects or raise hand with responsesChatWhat we want:-salary rising-war for talent-harder to find good people
Karaka explains indexBecause of our ever-fresh robust database, PayScale has the ability to publish a Compensation Index that shows macro trends in pay. Using 2006 as a baseline we measure the % change in pay quarter over quarter.You’ll see this published in NY Times Business Week Huffington PostOur index is broken down by geography, company size, industry and job family. We’ve pulled some highlights from the index as we thought it would benefit our audience today. First, a high level.
KarakaBig volatility between 2006 and today. And individual volatility as well. We’ll look at each of these separately in a moment but we thought the following would interest you. As you can see and we all felt this at the end of 2008, our index shows the % decrease in pay overall due to the recession. Now, what this measures is not decreases to individual’s pay but a change in the total pay of employed workers. Meaning, when people lost their jobs due to RIFs and layoffs, our index measured it. This is critical to understandiwhen attracting and retaining the right talent for your business are what the changes are to pay for your jobs and your labor market. for example IT trends
Karaka explains Tim commentInsurance took a harder hit in 2008 but has steadily recovered nicely above pace with the national trend.
Karaka explains Tim commentThis is very interesting to see. One always thinks that larger companies can afford to pay more so they do and that has historically been the case but what we are now seeing just in the past quarter is that trend changing. Smaller employers in this example have outpaced large companies when it comes to increase in pay over the past two quarters. You’ll see data later that supports this as well with respect to their optimism. Competing for talent small guy versus big guyInverse as well, what it means for large companies
Karaka
Tim
KarakaCannot tell you how many times I’ve heard our customers say that their jobs are unique. It is so very true. Especially now when we are all doing more with less. As such, it is critical to understand the market for your important jobs so that you are not at risk of losing talent to a competitor. Our Story of cisco networking. Our Lead Data Economist has been quoted several times in saying “For white collar jobs, there are only a few ways to improve your pay and certifications are a top way to do that”We hear this often when people are recruiting and they are looking for that perfect candidate. We call this the Purple Squirrel. This slide is a representation of those unique positions that are out there.
There’s been a dance between these two job families over the past few years. Accounting/Finance saw an earlier recovery to wages than HR counterparts and is steadily outpacing HR jobs. Both of course are critical.HR jobs are ahead of “Administrative/Clerical” “Legal” “manufacturing jobs” “construction jobs”
Percentage Pay Growth: Using a methodology similar to the PayScale Index (http://www.payscale.com/payscale-index-Q2-2013/) we calculate the percentage growth in pay over time, all other things equal. This isolates changes in labor market demand for a given title, skilll,or certification. The time-frame for this is growth is from Quarter 2 in 2011 to Quarter 2 in 2013.The average pay growth across all top jobs in insurance is 5.20%, across top skills in insurance is 4.40%, and across top certifications in insurance is 6.90%. All pay growth is specific to skills, certifications, and job titles within the insurance industry.Operations Manager27.30%Claims Adjuster / Examiner / Investigator17.90%Insurance Broker16.70%$61,000Insurance Agent14.40%Senior Business Analyst13.60%Personal Lines Manager (Insurance)13.60%Customer Service Supervisor11.60%Actuarial Analyst11.50%Financial Analyst10.60%Claims Processor9.00%Insurance Appraiser, Auto Damage8.60%Business Systems Analyst8.20%
Encourage you to think of your purple squirrel. Collect ideas in the beginning and price at the end.Worksheet 2-we’ll do it at the end
TimThis is the other side of payscaleresearh, this is what companies say theyr’re doing
Karaka—small companies are more optimistic.We saw the index support this feeling when we looked at the comparison between small companies and larger companies from a change in pay perspective. This result from our survey supports that.
Karaka7% expect it to weaken, 26% expect it to stay the same
Tim Optimisim is playing out in the market
Insurance is a little higher than the average at 51%
Retention is a top priority for many organizations that we talk to and the data shows this to be the case as well.When you factor in the cost of turnover (sometimes equaling to 6 months of salary) there is no question this is a concern for most companies. The days of employees being lucky that they had a job are over and employees are starting to look elsewhere.
#1 reason for employees leaving?“Seeking Higher Pay Elsewhere”The same was true in other industries such as mining, o&g, retail and manufacturing
KarakaSigns point to optimism. We can certainly see this coming to fruition with the conversations we are having with our customers. After some tighter years, companies are starting to award increases this year. We’ll talk a little later on about trends for allocating increases as well. Tim comment
When asked to who in their workforce, the insurance industry cited to an average of 78% of their workforce.Karaka Tim Comment
KarakaWhen crafting next years budget vs. this year the use of Across the board increases down by 50%Use of Variable Pay has increased 300%
Names in the drawerVideo: 12 names
TimRevenue per employeeGoes against the idea of fairness, equity which is akin to HR’s nature