1. The
Widening
Skills
Gap
and
its
Connec5on
to
Compensa5on
Mykkah
Herner,
MA,
CCP
Senior
Compensa-on
Consultant,
PayScale,
Inc.

2. www.payscale.com
14,000
Posi5ons
2500
Customers
36
Million
Salary
Profiles
250
Compensable
Factors
11
Countries

3. www.payscale.com
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. www.payscale.com
What
is
The
Skills
Gap?

5. www.payscale.com
Skills
Gap
Defined
Simply
put…
“job
applicants
don’t
have
the
right
skills
for
the
job”
-­‐
Kathy
Robertson,
Sacramento
Business
Journal

6. www.payscale.com
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. www.payscale.com
Effect
of
Skills
Gap

8. www.payscale.com
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. www.payscale.com
Who
it
Impacts
(Jobs)
Depends
on
Org
Size
Other
Includes:
• STEM
Jobs
• Finance
• Medical
Specialists
• Maintenance
• Machinists
• Truck
Drivers

10. www.payscale.com
Costs
of
the
Skills
Gap
o Turnover
o Over5me
o Employee
pay
for
“skilled”
posi5ons
o Produc5vity
o Employee
morale

11. www.payscale.com
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. www.payscale.com
Bridging
the
Gap

13. www.payscale.com
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. www.payscale.com
Retaining
Skilled
Talent
Complexity
of
the
mix…
Company
Culture
Base
Pay
Structure
Variable
or
Incen-ve
Pay
Structure
Individualized
Rewards
&
Recogni-on

15. www.payscale.com
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. www.payscale.com
Variable
&
Incen5ve
Pay
Strategy
o Keep
it
simple
o Reward
the
right
behaviors
o Align
to
organiza5onal
goals
o Leverage
variable
costs

17. www.payscale.com
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. www.payscale.com
Notes
on
Millennials
o Transparency
and
communica5on
o Reward
and
recogni5on
o Engagement
–
to
the
extremes

19. www.payscale.com
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. PayScale
Delivers
Where
Other
Compensa5on
Providers
Fall
Short
Connect
with
PayScale:
Visit
our
blog:
www.payscale.com/compensa-on-­‐today
Join
our
Group
on
Linkedin:
Compensa-on
Today:
HR
Best
Prac-ces
Get
the
2013
Comp
Best
Prac5ces
Report:
hTp://resources.payscale.com/
2013-­‐compensa-on-­‐prac-ces-­‐report.html
Mykkah
Herner,
MA,
CCP
Senior
Compensa-on
Consultant,
PayScale,
Inc.
www.payscale.com