Compensation reflects your culture. However, there's a disconnect between how employers think their employees feel about pay and how employees feel. The 2017 Compensation Best Practices Report supports this disconnect: 44% of employers say their employees are fairly paid, but only 20% of employees agree.
Join PayScale and BambooHR as we discuss more interesting findings from the 2017 Compensation Best Practices Report. We’ll also discuss how organizations use modern compensation practices to get positive business results.
Register for this webinar and you’ll learn:
-What trends exist in pay transparency
-Why the standard 3 percent raise might be on its way out
-Why you should consider paying more for competitive jobs
-How to align variable pay to business goals
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Comp Is Culture
The talent game is about reputation.
How you pay, what you value and how you communicate that
to your employees is integral to engaging your employees.
This is your ‘Pay Brand.’
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Death of the 3% Raise
If your employees matter to you, show
them with cash
• Only 26% of companies gave a 3% average raise
• 34% of organizations say the highest base pay
increase they gave to an employee topped 10%
• 11% reported an average increase over 5%
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Data Is the Backbone of Good Comp
To retain, engage, attract top talent in
critical roles, you need good data
• 54% of organizations have done a full market
study within the past year
• 46% reference market data for individual jobs
more frequently than annually
• 13% check market data for jobs at least weekly
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Check out the
2017 CBPR
View interactive charts and
download the report
www.payscale.com/cbpr
Keep an eye out for upcoming webinars
that will keep the comp in your culture
all year long.
This is a big data set. 7% is still over 500 responses. (see 8% Canada)
Your Pay Brand
There is evidence that some organizations realize the connection between comp and culture. Those companies are thriving.
On the other hand, some companies are *really* missing the mark. Those companies are *not* thriving.
50% of orgs agree that comp drives engagement, but only about a quarter of them (26%) have changed pay as a result of ee engagement survey feedback
11% of companies don’t ask about pay on engagement surveys – we wonder: how do you know how they feel about pay if you don’t ask?
Given how many options there are for how to reward employees for high-performance, we were shocked by how many organizations don’t.
#1: Bigger base pay: 54%
#2: Bonus – no formal plan: 35%
#3: Goal-based bonus: 29%
#4: Award or recognition (ee of the month): 28%
#5: Non-monetary public recognition: 23%
#6: Flexible work schedule: 22%
#7: Commissions: 12%
#7: PTO: 12%
#7: Flexible work location: 12%
#10: We don’t: 11%
#11: Equity: 7%
Execs are starting to care – we’ve got to help connect the dots to help them care about comp in useful ways
Comp as an extension of culture, drives talent strategy, engagement, business results…
Transparency is 3+ on the spectrum
Transparency isn’t all or nothing, but about finding the right fit for your culture
Be Consistent
Ducks in a row (plan setup)
Make an intentional decision and stick with it.
Organizations and employees do a Value exchange – their deal
We asked orgs 3 questions about raises to understand the practice: what they budgeted, about their average increase, and about their highest increase given.
Also, when we say 3% we mean it – one bucket went up to 2.99%, one started at 3.01%. Between them was 3.0.
Most interesting – how many don’t give 3… because they know they have to exceed that for the best talent.
And even when they give 3% on average, their highest increases are higher. – appropriately differentiating pay to reward results.
It’s about Fairness….. To market
Employees come with data. They come to interviews with it; they come to evaluation meetings with it; and they come to managers when they least expect it, armed with data.
Companies need to equip managers with data, and train them to use it. Explain why the data is a reflection of the organizational priorities.
To do so, you need to make sure you have good data that fits your needs:
Fresh
Accurate
Validated
Encompasses all jobs/locations (breadth & depth)
Last not least, let’s talk about variable pay.
Companies are doing it. 74% of companies use variable pay:
Individual bonus: 64%
Discretionary bonus: 46%
Hiring bonus: 27%
Team bonus: 25%
Retention bonus: 22%
Market premium bonus: 4%
make sure variable pay is aligned with what you’re doing everywhere else.
frequency aligns to business cycles (project, quarterly, etc)
consider variable pay at all levels: exec, directors & managers, exempt, non-exempt, sales This especially should align with the cultural values you express (how hierarchical; do all employee contributions matter, etc)
Biggest challenges for 2017? It was all about talent. Retaining the millennial workforce as they move into management and leadership roles. Developing talent to fill the gaps as the Boomers finally consider retirement.
At the end of the day, pay is about people.