Main Remuneration Trends in IT Sector BASED ON RESULTS OF HAY GROUP CLUB SURVEY FOR IT SECTOR PREPARED FOR AMCHAM HR COMMITTEE
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1 Main Remuneration Trends in IT Sector BASED ON RESULTS OF HAY GROUP CLUB SURVEY FOR IT SECTOR PREPARED FOR AMCHAM HR COMMITTEE
2 Hay Group s methodology: job mapping Each job exists to achieve an end result Know-how + Problem solving + Accountability = Total job size Technical know-how Thinking environment Freedom to act Planning, organizing and controlling Thinking challenge Nature of impact Area of impact Impact Human relations Skills 2012 Hay Group. All rights reserved 2
3 Value of our methodology Hay Group s job mapping methodology is world s best known tool to analyze jobs during remuneration surveys: With our global methodology you can analyze any job and define the relevant level of pay; Job Mapping allows job comparisons between job families, companies on the market and different industries taking into consideration size of business and relative weight of different functions Job Mapping provides a map of company jobs demonstrating job sizes and reporting relationships inside the organization 2012 Hay Group. All rights reserved 3
4 Survey participants Reference date; 1 December
5 Why Hay Group Consistent All jobs are mapped to the same global standard, meaning that all jobs are weighted against the same criteria within each company with support of Hay Group consultant. Pay eg Base Salary is ranked highest-to-lowest, in each reference level, to determine salary percentiles (P90, P75, Median etc), while company weighting is used to offset influence of unusually large company inputs Accurate & Complete All data is directly submitted by participants, rather than by recruiting agencies or employees, who usually tend to distort actual figures and value; Hay Group collects pay & benefits data from participant companies for actual salaries paid on the specific survey effective date; Hay Group collects and analyzes up to 16 compensation elements (all of which are practised in Russian Federation); Data is submitted for all type of personnel and jobs by participants Hay Group. All rights reserved 5
6 Salaries in Russia are known to be largely dependant on sector and region
7 Where is the place of IT sector in the pay market among others? 4% 3% -2% -2% -3% -4% -15% -20% 29% 20% 16% 13% -30% -20% -10% 0% 10% 20% 30% 40% Natural Resources Oil&Gas FMCG Non-Food Chemical Pharmaceutical IT Construction materials Automotive Industry FMCG Food Media Retail Source: database of PayNet 2012, a comparison of industrial markets relative to the total market in Moscow 7
8 What does +3% mean? General Market IT Market Specialists in IT sector earn about 10-15% more than in general market Senior managers in IT sector earn about 10-15% less Specialists Team Leaders Senior Management 8
9 For general industry Moscow and Sakhalin remain 2 highest paid regions in Russia Moscow pay market = 100% 78% 51% 57% 60% 59% 53% 59% 54% 49% 54% 57% 87% 87% 59% 57% 103% 2012 Hay Group. All rights reserved Source: Hay Group PayNet database 2012, which contains data from 398 companies on salary entries 9
10 But for IT sector the gap between Moscow and regions is smaller Novosibirsk 65% 59% St Petersburg 78% 85% IT Market General Market Moscow 100% 100% 0% 20% 40% 60% 80% 100% 120% Source: Hay Group Club Survey for IT Sector 10
11 The salaries of junior IT developers in St. Petersburg are catching up with those of Moscow
12 Salaries in IT Sector: Moscow vs. St. Petersburg Moscow St Petersburg Source: Hay Group Club Survey for IT Sector 2012 Hay Group. All rights reserved 12
13 It is also a specific knowledge of technology that matters 5,3% 6,4% 7,3% 11,8% 13,3% C# Database management Architect Java Java Script 5,2% C++ -6,7% -5,0% -2,4% -2,6% 2,7% Project manager Automated testing Web-design Business analyst -10,7% IT Support -12,2% Infrastructure -13,3% Technical writer -15,0% -10,0% -5,0% 0,0% 5,0% 10,0% 15,0% Manual tester 13
14 The magic power of benefits Compensation structure of IT sector Base salary Variable remuneration Compensation and benefits General market compensation structure Base salary Variable remuneration Compensation and benefits 18% 11% 11% 11% 71% 78% 14
15 IT sector has different package of benefits compared to the general market IT industry General market Healthcare Telecommu nications Training & Development Meal Assistance Short-Term Disability 100% 94% 94% 71% 59% 96% 79% 38% 67% 33% 15
16 And also there are specific benefits provided only to employees in IT sector 94,1% Relaxation areas 71% flexible work hours 77% working from home 41% additional days-off Free of charge Tea/ coffee 94,1% Snacks 52,9% Fixed Parking Spots 70,6% Doctor in the office 47,1% 16
17 In IT market 41% of companies provide their employees with LTI, whereas in General market only 19% do so.
18 What type of LTI vehicles do IT companies offer? 60% 57% 50% 40% 30% 29% % of companies 20% 14% 10% 0% Stock Options 0% Stock Appreciation Rights Restricted Stock/Shares 0% Performance Shares Performance Units /Long-term cash 18
19 Survey objectives & benefits Positioning Cost Management Benchmarking How are different jobs rewarded? Which benefits does market offer? How the same job is rewarded in different regions? What benefits should we offer to our employees and how much other companies pay for these? How competitive is our reward offer? What reward practices are there on the market? Access to reward data that helps making better informed decisions about recruitment and retention 19
20 Further cooperation Our partners made decision to support initiative and conduct survey for IT industry on a regular basis. Development of customized job matrix Job analysis based on unique methodology Data collection Data collection Results Mar Apr May Jun Jul Aug Sep Oct Nov 20
21 Global initiative ebay, Expedia, Citrix, Google, Hitachi DST, LinkedIn, Qualcomm and many many others Over 9.5 million More than Technology incumbents Organizations Countries 21
22 Hay Group conducts largest remuneration surveys in Russian Federation 400+ companies 25 cities 30 regions 14 economy sectors New economy sectors in 2013: IT E-commerce 22
23 Regular survey results Reward Data Available online, 24/7, 365 days a year; Constant source of reward data to help you to accurately benchmark your tangible reward from base salary through to total remuneration. Analytics on Practices & Benefits Customized for IT; Market movements Salary review policy; Data on STI s and LTI s; Detailed description of key benefits. Regional coverage Russian Federation Moscow Saint Petersburg 23
24 Thank you for attention! Let s talk Alexey Ivanov Tel: +7 (495) Cell: Alexey_ivanov@haygroup.com Olga Zabrodskaya Tel: +7 (495) Cell: Olga_Zabrodskaya@haygroup.com 24
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