Radford Analytic Tools

Transcription

1 Radford Analytic Tools 26 February :00 10:45 Guy Pritchard Gaurav Dutt One Firm. Complete Solutions.

2 Welcome Welcome to our first Radford EMEA event in Our other events scheduled in EMEA for 2014 are: 2014 Radford EMEA Events Location Date Managing Employee Benefits Effectively London 13 th March Middle East Forum Dubai 25 th March Reward Forum Frankfurt 8 th May Sales Compensation Webcast 9 th June Reward Forum Munich 11 th September EMEA Regional Meeting London October (date TBC) Radford Analytics Webcast

3 Agenda Radford You Vs. Market (YvM) Analytics Reward Analytics Global Workforce Analytics (GWA) Radford Analytics Webcast

4 You Vs. Market Compensation Analytics Benchmarking Tools One Firm. Complete Solutions.

5 % of Incumbents Global Leveling This analysis audits your company s job matching for comparison against a specific group of selected companies, to identify areas where your company s job matching practices are aligned or differ from the market 45% 40% YvM Distribution of Incumbent Matches for: United Kingdom 35% 30% 25% You 20% 15% 10% 5% 0% 0% 3% Product Dev Prof Ind. 1 18% 14% Product Dev Prof Ind. 2 24% 30% Product Dev Prof Ind. 3 38% 35% Product Dev Prof Ind. 4 24% 14% Product Dev Prof Ind. 5 0% 2% Product Dev Prof Ind. 6 Market Source: Illustrative example Radford Analytics Webcast

6 Cash You vs. Market Example A tailored workbook allows an easy-to-see traffic light overview of your pay market positioning by individual YvM By Incumbent Output Country France France France France Germany Germany Germany Incumbent ID ABC1 ABC2 ABC7 ABC8 ABC9 ABC10 ABC11 Radford Benchmark Job Title Human Resources Mgmt 2 Professional Services Consultant 5 Professional Services Consultant 5 Professional Services Consultant 5 Professional Services Consultant 5 Professional Services Consultant 5 Professional Services Consultant 5 Base Salary Bonus (as % of Base) Company XYZ Actual Bonus (as % of Base) Comp. Actual Comp. Base Salary Market - 50th Percentile (Median) Bonus (as % of Base) Actual Bonus (as % of Base) Comp. Actual Comp. Base Salary Variance to 50th Percentile Bonus (% point var.) Actual Bonus (% point var.) Comp. Actual Comp. 45, ,075 41,066 47, ,662 52,185 94% 238% 58% 101% 79% 50, ,001 50,936 70, ,750 75,000 73% 130% 42% 72% 68% 56, ,388 59,897 70, ,750 75,000 81% 102% 56% 88% 80% 65, ,388 63,397 70, ,750 75,000 93% 104% 38% 88% 85% 63, ,608 57,120 70, ,750 75,000 91% 102% 32% 74% 76% 62, ,318 61,699 70, ,750 75,000 89% 111% 57% 74% 82% 57, ,561 64,616 70, ,750 75,000 82% 110% 46% 80% 86% Source: Illustrative example Radford Analytics Webcast

7 % of Market Overall Compensation Positioning The analysis below shows the average competitive positioning of the population against the peer group, and this can be replicated on a global or country basis Cash Compensation vs. Market 133% 114% 130% 122% 109% 99% 111% 79% 95% Base Salary Bonus (% Base) Cash (Fixed Comp + Bonus) XYZ as a Percent of Market Market 25th XYZ as a Percent of Market Market 50th XYZ as a Percent of Market Market 75th Source: Illustrative example Radford Analytics Webcast

8 You vs. Market Case Study: Building A Bespoke Compensation Benchmarking Tool Client Situation A software development company established over 10 years ago and has grown rapidly during this time The key to this company s growth has always been through innovation with a group of key senior developers being the drivers behind this The company had recently adopted a more cautious approach to making LTI grants, but was unsure of the overall impact on competitiveness Among other issues explored in this project was the difficulty in attracting and retaining a core of experienced staff in order to build effectively on the success of the company Radford Approach Radford was requested to run a compensation health check and analyse market competitiveness, given the concern around retention and equity We built a bespoke benchmarking report tool for the client, to reflect their organizational structure The client now retains the tool and uses it following further refreshes of market data Radford Analytics Webcast

9 Assessing the Management Category Example Company United Kingdom-Pound Management Levelling Chart for All Management in United Kingdom 61% All Management 50th Percentile (Median) 43% Peer 23% 27% 17% 12% 0% 3% 3% 7% 2% 3% over 110% of market Radford Level Example Company Market 90% to 110% of market less than 90% of market Example Company Market - 50th Percentile (Median) Variance Base Salary Bonus Cash LTI Direct Comp. Incumb. Count Base Salary Bonus Cash LTI Direct Comp. Incumb. Count Base Salary Bonus Cash LTI Direct Comp. Level ,000 3,000 36,000 1,000 37, Level 2 45,000 10,000 55, , ,000 4,000 42,000 6,000 48,000 2, % 250% 131% 0% 115% Level 3 57,000 10,000 67, , ,000 5,000 63,000 6,000 69,000 12, % 200% 106% 0% 97% Level 4 75,000 20,000 95,000 2,000 97, ,000 10,000 88,000 10,000 98,000 8, % 200% 108% 20% 99% Level 5 100,000 30, ,000 5, , ,000 18, ,000 17, ,000 5, % 167% 112% 29% 102% Level 6 150,000 40, ,000 8, , ,000 37, ,000 33, ,000 1, % 108% 113% 24% 99% Source: Illustrative example Radford Analytics Webcast

10 Level 2 Level 3 Level 4 Level 5 Level 6 What is Management s Pay Mix? Pay Mix Analysis Source: Illustrative example. Company 75% 20% 5% Market 62% 18% 20% Company 74% 22% 4% Market 69% 14% 17% Company 77% 21% 2% Market 73% 10% 17% Company 85% 15% Market 78% 7% 15% Company 82% 18% Market 81% 8% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Radford Analytics Webcast Base Salary Bonus LTI (EV)

11 Assessing the Professional Category Example Company Levelling Chart for All Professional in United Kingdom United Kingdom-Pound Professional 39% 35% All Professional 50th Percentile (Median) 25% 30% Peer 20% 21% 6% 5% 9% 8% 1% 1% over 110% of market Radford Level Example Company Market 90% to 110% of market less than 90% of market Example Company Market - 50th Percentile (Median) Variance Base Salary Bonus Cash LTI Direct Comp. Incumb. Count Base Salary Bonus Cash LTI Direct Comp. Incumb. Count Base Salary Bonus Cash LTI Direct Comp. Level ,000 1,000 28,000 2,000 30,000 5,197 Level 2 35,000 5,000 40, , ,000 2,000 34,000 2,000 36,000 16, % 250% 118% 0% 111% Level 3 42,000 6,000 48, , ,000 4,000 44,000 2,000 46,000 33, % 150% 109% 0% 104% Level 4 55,000 8,000 63, , ,000 5,000 61,000 5,000 66,000 21, % 160% 103% 0% 95% Level 5 68,000 10,000 78,000 4,000 82, ,000 9,000 85,000 8,000 93,000 7,277 96% 111% 92% 50% 88% Level 6 80,000 13,000 93,000 6,000 99, ,000 15, ,000 15, ,000 1,239 94% 87% 89% 40% 83% Source: Illustrative example Radford Analytics Webcast

12 How is the Professional Category Distributed? 40% All Professionals - Quartile Distribution 35% 30% 25% 20% 15% 28% 31% 28% 34% 10% 20% 20% 18% 21% 5% 0% Mkt. Quartile 1 Mkt. Quartile 2 Mkt. Quartile 3 Mkt. Quartile 4 Base Salary Cash Source: Illustrative example Radford Analytics Webcast

13 Drilling Down into the Quartile Distribution 40% Web Developer Professionals - Quartile Distribution 30% 20% 10% 0% 40% 35% 38% 26% 28% 21% 16% 11% 25% Mkt. Quartile 1 Mkt. Quartile 2 Mkt. Quartile 3 Mkt. Quartile 4 Base Salary Cash Software Development Professionals - Quartile Distribution 30% 20% 33% 34% 38% 36% 10% 18% 20% 11% 10% 0% Mkt. Quartile 1 Mkt. Quartile 2 Mkt. Quartile 3 Mkt. Quartile 4 Source: Illustrative example Radford Analytics Webcast Base Salary Cash

14 You vs. Market Case Study Delivering Distinctive Impact & Value Due to the prevalent use of stock awards in previous years, the board had become a lot more cautious with their LTI plans and issued less stock to senior staff This created a disparity between the longer tenure senior staff with large stock holdings from previous grants, and those who have joined the company recently earning little or no stock Because of this, it was difficult to create the same levels of engagement for new hires, and it was difficult to attract talent who were expecting a significant share award There were some pay differentials creeping in among the professional staff, with the newly recruited hot skills staff being paid a premium when compared to the long tenure software developers Salaries are going to be tracked more regularly to ensure that the pay gap doesn t become any wider and will be governed using a refreshed set of pay bands and greater control on new hire salary approvals Radford Analytics Webcast

15 Reward Analytics Benchmarking and budgeting One Firm. Complete Solutions.

16 Radford and Aon Hewitt Partnership to Leverage Databases and Tools Data 1 Foundations 2 Tools / Technology Radford GTS and GSS databases Aon Hewitt benefit databases Actuarial methodology Compensation position assessment Dynamic reporting ANALYTICS Individual TR analysis Roll-up tool to aggregate based on demographics Simulate TR spend and budgeting TR benchmarking by geography and or BU Radford Analytics Webcast

17 Inform Your Global Rewards Strategy Financial Impact What is the value of each reward element and how does that compare to market? How do changes in the total rewards mix affect overall competitiveness and value relative to market? Making Smart Future Investments Does our total rewards package investment align with our business strategy and key talent pools? Which rewards levers can we adjust to get the desired outcomes? Employee Benefits Approach Is our benefits package competitive in the market place, not just in terms of practices, but in terms of value delivered to employees? To what degree should we provide benefits above and beyond the statutory requirements in each country? Radford Analytics Webcast

18 Technology Sector Rewards Case Study Client Situation High technology company with 19,000+ employees in 30+ countries Benchmarked total rewards packages in 9 countries with another consulting organization for the past 7 years; grew dissatisfied with services Client uses the analysis for benchmarking purposes and budgeting discussions Results are presented to the C-suite to inform total rewards decision-making and budget for coming year Radford Approach Radford and Aon Hewitt used an actuarial methodology to value benefits for all countries Market data from the high technology sector was used to value market benefits Radford developed an Excel-based roll up tool that aggregates total rewards data for all individuals according to the demographics of the organisation The client owns the data and is able to use the tool as needed in the future Radford Analytics Webcast

19 Dynamic Benchmarking Workbooks rewards deliverables feature dynamic, Excel-based benchmarking workbooks to help clients customize and leverage results across their organization Country: Function: Percentile: Business Division Level Germany Product Development 50 th ABC All Rewards Benchmarking (You as % of Market) Rewards Value 120% 110.0% 100% 80% 60% 40% 95.0% 85.0% 90.0% 93.0% Base Salary 1,000,000 Benefits 700,000 20% 0% Base Variable Equity Benefits Source: Illustrative example. Reward Equity 100,000 Variable 200, Radford Analytics Webcast

20 Aggregate Rewards Value vs. Market Your Company Aggregate Rewards Value: EUR 1,161,800,000 Market Aggregate Rewards Value: EUR 1,185,000,000 Benefits 259,000,000 Benefits 225,000,000 Equity 22,500,000 Equity 14,800,000 Variable 148,000,000 Fixed Salary 740,000,000 Variable 187,500,000 Fixed Salary 750,000,000 Values in: EUR Values in: EUR Your Company s average Rewards Value per employee is EUR 116,180 Market average Rewards Value per employee is EUR 118,500 Source: Illustrative example, assumes 10,000 employees Radford Analytics Webcast

21 Rewards Roll-Up Tool ABC Co. Rewards Analysis Custom Dynamic Data Display Tool Choose Versus Actual Cash TC (2013) Choose or Actual Cash Select Reporting Filters United States -- All All -- Choose Country -- All -- Choose Service Category -- All -- Choose Incentive Category Choose Business Organization -- All -- Choose Review Rating -- All -- Choose Function Choose Age Category -- All -- Choose Sex ABC Co. as a Percent of Market 250% 200% 150% 100% Exec Sr Mgr Mgr Sr Indiv Indiv All Levels 209% ABC Co. as a Percent of Market Median EXE SM IM/OM ICB ICA All Levels 2013 Base 101% 107% 108% 104% 104% 105% Variable 106% 144% 84% 98% 209% 104% Cash 144% 103% 115% 104% 103% 108% 105% Equity (incl. ESPP) 111% 64% 61% 35% 38% 60% 111% 115% 106% Cash & Equity 107% 105% 108% 100% 99% 108% 107% 101% 101% 103% 105% 104% 108% 106% 104% 104% 104% 108% 103% 107% 105% 104% 105% 100% Benefits 95% 99% 103% 98% 99% 99% 98% 99% 101% 95% 99% 103% 101% 105% 98% 98% 99% 99% 100% Rewards 104% 106% 101% 98% 84% 105% 100% 50% 64% 61% 35% 38% 60% 0% Exec Sr Mgr Mgr Sr Indiv Indiv All Levels 2013 Base Variable Cash Equity (incl. ESPP) Cash & Equity Benefits Rewards Source: Illustrative example Radford Analytics Webcast

22 Technology Sector Rewards Case Study Delivering Distinctive Impact & Value Delivered enhanced reporting to the client (including a benefit benchmarking report, total rewards roll up Excel-based tool and country summary) Provided consulting advice on valuation methodology and recommended changes from past methodology Offered a transparent benchmarking methodology, which was noted a significant improvement over past years Delivered a dynamic Excel-based tool to the client to allow them to own and analyze data further after the completion of the project Loaded client benefit data into Aon Hewitt s Greater Insight Radford Analytics Webcast

23 Global Workforce Analytics (GWA) Driving business performance through effective workforce strategies One Firm. Complete Solutions.

24 GWA Overview As of December 2013, our GWA database housed full census data for 122 companies in the global technology sector Together these companies generate $1.33 trillion in annual revenue and represent 2.8 million incumbents across 116 countries 122 Participating Companies $231 Billion in Pay 2.8 Million Incumbents 116 Countries with Incumbents Radford Analytics Webcast

25 Actionable Insights Global Workforce Distribution Distribution of all employees by country Delivers answers to questions on where talent resides, what it consists of and its aggregate value What percentage of the organization is in key markets and how does that compare to the benchmarks? Distribution of all employees by function What is the distribution among the functional areas or by business as compared to the benchmarks? What percentage of the labor pool consists of Product Development, Infrastructure, Sales, etc. How does this compare by country? What percentage of total Product Development talent is in the US vs. India vs. China? Distribution by job level What percentage of the population are at various levels (e.g., executive, management, professional individual contributors, or support? What is the distribution by job level within each category? What is the distribution by function or business in a country/ geo? Radford Analytics Webcast

26 GWA Full Census Submissions A selection of companies providing full-census data and with access to the Analytics Portal: ACCENTURE CITRIX SYSTEMS JUNIPER NETWORKS ON SEMICONDUCTOR SYNOPSYS ADOBE SYSTEMS DELL KLA-TENCOR OPEN TEXT TEKTRONIX ADVANCED MICRO DEVICES DOLBY LABORATORIES KRONOS ORACLE TERADATA AGILENT TECHNOLOGIES EBAY LAM RESEARCH PLANTRONICS TERADYNE ALCATEL-LUCENT ELECTRONIC ARTS LIFE TECHNOLOGIES PMC-SIERRA TEXAS INSTRUMENTS ALTERA ELECTRONICS FOR IMAGING LINKEDIN POLYCOM VERISIGN AMAZON.COM EMC LSI QUALCOMM VERIZON BUSINESS ANALOG DEVICES EPICOR SOFTWARE MAXIM INTEGRATED PRODUCTS QUANTUM VMWARE APPLE EXPEDIA MCAFEE SALESFORCE.COM WORKDAY APPLIED MATERIALS F5 NETWORKS MENTOR GRAPHICS SANDISK XILINX AT&T FACEBOOK MICRON TECHNOLOGY SANMINA YAHOO! ATMEL FAIRCHILD SEMICONDUCTOR MICROSEMI SAP AG AUTODESK FLEXTRONICS INTERNATIONAL MICROSOFT SEAGATE TECHNOLOGY BMC SOFTWARE FORTINET MONSTER WORLDWIDE SPIRENT COMMUNICATIONS BROADCOM FREESCALE SEMICONDUCTOR MOTOROLA MOBILITY SPLUNK BROCADE COMMUNICATIONS HEWLETT-PACKARD MOTOROLA SOLUTIONS SPRINT NEXTEL CA TECHNOLOGIES IBM NATIONAL INSTRUMENTS STRATUS TECHNOLOGIES CADENCE DESIGN SYSTEMS INFINERA NETAPP SUNPOWER CIENA INTEL NOKIA SYMANTEC CISCO SYSTEMS INTUIT NVIDIA SYNIVERSE TECHNOLOGIES Easy to submit data. Full census input required of benchmark and non-benchmark jobs Radford Analytics Webcast

27 Technology Sector GWA Case Study Client Situation High technology company with 40,000 employees in 80+ countries wanted to leverage GWA to inform decisions around the optimal Finance resource pool mode Radford was requested to develop an interactive output to show the size, profile and distribution of the Finance population relative to the total workforce across EMEA Results were presented to Executive leadership to understand the market alignment of the existing Finance headcount distribution and staffing ratios, across EMEA Radford Approach Market data from the GWA database was used to understand the size of Finance functions as a percentage of the workforce. Further analysis was undertaken to review the composition of the Finance workforce Radford developed an interactive tool to benchmark the headcount distribution and staffing ratio s, for a specific set of geographies, against a set of 60 hi-tech companies The model showed employee headcount distributions and staffing ratio s (1 to ) by geography, Radford category and level and as a % of the global and local workforce Radford Analytics Webcast

28 What % of the Workforce Resides in the Finance Function and How Does That Compare to Our Competitors? Global Finance Incumbents as % of Global Population EMEA Finance Incumbents as % of EMEA Population UK Finance Incumbents as % of UK Population Netherlands Finance Incumbents as % of Netherlands Population Average 1.87% 1.90% 2.04% 1.41% 50th 1.36% 1.54% 2.34% 1.57% You 1.59% 1.77% 3.05% 2.01% Market - Finance to Emp Population Ratio (1 to ) You - Finance to Emp Population Ratio (1 to ) Source: Radford GWA database. Illustrative example Radford Analytics Webcast

29 What is the Headcount Distribution of the Finance Function Among Employee Categories? Percent of Incumbents Geography Job Category Job Family EMEA All Categories All Families Average Headcount Distribution by Category EMEA Finance as % of EMEA Workforce 4.50% Market Average You 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 1.75% 2.85% 2.49% 3.82% 3.27% 2.27% 1.15% 1.17% 0.00% Exec Mgmt Prof Support Source: Radford GWA database. Illustrative example Radford Analytics Webcast

30 What is the Distribution of The Finance Headcount by Job Level? Percent of Incumbents Geography Job Category Job Family EMEA All Categories All Families Headcount Distribution by Level - EMEA Finance as % of EMEA Workforce 0.450% Market Average You 0.400% 0.350% 0.300% 0.250% 0.200% 0.150% 0.100% 0.050% 0.000% E0 E8 E7 M6 M5 M4 M3 M2 M1 P6 P5 P4 P3 P2 P1 S5 S4 S3 S2 S1 Source: Radford GWA database. Illustrative example Radford Analytics Webcast

31 What Percentage of The Labor Pool is in Which Job Family? EMEA UK Netherlands Radford Finance Function Job Family Market You You as % of Market Market You You as % of Market Market You You as % of Market Financial Management 8.24% 14.40% 175% 13.75% 17.78% 129% 11.26% 17.91% 159% Controller 2.10% 1.60% 76% 2.10% 2.22% 106% 1.18% 4.16% 353% Accounting 35.33% 48.60% 138% 46.72% 58.67% 126% 40.89% 52.00% 127% Billing Operations 3.91% 1.00% 26% 4.92% 0.00% 0% 3.45% 3.42% 99% Credit 3.55% 1.00% 28% 2.92% 0.00% 0% 2.81% 1.00% 36% Tax 3.83% 0.00% 0% 2.90% 3.10% 107% 3.44% 0.00% 0% Treasury 11.80% 16.62% 141% 9.05% 8.00% 88% 13.34% 7.50% 56% Audit 15.31% 2.40% 16% 10.00% 5.40% 54% 15.35% 8.00% 52% Controls/Compliance 11.31% 7.40% 65% 4.10% 4.44% 108% 3.80% 4.00% 105% Risk 2.30% 6.00% 261% 1.00% 1.00% 100% 3.50% 3.20% 91% Investor Relations 2.13% 1.90% 89% 1.80% 2.89% 161% 1.00% 0.00% 0% Source: Radford GWA database. Illustrative example Radford Analytics Webcast

32 Technology Sector GWA Case Study Delivering Distinctive Impact & Value Delivered a dynamic Excel-based tool to the client to allow further data analysis after the completion of the project. Enabled business leaders to understand the composition of the finance workforce and make decisions on: The location and use of shared service centres for transactional process orientated tasks The development of a centre of expertise that incorporates specialist finance skillsets The comparability of the existing talent profile to the types of work activities being performed Radford Analytics Webcast

33 Thank You! Name Phone Guy Pritchard Associate Partner, EMEA Gaurav Dutt Associate Director, EMEA +44 (0) (0) Radford Analytics Webcast