Building a Market-Based Pay System With Millennials in Mind

Transcription

1 Building a Market-Based Pay System With Millennials in Mind Mark Avery Chief Compensation Officer Katie Hynan Senior Associate Consultant Copyright 2016 by The Segal Group, Inc. All rights reserved.

2 Who are the Millennials? The Millennial generation represents approximately 80 million people and includes those individuals born between 1981 and

3 Why Should Employers Pay Specific Attention to Millennials? Estimated to be 50% of the workforce by 2020 Most racially diverse generation Known as digital natives of internet, mobile technology, and social media Source: 3

4 Challenges Employers Face with Millennials Least loyal to their current organization Want defined career path & opportunities 64% 46% Expect to leave their companies in the next five years Left job due to lack of career growth Source: 2016 Deloitte Millennial Survey Source: 11 Interesting Hiring Statistics You Should Know from Inc. 4

5 What kind of specific challenges has your institution faced when recruiting millennials? 5

6 What Matters Most to Millennials in Selecting an Employer? Job-specific training Compensation Work-life balance Career advancement opportunities Career development Meaningful work Innovation in employer s product/service How an employer manages its employees Work environment in which the employee will function These items are no different than those for any other generation. However, it s the positioning of these items that matters. We will focus on compensation in today s conversation. 6

7 Challenges of Existing Compensation Programs Lack of transparency and perceived inequity/inconsistency in how pay decisions made Salary compression Managers gaming the system or using favoritism No market or internal data for making decisions Salary structure & ranges that are not market competitive and outdated still using point-factor systems No formal career paths (promotion and lateral) No pay and performance alignment 7

8 Institutions Also Facing Technology Challenges and website outreach are now viewed as traditional platforms. Institutions need to focus on social media and other vehicles for engaging and communicating with employees. 8

9 What Higher Education Employers Can Do to Move to a Market-Based Program 1. Ensure job descriptions are accurate and reflect appropriate knowledge, skills, and education Helps candidates understand the specifics about the role 2. Conduct market assessment and evaluation of jobs Ensures understanding of recruiting markets, salary competiveness, and market practices 3. Use market assessment results to develop salary structure (grades and ranges) Provides parameters for understanding salary opportunities 4. Develop clear guidelines for merit increases, bonuses, and promotions Facilities understanding of what it takes to get to the next level 9

10 Millennials and Market-Based Compensation Systems What Millennials Might Do Use common online sources (websites, recruiting sites, etc.) to obtain data on salaries Ask for regular feedback about their performance in their job What Employers Can Do Have and provide market information from multiple credible, reputable sources (general industry & higher education) to managers Provide immediate, informal feedback and document key performance themes Inquire about promotional opportunities earlier than expected in role Develop defined career paths associated pay ranges, and outline professional development opportunities 10

11 Millennials and Market-Based Compensation Systems What Millennials Might Do What Employers Can Do Expect regular increases in base salary, based on performance Outline pay opportunities and guidelines, providing details on potential increase situations Run own analysis of information gathered, and draw conclusions Share relevant compensation information with employees, and hold conversations with them to understand their perspectives/needs Search for information on existing platforms (intranet, institution website, etc.) about compensation practices Provide technological tools/resources that house relevant compensation information 11

12 Introducing Technology into Compensation Program Administration Is Critical Since 87% OF ADULTS USE THE INTERNET 68% 76% of cellphone users are smartphone users of online adults use some form of social media 92% 50% of cell phone users download apps OF US ADULTS OWN A CELL PHONE 21% of adults wear some sort of wearable technology Embracing technology is not just for the millennial population. Sources: 12

13 MarketPay System is an Online Tool that Facilitates Market Pricing & Reporting Higher education is embracing market-based compensation, and using MarketPay to analyze survey data (often w/sibson help) Baylor Boston College Boston University Brandeis Capella Chapman College of St Benedict Colorado College Dartmouth DePaul Florida International HACC Harvard Indiana University Kamehameha Kansas University Lehigh Loma Linda Loyola Northeastern NYU Oakland University Ohio State University of Alabama University of Louisville University of Central Florida University of Chicago University of Colorado University of Georgia University of Iowa University of Massachusetts University of Michigan University of Minnesota University of Nebraska University of Richmond University of St Thomas University of Texas Utah Valley Virginia Christian Wake Forest 13

14 MarketPay System and Its Capabilities COMPENSATION SURVEY DATA A customer s entire survey library is converted into a single database and updated as new third-party subscribed surveys are published. Custom / Specialized MarketPay is hosted in the cloud, secure and accessible by unlimited authorized users. MarketPay s culture is based on data excellence ensuring quality-tested, accurate information is released to the customer. HRIS DATA MarketPay syncs your HRIS data with the survey data in one robust database, allowing for online benchmarking and tailored analysis to gain insights around pay competitiveness. 14

15 MarketPay helps you build and maintain benchmarks Powerful search and matching capabilities enable users to quickly find survey matches for benchmark jobs Once matches are made, they roll forward to help you participate and utilize results in future years 15

16 Then analyze the data to review and develop compensation programs Report Writing Structure development Merit matrix modeling Survey participation 16

17 Data Visualization and Exploration Interactive analytics to explore hypotheses, dig deeper into issues, and find the story 17

18 Potential Changes for Your Institution Develop online tools/resources to: Capture/document feedback conversations Increase understanding and transparency of compensation program Communicate to employees Provide critical, time sensitive information Refine and encourage use of intranet site and other social media platforms 18

19 Thank You! Katie Hynan Senior Associate Consultant Mark Avery Chief Compensation Officer