Texas Compensation Trends & Pay Practices
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1 Texas Compensation Trends & Pay Practices Zach Batson Sales Manager PayScale, Inc. Karaka Leslie Partnership Manager PayScale, Inc.
2 14,000 Positions 3000 Customers 11 Countries 40 Million Salary Profiles 250 Compensable Factors
3 Agenda o General Market Trends o Discuss 5 Compensation Best Practices o Immediate Action o Q & A
4 Surveyed over 4,000 respondents Themes: Financial Performance Wage Growth Hiring Practices Retention Concerns Managing Increases Company size breakdown: Small: < 100 employees - 45% Medium: 100-1,000 employees - 34% Large: >1,000 employees 21% Source:
5 General Market Trends Source:
6 Dallas & Houston vs. National Trends What is the PayScale Index? The PayScale Index measures the change in pay of employed workers over time, and makes predictions about how national wages might change for the next quarter What specifically does the PayScale Index measure? The PayScale Index specifically measures the quarterly change in total cash compensation of full time private industry employees
7 Five Compensation Best Practices 1) Understand Your Labor Market 2) Understand Your Jobs 3) Create a Competitive Strategy 4) Build a Structure 5) Pay for Performance
8 Understand Your Labor Market
9 Understand Your Labor Market Who do you compete with? Size, Location, Revenue, Industry Who can you compete with?
10 Labor Market - Industry & Size The Competition YOU THE The COMPETITION Competition Where could your employee work?
11 Market Differentials vs. COLA Headline: HOUSTON IS HOT!
12 Understand Your Jobs
13 Understanding Your Jobs Work Gets More Specialized Hot Skills in Texas Not All Jobs Are Created Equal Hot Jobs in Texas
14
15
16 Hot Skills in Texas Engineering Well Production Engineering Precision Measurement Drilling Engineering Oil and Gas Formation Evaluation Chemical Process Engineering Reservoir Engineering Distributed Control Systems (DCS) Tungsten Inert Gas (TIG) Welding Industrial Hydraulics Other Loan Underwriting Data Modeling Financial Financial Modeling Statistical Analysis
17 Skills Can Play a Role Without Specialty With Specialty
18 Hot Jobs in Texas Process Technician % Geologist % Technical Advisor % Chemical Operator 13.62% Cost Engineer 13.11% Quality Assurance (QA)/Quality Control (QC) Inspector 12.68% Occupational Therapy Assistant (OTA) 12.52% Pharmacy Technician, Lead 12.02% Production Operator 11.66% Petroleum Geologist 11.40% Project Control Specialist 10.93% Health & Safety Engineer 10.79% Physical Therapy Assistant 10.75% % increase year over year
19 The market changes for each job Software Developer Median Pay Across Time for Texas Sales Director Median Pay Across Time for Texas Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q3 Software Developer United States Sales Director United States
20 Create a Competitive Strategy
21 Why Have a Comp Strategy? We asked thousands of HR and business leaders* about their top challenges in compensation. They said: 1. Retain. They don t want to risk losing employees by underpaying them, or losing money by overpaying them 2. Attract. To compete for talent, job offers must match the market and the unique factors driving pay for their jobs. 3. Motivate. Drive performance with strategies that reward top performers while aligning with company goals. 4. Confidence. Having the science to back up decisions and conversations with executives and employees. Source:
22 Competitive Strategy Understand business goals Who is your market? How competitive do you want to be? What do you want to reward?
23
24 Competitive Strategy Vary strategy by department Base your decisions on key roles
25 Build a Structure
26 Build a Structure Let the structure guide your business forward Keep it current Decide what s important for you
27 Advantages of Pay Structures Provide alignment to business strategy Clarify relative worth of the position internally & externally Ensure fair pay (legally defensible) Define a pay range for a position Create clear career paths Room to reward your employees based on performance, tenure, etc.
28 Building a Structure Source:
29 Pay for Performance
30 Performance Top people concerns among senior business executives are: o Creating a high-performance culture o Leadership development o Talent Management o Training
31 Market Trend: When crafting next years budget vs. this year the use of Across the board increases down by 50% Use of Variable Pay has increased 300% Ongoing Shift Toward P4P Source: Hewitt Survey U.S. Salary Increases 2009/2010 and Impact on Org Spend for 2010
32 Merit Matrix
33 Immediate Action
34 Immediate Action Elementary Know your jobs Have an understanding of the market Intermediate Discuss a compensation strategy with leadership Know what you want to reward and what you value Build guidelines that reflect a compensation strategy that works for your business Advanced Find new and creative ways to incorporate performance pay Know how your pay practices stack up against your exact competition for talent Communicate you pay strategy with management Develop a strong compensation structure
35 Special Offer for Texas HR Professionals
36 PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 40 million salary profiles. More than 3000 organizations use PayScale s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people. Visit our blog: Join our Group on LinkedIN: Compensation Today: HR Best Practices Zach Batson Sales Manager PayScale, Inc. Karaka Leslie Partnership Manager PayScale, Inc.
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