Canadian Compensation Trends & Pay Practices

Canadian Compensation Trends & Pay

Practices

Finn AndersenSales ManagerPayScale, Inc.

Karaka LesliePartnership Manager PayScale, Inc.

www.payscale.com

14,000 Positions

2500 Customers

40 Million Salary Profiles

250 Compensable Factors

11 Countries

Agenda

o5 Compensation Best Practices & Trends

o Immediate Action

o Special! Trends Data For You

oQ & A

• Surveyed over 550 respondents in Canada

• Themes:– Financial Performance– Wage Growth– Hiring Practices– Retention Concerns– Managing Increases

• Company size breakdown:– Small: < 100 employees - 48%– Medium: 100 - 1,000 employees - 36%– Large: >1,000 employees – 16%

65% of Canadian companies expected their financial performance to improve in 2013

General Market Trends

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

Understand Your Labor Market

Understand Your Labor Market

•Who do you compete with?

• Size, Location, Revenue, Industry

•Who can you compete with?

Understand Your Labor Market

Understand Your Jobs

Understanding Your Jobs•Work Gets More Specialized

•Hot Skills in Canada

•Not All Jobs Are Created Equal

•Hot Jobs in Canada

Hot Skills in CanadaTechRuby on RailsSuretrak (Primavera)Software Development LifecycleCloud ComputingPythonMobile ComputingInteraction Design O&G/Engineering

Well Production EngineeringSix Sigma Green BeltSCADAOil and Gas Formation EvaluationChemical Process EngineeringShielded Metal Arc Welding (SMAW)

OtherMergers and AcquisitionsAvionicsFinancial ModelingMaterial ScienceLoan UnderwritingSAP Enterprise Resource Planning

With Skill

Without Skill

Skills Can Play a Role

Hot Jobs in Canada

TechnologyWeb Developer - 7.09%Programmer Analyst

OtherMillwright - 4.1%Executive Chef - 4%Insurance UnderwriterRetail Store ManagerConstruction SuperintendentLogistics Coordinator

Finance/AdminAccounts Receivable Clerk - 5.38%Administrative AssistantOffice ClerkStaff AccountantReceptionist

Sales/OperationsRegional Sales Manager - 5.25%National/Strategic Accounts Manager - 5.08%Quality Assurance Manager - 4.21%Warehouse Manager

Positions with Largest Year over Year Increases

Understanding Jobs In Markets

“The market” changes for each job

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

2013 Q3

0.9000

0.9500

1.0000

1.0500

1.1000

1.1500

Web Developer Median PayAcross Time for Canada

Web Developer Canada

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

2013 Q3

0.9000

0.9200

0.9400

0.9600

0.9800

1.0000

1.0200

1.0400

1.0600

1.0800

1.1000

Electrical Engineer Median PayAcross Time for Canada

Electrical Engineer Canada

Create a Competitive Strategy

Competitive Strategy• Who is your market?

•How competitive do you want to be?

•What do you want to reward?

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.

*http://www.payscale.com/hr/compensation-practices-survey

Competitive Strategy

Not all individuals, process, functions and business units have the same impact on results

We need to prioritize jobs, key employees and business units and then allocate the greatest portion of its resources to those high priority areas.

Competitive Strategy• Talk with senior leadership

• Vary strategy by department

• Base your decisions on key roles

Build a Structure

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.

Build a Structure• Let the structure guide your business forward

• Keep it current

•Decide what’s important for you

Pay for Performance

Performance

Top people concerns among senior business executives are:oCreating a high-performance culture o Leadership developmentoTalent ManagementoTraining

Market Trend:Ongoing Shift Toward P4P

Source: Hewitt Survey – U.S. Salary Increases 2009/2010 and Impact on Org Spend for 2010

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%

Merit Matrix

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

Immediate Action

CHRP worth more!

http://resources.payscale.com/hr-The-Value-of-a-CHRP-Whitepaper.html

Faster Job Progression

http://resources.payscale.com/hr-The-Value-of-a-CHRP-Whitepaper.html

Special Offer for

Canadian HR Professionals

PayScale Delivers Where Other Compensation Providers Fall ShortPayScale leads the world in compensation knowledge with the freshest and most detailed data from over 36 million salary profiles. More than 2500 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: www.payscale.com/compensation-todayJoin our Group on LinkedIN: Compensation Today: HR Best Practices

Finn AndersenSales ManagerPayScale, Inc.

Karaka LesliePartnership Manager PayScale, Inc.

www.payscale.com