Radford Analytic Tools€¦ · 6 | 2014 Radford Analytics Webcast Overall Compensation Positioning The analysis below shows the average competitive positioning of the population against

One Firm. Complete Solutions.

Radford Analytic Tools 26 February 2014

10:00 – 10:45

Guy Pritchard

Gaurav Dutt

1 | 2014 Radford Analytics Webcast

Welcome

Welcome to our first Radford EMEA event in 2014. Our other events

scheduled in EMEA for 2014 are:

2014 Radford EMEA Events Location Date

Managing Employee Benefits Effectively London 13th March

Middle East Forum Dubai 25th March

Reward Forum Frankfurt 8th May

Sales Compensation Webcast 9th June

Reward Forum Munich 11th September

EMEA Regional Meeting London October (date TBC)


Agenda

Radford You Vs. Market (YvM) Analytics

Total Reward Analytics

Global Workforce Analytics (GWA)


You Vs. Market Compensation

Analytics Benchmarking Tools


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

0%

18%

24%

35%

24%

0% 3%

14%

30%

38%

14%

2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Product Dev ProfInd. 1






% o

f In

cum

ben

ts

YvM Distribution of Incumbent Matches for: United Kingdom

You

Market

Source: Illustrative example.


Total 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

Base

Salary

Target

Bonus

(as % of

Base)

Actual

Bonus

(as % of

Base)

Target

Total

Comp.

Actual

Total

Comp.

Base

Salary

Target

Bonus

(as % of

Base)

Actual

Bonus

(as % of

Base)

Target

Total

Comp.

Actual

Total

Comp.

Base

Salary

Target

Bonus

(% point

var.)

Actual

Bonus

(% point

var.)

Target

Total

Comp.

Actual

Total

Comp.

France ABC1Human Resources

Mgmt 245,050 24 4 54,075 41,066 47,881 10 7 53,662 52,185 94% 238% 58% 101% 79%

France ABC2Professional Services

Consultant 550,880 19 4 63,001 50,936 70,000 15 9 87,750 75,000 73% 130% 42% 72% 68%


Consultant 556,730 15 5 77,388 59,897 70,000 15 9 87,750 75,000 81% 102% 56% 88% 80%


Consultant 565,270 16 3 77,388 63,397 70,000 15 9 87,750 75,000 93% 104% 38% 88% 85%

Germany ABC9Professional Services

Consultant 563,440 15 3 64,608 57,120 70,000 15 9 87,750 75,000 91% 102% 32% 74% 76%


Consultant 562,220 17 5 65,318 61,699 70,000 15 9 87,750 75,000 89% 111% 57% 74% 82%


Consultant 557,660 16 4 70,561 64,616 70,000 15 9 87,750 75,000 82% 110% 46% 80% 86%

Variance to 50th Percentile

Incumbent

ID Country

Radford Benchmark

Job Title

Company XYZ Market - 50th Percentile (Median)


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

133% 122%

130% 114% 109% 111%

99%

79% 95%

Base Salary Target Bonus (% Base) Target Total Cash (Fixed Comp +Target Bonus)

% o

f M

ark

et

Cash Compensation vs. Market

XYZ as a Percent of Market Market 25th XYZ as a Percent of Market Market 50th XYZ as a Percent of Market Market 75th



You vs. Market Case Study: Building A Bespoke Compensation Benchmarking Tool

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

Client Situation

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 Approach


Assessing the Management Category

Levelling Chart for All Management in United Kingdom

over 110% of market

90% to 110% of market

less than 90% of market

Base

Salary

Target

Bonus

Target

Total

Cash

LTI

Total

Direct

Comp.

Incumb.

Count

Base

Salary

Target

Bonus

Target

Total

Cash

LTI

Total

Direct

Comp.

Incumb.

Count

Base

Salary

Target

Bonus

Target

Total

Cash

LTI

Total

Direct

Comp.

Level 1 - - - - - 0 33,000 3,000 36,000 1,000 37,000 752

Level 2 45,000 10,000 55,000 0 55,000 2 39,000 4,000 42,000 6,000 48,000 2,129 115% 250% 131% 0% 115%

Level 3 57,000 10,000 67,000 0 67,000 40 54,000 5,000 63,000 6,000 69,000 12,885 106% 200% 106% 0% 97%

Level 4 75,000 20,000 95,000 2,000 97,000 15 72,000 10,000 88,000 10,000 98,000 8,171 104% 200% 108% 20% 99%

Level 5 100,000 30,000 130,000 5,000 135,000 8 92,000 18,000 116,000 17,000 133,000 5,019 109% 167% 112% 29% 102%

Level 6 150,000 40,000 190,000 8,000 198,000 1 125,000 37,000 168,000 33,000 201,000 1,013 120% 108% 113% 24% 99%

Example Company Market - 50th Percentile (Median) Variance

Example Company

Management

All Management

50th Percentile (Median)

0%3%

61%

23%

12%

2%3%

7%

43%

27%

17%

3%

1 2 3 4 5 6

Radford Level

Example Company Market

Peer

United Kingdom-Pound



What is Management’s Pay Mix?

81%

82%

8%

18%

11%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Market

Company

Leve

l 2

Base Salary Target Bonus LTI (EV)

62%

75%

18%

20%

20%

5%

Market

Company

Leve

l 6

Pay Mix Analysis

78%

85%

7%

15%

15% Market

Company

Leve

l 3

69%

74%

14%

22%

17%

4%

Market

Company

Leve

l 5

73%

77%

10%

21%

17%

2%

Market

Company

Leve

l 4



Assessing the Professional Category

Levelling Chart for All Professional in United Kingdom

over 110% of market

90% to 110% of market

less than 90% of market

Base

Salary

Target

Bonus

Target

Total

Cash

LTI

Total

Direct

Comp.

Incumb.

Count

Base

Salary

Target

Bonus

Target

Total

Cash

LTI

Total

Direct

Comp.

Incumb.

Count

Base

Salary

Target

Bonus

Target

Total

Cash

LTI

Total

Direct

Comp.

Level 1 - - - - - 3 27,000 1,000 28,000 2,000 30,000 5,197

Level 2 35,000 5,000 40,000 0 40,000 20 32,000 2,000 34,000 2,000 36,000 16,667 109% 250% 118% 0% 111%

Level 3 42,000 6,000 48,000 0 48,000 78 41,000 4,000 44,000 2,000 46,000 33,542 102% 150% 109% 0% 104%

Level 4 55,000 8,000 63,000 0 63,000 132 53,000 5,000 61,000 5,000 66,000 21,293 104% 160% 103% 0% 95%

Level 5 68,000 10,000 78,000 4,000 82,000 112 71,000 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 31 85,000 15,000 105,000 15,000 120,000 1,239 94% 87% 89% 40% 83%

Example Company

Example Company Market - 50th Percentile (Median) Variance

Professional

All Professional

50th Percentile (Median)

1%

5%

21%

35%

30%

8%6%

20%

39%

25%

9%

1%

1 2 3 4 5 6

Radford Level

Example Company Market

Peer

United Kingdom-Pound



How is the Professional Category Distributed?

28%

20% 18%

34%

20%

31% 28%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Mkt. Quartile 1 Mkt. Quartile 2 Mkt. Quartile 3 Mkt. Quartile 4

All Professionals - Quartile Distribution

Base Salary Total Cash



Drilling Down into the Quartile Distribution

11% 16%

35% 38%

21% 26% 28% 25%

0%

10%

20%

30%

40%


Web Developer Professionals - Quartile Distribution

Base Salary Total Cash

33% 38%

18% 11%

34% 36%

20% 10%

0%

10%

20%

30%

40%


Software Development Professionals - Quartile Distribution

Base Salary Total CashSource: Illustrative example.


You vs. Market Case Study

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

Delivering Distinctive Impact & Value


Total Reward Analytics Benchmarking and budgeting


Radford and Aon Hewitt Partnership to Leverage Databases and Tools

Radford GTS and GSS

databases

Aon Hewitt benefit databases A

NA

LY

TIC

S

TR benchmarking

by geography

and or BU

Simulate TR

spend and

budgeting

Roll-up tool to

aggregate based

on demographics

Data

Foundations 1

Tools /

Technology 2

Actuarial methodology

Compensation position

assessment

Dynamic reporting

Individual TR

analysis


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?


Technology Sector Total Rewards Case Study

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

Client Situation

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 Approach


Dynamic Benchmarking Workbooks

Total rewards deliverables feature dynamic, Excel-based benchmarking workbooks to help clients

customize and leverage results across their organization

95.0%

85.0%

110.0%

90.0% 93.0%

0%

20%

40%

60%

80%

100%

120%

Base Variable Equity TotalBenefits

Total Reward

Total Rewards Benchmarking

(You as % of Market)

Base Salary

1,000,000

Benefits 700,000

Variable 200,000 Equity

100,000

Total Rewards Value

Country: Function: Percentile: Business Division Level

Germany ▼

Product

Development ▼

50th ▼

ABC ▼

All ▼



Aggregate Total Rewards Value vs. Market

Fixed Salary 750,000,000

Variable 187,500,000

Equity 22,500,000

Benefits 225,000,000

Values in: EUR

Your Company

Aggregate Total Rewards Value:

EUR 1,161,800,000

Your Company’s average Total Rewards

Value per employee is EUR 116,180

Fixed Salary 740,000,000

Variable 148,000,000

Equity 14,800,000

Benefits 259,000,000

Values in: EUR

Market

Aggregate Total Rewards Value:

EUR 1,185,000,000

Market average Total Rewards Value per

employee is EUR 118,500

Source: Illustrative example, assumes 10,000 employees.


Total Rewards Roll-Up Tool

ABC Co. Total Rewards AnalysisCustom Dynamic Data Display Tool

Choose Target Versus Actual Total Cash

Target TC (2013) Choose Target or Actual Total Cash

Select Reporting Filters

Choose Country Choose Service Category Choose Incentive Category

Choose Business Organization Choose Review Rating Choose Function

Choose Age Category Choose Sex

Exec Sr Mgr Mgr Sr Indiv Indiv All Levels

EXE SM IM/OM ICB ICA All Levels

2013 Base 101% 107% 108% 104% 104% 105%

Target Variable 106% 144% 84% 98% 209% 104%

Target Total Cash 103% 115% 104% 103% 108% 105%

Equity (incl. ESPP) 111% 64% 61% 35% 38% 60%

Total Cash & Equity 105% 108% 100% 99% 107% 101%

Benefits 95% 99% 103% 98% 99% 99%

Total Rewards 104% 106% 101% 98% 105% 100%

ABC Co. as a Percent of Market Median

United States

-- All --

-- All --

-- All --

-- All --

-- All --

-- All --

-- All --

101%107% 108% 104% 104% 105%106%

144%

84%

98%

209%

104%103%

115%

104% 103%108% 105%

111%

64% 61%

35% 38%

60%

105% 108%100% 99%

107%101%

95% 99% 103%98% 99% 99%

104% 106%101% 98%

105%100%

0%

50%

100%

150%

200%

250%

Exec Sr Mgr Mgr Sr Indiv Indiv All Levels

ABC Co. as a Percent of Market

2013 Base Target Variable Target Total Cash Equity (incl. ESPP) Total Cash & Equity Benefits Total Rewards



Technology Sector Total Rewards Case Study

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



Global Workforce Analytics (GWA) Driving business performance through effective

workforce strategies


GWA Overview

122 Participating Companies

2.8 Million Incumbents

$231 Billion in Total Pay

116 Countries with Incumbents

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


Actionable Insights

Global Workforce

Distribution

Delivers answers to questions on where talent resides,

what it consists of and its aggregate value

Distribution of all

employees by country

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?


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

GWA Full Census Submissions

Easy to submit data. Full census input required of benchmark and non-benchmark jobs.


Technology Sector GWA Case Study

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

Client Situation

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 Approach


What % of the Workforce Resides in the Finance Function and How Does That Compare to Our Competitors?

Source: Radford GWA database. Illustrative example.

Global Finance

Incumbents as % of

Total Global Population

EMEA Finance

Incumbents as % of

Total EMEA Population

UK Finance Incumbents

as % of Total UK

Population

Netherlands Finance

Incumbents as % of

Total 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…)

53.5 52.6 49.0 70.9

You - Finance to

Emp’ Population

Ratio (1 to…)

62.9 56.5 32.8 49.8


What is the Headcount Distribution of the Finance Function Among Employee Categories?

Average Headcount Distribution by Category EMEA Finance as % of EMEA Workforce

1.75%

2.49%

3.27%

2.27%

2.85%

3.82%

1.15% 1.17%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

Exec Mgmt Prof Support

Perc

ent

of

Incum

bents

Market Average You


Geography Job Category Job Family

EMEA ▼ All Categories ▼ All Families ▼


What is the Distribution of The Finance Headcount by Job Level?

Headcount Distribution by Level - EMEA Finance as % of EMEA Workforce

0.000%

0.050%

0.100%

0.150%

0.200%

0.250%

0.300%

0.350%

0.400%

0.450%

E0 E8 E7 M6 M5 M4 M3 M2 M1 P6 P5 P4 P3 P2 P1 S5 S4 S3 S2 S1

Perc

ent

of

Incum

bents

Market Average You


Geography Job Category Job Family

EMEA ▼ All Categories ▼ All Families ▼


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%



Technology Sector GWA Case Study

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



Name Email Phone

Guy Pritchard

Associate Partner, EMEA [email protected] +44 (0) 20 7086 5093

Gaurav Dutt

Associate Director, EMEA [email protected] +44 (0) 20 7086 5092

Thank You!

Documents

Radford Analytic Tools€¦ · 6 | 2014 Radford Analytics Webcast Overall Compensation Positioning The analysis below shows the average competitive positioning of the population against